On 1 January 2016, Gibraltar's income tax rules changed and a new requirement was introduced for all Gibraltar companies to file accounts and tax returns with the Gibraltar Tax Office. Previously, a company was only required to file accounts and tax returns if it had income assessable to tax in Gibraltar. Small companies need to submit only an Abridged Balance Sheet with the tax return.
There are a number of tax advantages for filing tax returns. The company will be issued with a Tax Identification Number ("TIN") which is useful for demonstrating to the Taxation authorities that a company is registered for tax purposes. A TIN can also be helpful when the company is opening a bank account or making an investment.
The size of the company determines the type of accounts to be filed with the tax return:
Full accounts including a balance sheet, profit and loss account, directors' report and auditors' report.
Medium sized companies (meeting 2 out of 3 criteria) – Turnover not exceeding £25.9 million, less than £12.9 million net assets and less than 250 employees:
Full accounts including a balance sheet, an abridged profit and loss account, directors' report and auditors' report
Small Companies (meeting 2 out of 3 criteria) – Turnover not exceeding £6.5 million, less than £3.26 million net assets and less than 50 employees:
An Abridged Balance Sheet only
The filings must be done within nine months of the company's financial year end to avoid penalties as follows:
Failure to file tax returns within nine months:
Failure to file tax returns within one year (+ 3 months after deadline):
Failure to file tax returns within fifteen months (+ 6 months after deadline):
The penalties above are added together, accumulating to £850.
There are a number of tax advantages for registering a company in Gibraltar:
- Low rate of 10% on Gibraltar derived income or profits
- Income from outside of Gibraltar is outside scope of Gibraltar tax
- No Capital Gains Tax, Wealth Tax or Estate Duty
- No Value Added Taxation ("VAT")
Fiduciary offer a comprehensive range of company and trust services including preparation of tax returns starting from £75, as well as accounting services. If Fiduciary prepare your Gibraltar company's financial statements, we will automatically file a Gibraltar tax return.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.