Gibraltar: Taxation in Gibraltar

Last Updated: 16 January 1996
1. The Taxation of Individuals

Tax is charged in Gibraltar on any income which is derived from, accrued in or is received in Gibraltar. However, no income tax is charged on income arising from moneys deposited with a bank or building society in Gibraltar if the depositor is not resident in Gibraltar for tax purposes. An individual not resident for tax purposes will not have income received from exempt companies taxed. There are other concessions for certain exempted individuals. These are set out in section 5 below.

All individuals resident in Gibraltar for tax purposes are also liable to pay income tax on their worldwide income. There is unilateral tax relief given in respect of any investment income which is taxed in the United Kingdom and is not remitted to Gibraltar. If the income is remitted then credit is given for the tax paid in the United Kingdom.

Individuals resident in Gibraltar for tax purposes benefits from certain allowances, for example the first L600 of interest paid on a building society deposit is tax free, an allowance of L10,000 is given for a first time purchaser of a residence for his own occupation, mortgage interest is allowed as is life insurance and certain pension premiums. The first L1,450 of income is also tax free or in the case of a married couple the first L2,800. Tax is payable at the rate of 20 per cent on the first L1,500 of assessable income, 30 per cent on the next L5,500, 35 per cent on the next L5,500, 40 per cent on the next L3,500, 45 per cent on the next L3,500 and 50 per cent on any balance.

2. Taxation of Companies

Companies which are ordinarily resident in Gibraltar for tax purposes, which essential means those managed and controlled in Gibraltar, are liable to be taxed on their taxable profits at the rate of 35 per cent. There are also rules governing the withholding of tax at the rate of 30 per cent on certain payments of interest to non-resident companies and individuals. Payments by contractors to sub-contractors who have not been issued with an exemption by the Commissioner of Income Tax have to suffer a withholding of 30 per cent.

Exempt and Qualifying companies enjoy the exemptions explained in Sections 5.1 and 5.2.

3. Estate Duty

Real property situate in Gibraltar and personal property wherever situate of any person domiciled in Gibraltar is chargeable to Estate Duty. The estate of a person dying who is not domiciled in Gibraltar is chargeable to Estate Duty to the extent that the estate consists of any property situate in Gibraltar except if it is a bank or building society deposit.

Estate Duty is chargeable at the rate of 5 per cent on the value of the estate exceeding L20,000 but not exceeding L40,000, 10 per cent on the next L20,000, 15 per cent on the next L40,000, 20 per cent on the next L100,000 and 25 per cent on any amount exceeding L200,000. The first L100,000 of the deceased's primary residence in Gibraltar is not chargeable to Estate Duty.

As explained in sections 5.1 and 5.2 certain exemptions to this charge exist if the property consists of shares in or loans to Exempt or Qualifying companies.

4. Stamp Duty

Stamp Duty is levied on the documents listed in the schedule to the Stamp Duties Ordinance, for example conveyances, transfers and assignments are charged at the rate of 63 pence for every L50 or part thereof, mortgages at the rate of 13 pence for every L100 or part thereof. No Stamp Duty is levied on mortgages or bills of sale relating to ships. There are also concessions in respect of Exempt and Qualifying companies as explained in sections 5.1 and 5.2.

5. Tax Concessions

5.1 Exempt Companies

The Companies (Taxation and Concessions) Ordinance has as its main object the exemption of profits not arising from local trade from Gibraltar Income Tax and the exemption of the value of assets held through or in exempt companies from Estate or Death duties. An exempt company also enjoys exemption from Stamp Duties in Gibraltar and share transfers as well as assignments of loans of and in companies are also the subject of exemption for the benefit of the shareholder or loanholder transferring the same. The privileges of an exempt company are available only to non-Gibraltarians

(whether of British nationality or otherwise) and persons who do not come within the definition of residents of Gibraltar for the purposes of the Income Tax Ordinance.

Generally speaking, an exempt company can carry on business from Gibraltar in any part of the world, but it cannot engage in local trade or business, nor can it conduct business with Gibraltarians or residents of Gibraltar unless in an exceptional case permission is obtained, on application to the Financial & Development Secretary or unless it is another exempt company. Gibraltar is a suitable forum for the establishment of holding and family companies, and also for companies engaged in banking, finance, insurance and general management services and consultancy work, or in the business of distributors and agents, worldwide import and export business, as well as for shipowning and operating companies, and those engaged in supplying services to shipping. The certificate of exemption normally defines in broad items, the actual business that the company is authorised to carry on, within the limits of its exempt status.

An exempt company is required to have a capital of not less than L100. Whilst details and references of intended shareholders must be submitted, the law allows the acquisition of shares by trustees.

Annual Tax is payable by an exempt company irrespective of its share capital, assets, profits or losses, at the rate of L225 per annum if the company is controlled in Gibraltar and is thus ordinarily resident in Gibraltar, or at the rate of L200 per annum if the company is controlled outside Gibraltar and is thus not ordinarily resident in Gibraltar.

