Gibraltar

Corporate - Significant developments

Last reviewed - 04 December 2022

Budget 2022

On 28 June 2022, the Chief Minister delivered his budget speech, which included a number of corporate tax announcements.

Marketing allowance

The additional deduction amounting to 50% of marketing costs announced in the 2021 Budget Address will be revoked with immediate effect. The incentive will now apply for one year only and is limited to marketing expenditure relating to marketing Gibraltar as a tourism destination or as a jurisdiction for the purposes of attracting new business ventures and enterprises to set up and operate from Gibraltar. The deduction will not be available for generic marketing of products or services to a company’s customer base.

Amnesty period

An amnesty period will be introduced until 31 December 2022 to allow companies that have filed returns over the last two financial years and should have filed accounts up to 31 December 2022 to resubmit their returns and pay any undeclared tax without penalties or interest. Following the end of the amnesty period, the Commissioner of Income Tax may issue assessments plus penalties and interest in respect of historic tax liabilities.

Penalty increases

As of 1 July 2023, the late filing penalties for tax returns will be increased as follows:

  • Micro entities / small companies:
    • 100 British pounds (GBP) initial penalty for failure to comply.
    • GBP 450 additional penalty for three months of non-compliance since deadline.
    • GBP 750 additional penalty for six months of non-compliance since deadline.
  • Medium companies:
    • GBP 750 initial penalty for failure to comply.
    • GBP 1,250 additional penalty for three months of non-compliance since deadline.
    • GBP 2,000 additional penalty for six months of non-compliance since deadline.
  • Large companies:
    • GBP 1,500 initial penalty for failure to comply.
    • GBP 3,500 additional penalty for three months of non-compliance since deadline.
    • GBP 5,000 additional penalty for six months of non-compliance since deadline.

Audit threshold

For accounting periods ending on or after 1 July 2022, the threshold above which corporate tax returns must be accompanied by audited accounts will increase from GBP 1,250,000 to GBP 1,500,000.

Import duty

 With effect from 29 June 2022, the following COVID-related measures were revoked: 

  • Import duty waiver on all commercial imports other than for certain commodities, such as excise goods.
  • A 10% flat rate of import duty levied on all personal imports over GBP 25 in value, other than key commodities. 

Private importations will now be charged at the import duty rates put in place prior to the introduction of the above measures.