This combined with the ability to attract
skilled workers drawn by the appeal of its
Mediterranean location, low rates of personal
taxation, proximity to the UK and the rest of
Europe and the use of English language and
law make Gibraltar an extremely popular
choice for businesses which are considering
relocating.
Corporate Tax Regime
A company is deemed resident if its activity is
carried on in or from Gibraltar.
Resident companies are taxed on income
that is accrued or derived from Gibraltar and
unilateral relief is given for tax suffered in a
foreign country.
Corporation tax is charged at 10% (utility
companies and those that abuse a dominant position are taxed at 20%)
Dividends are not subject to taxation
There is no capital gains tax in Gibraltar
Tax on royalties is limited to 10%
Capital duty charged at a flat rate of
£10 applicable to initial creation and
subsequent increase to share capital as
well as on the issue of loan capital
The provision of the EU Parent Subsidiary
Directive has been transposed into local
laws.
Foreign Tax Credit- consideration given to
income subjected to tax in another jurisdiction to arrive at tax due in Gibraltar
Social Security payments for employers are
currently capped at a maximum of £32.97
per week.
HEPSS
The Government has introduced a special
employment tax status known as HEPSS (High
Executives Possessing Specialist Skills) as a
cost saving incentive for companies recruiting
senior staff.
The HEPSS rules mean that tax will only be
payable on the first £120,000 of income per
annum under the Gross Income Based tax
system which currently makes a maximum
income tax charge of £29,940 irrespective
of total income. This special tax treatment
applies only to the Gibraltar element of a
remuneration package.
HEPSS is available to individuals who possess
skills not available in Gibraltar and which
are in the Government’s opinion necessary
to promote and sustain economic activity
of a particular value to Gibraltar. The HEPSS
will occupy a senior position and earn in
excess of £120,000 in Gibraltar. The applicant
must not have been employed or resident
in the previous thirty six months and must
have residential accommodation for his own
use and adequate for his and his family’s
needs. Should the HEPSS individual change
companies his approval under the scheme will
be withdrawn.
General Employee Taxation
Gibraltar has a dual tax system where
employees are able to elect between an
allowance based system and a gross income
based system.
The gross income based system includes a
rate of 6% for low earners. The rate of tax paid
on the first £25,000 of income is just under
17% rising to a maximum overall rate of less
than 25% with a decreasing rate thereafter for
earnings in excess of £500,000.
Under the allowance based system there
is a reduced rate of 17%, a standard rate of
30% and a rate of 40% for earnings in excess
of £16,000. Allowances not only include an
amount for self and spouse (if applicable)
but also mortgage interest, life and health
insurance relief.
85% of people who pay tax in Gibraltar do so
at an effective rate of less than 20%.
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