Answer ... Although depreciation is included in the accounts, it is not considered a tax-deductible expense. This is nevertheless compensated by the following capital allowances:
- The first £30,000 of qualifying expenditure on plant and machinery (including fixtures and fittings) acquired in a year of assessment is fully deductible, with the balance deductible at the rate of 15% per annum on a reducing balance basis.
- The first £50,000 of qualifying expenditure on computer equipment (including software) is fully deductible, with the balance deductible at the rate of 15% per annum on a reducing balance basis.
- Expenditure on motor vehicles which does not qualify as plant and machinery does not qualify for a first-year allowance, but is deductible at the rate of 15% per annum on a reducing balance basis.
Answer ... There are currently no specific research and development credits or incentives in Gibraltar. However, there are certain incentives, as follows:
In order to encourage private development in Gibraltar, promoters and developers of approved projects are offered certain development incentives, such as tax relief, import duty and rates relief. In order to qualify, the project must be a new project that is for the economic benefit of Gibraltar and that aims to:
- create a tangible immovable asset in Gibraltar;
- provide units or housing;
- afford new employment opportunities; or
- materially improve the economic or financial infrastructure of Gibraltar.
- For taxpayers with an interest in a building situated in Gibraltar, an allowance is available for approved expenditure on the painting, decorating, repair or enhancement of the frontage of the building.