In most cases, it is an important advantage to be able to place management of the company in Gibraltar without attracting local taxes. This facility is not usually available in other finance centres where the management of companies of exempt corporate status must be removed from the place of incorporation. The additional L25 per annum of Annual Tax is thus worthwhile. At the time exempt status is sought, it is important to make adequate arrangements for the punctual payment of annual tax on the 31st March of every year. Non-payment of tax leads to forfeiture of exempt status, with a consequent liability to Gibraltar Income Tax and Estate Duty.

Exempt status can be reinstated on application and explanation of the default, by payment of the tax due.

and a penalty of L225. Defaults result in added administration and costs. Arrangements can be made for the provision of registered offices, Company Secretary, a Board of Directors, Nominees or Trustees and Trustee Services, and for the general management and administration of the company, and of any trusts that might be established in Gibraltar. Fees are arranged in accordance with the requirements of each case, subject to standard minimum fees for each service as set out in the attached schedule.

5.2 Qualifying Companies

Like an exempt company, a qualifying company can be either a company incorporated in Gibraltar or a foreign company registered in Gibraltar. The requirements which have to be met by a qualifying company are the same as those of an exempt company except that its share capital must be a minimum of L1,000.00. There is a requirement that L1,000.00 be kept on deposit with the Gibraltar Government as security for the payment of future taxes. A fee of L250.00 is also payable to the Government of Gibraltar an application for a Qualifying Certificate.

The advantages enjoyed by a qualifying company are also the same as those enjoyed by an exempt company except that instead of a flat rate tax it is taxed by reference to its taxable profit. On application a percentage rate is agreed with the Government which must be between 2 and 35 per cent. At present the minimum accepted rate seems to be 5 per cent. Qualifying companies are useful where a jurisdiction grants unilateral tax relief if profits have already been taxed at a percentage rate in another jurisdiction where the company is resident for tax purposes.

5.3 Individuals

The Qualifying (High Net Worth) Individuals Rules 1992 makes concessions for certain individuals. To qualify the individual must have available for his exclusive use for a minimum period of seven months approved residential accommodation in Gibraltar. He must also reside in this accommodation for a minimum of thirty days. The individual cannot otherwise be resident in Gibraltar and must not have been so resident in any of the previous five assessment years.

If the individual meets these requirements then he may apply to the Financial and Development Secretary for the issue of a certificate designating him as a High Net Worth individual. A fee of L500 is payable on making the application. This fee is not refundable.

Once issued with a certificate such individual's taxable income becomes chargeable to tax in accordance with the provisions of the Income Tax Ordinance. However, there are limitations to the amount of tax for which he is liable in Gibraltar. Liability is limited to a maximum taxable income of L45,000 (the maximum liability is therefore L19,750 at present tax rates). There is a minimum liability to pay L10,000 in each year of assessment.

5.4 Trusts

The Income Tax (Allowances, Deductions and Exemptions) Rules 1992 exempt the income received by any trust or beneficiary under the trust in the following circumstances:-

(a) The trust is created by or on behalf of a non-resident person; and

(b) the income either accrues or is derived outside Gibraltar, or in the case of income received by a trust would, if it had been received directly by the beneficiary, be not liable to tax under the Income Tax Ordinance; and

(c) except in the case of a trust created before the 1st July 1983, the terms of the trust expressly exclude residents of Gibraltar (as defined in the Companies (Taxation and Concessions) Ordinance) as persons who either are, or may be, under any discretionary power of the trustee under the terms of the trust, a beneficiary or any class or classes of beneficiary.

5.5 Development Aid

The Development Aid Ordinance relieves income of development projects in Gibraltar from Income Tax if a Development Aid Licence has been issued to the project by the Minister responsible for economic development as advised by the Development Aid Advisory Committee.

The criteria for the grant of such Licence includes the following requirements:-

(i) It is a new project which has the effect of:-

(a) Creating a tangible and immovable asset in Gibraltar with a life span exceeding the time during which the Licence holder derives benefits under the Licence; and

(b) providing more than two additional units of housing accommodation in Gibraltar; or

(c) contributing materially to the development of tourism in Gibraltar; or

(d) providing any new industry in Gibraltar; or

(e) affording new employment opportunities or career prospects in Gibraltar; or

(f) otherwise improving materially the economic or financial infrastructure of Gibraltar.

(ii) It is for the economic benefit of Gibraltar.

(iii) It shall:-

(a) if it is one falling within paragraph (i) (b) above, be completed within two years of the issue of the Licence and the investment must be one of a minimum of L200,000 or within five years and the investment made one of a minimum of L400,000;

(b) if it is one falling within paragraph (i) (c) to (i) (d) above, be completed within two years of the issue of the Licence and the investment must be one of a minimum of L500,000 or within five years and the investment made one of a minimum of L1,000,000.

The Minister retains a discretion to vary the requirements listed in (iii) above as to time limitations and amount of investments.


This entry is intended for general information only and should not be used or considered as a detailed exposition of the Law. It is aimed at giving a rudimentary view of the Law applicable in Gibraltar. This entry is not to be used as a substitute for professional advice which should be sought in each particular case.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions