Gibraltar is a very attractive country from a taxation point of view, which is why the number of foreign companies setting up operations here has increased exponentially. Tax authorities in Gibraltar levy one of the lowest corporate taxes in the EU, while other incomes are exempt from taxation. Until now Gibraltar has not signed any double taxation agreement yet. Its only arrangement in terms of avoiding double taxation is with the United Kingdom. However, Gibraltar has signed several tax information exchange agreements in order to provide transparency related to the taxation of foreign individuals and companies operating in The Rock.
Foreign companies benefit from the same advantages as local companies in Gibraltar. At the moment, the corporate tax imposed in this country is 10% and it applies to the income generated within a financial year. Gibraltar does not levy any capital gains tax or value added tax. Branch offices of foreign companies in Gibraltar will be taxed at the local tax rate.
When it comes to the taxation of individuals, Gibraltar imposes the income on the worldwide income, provided that they are residents. Foreign citizens living or working in Gibraltar for less than 183 days within a calendar year will not be subject to the income tax.
In lack of double taxation treaties, foreign companies or citizens paying taxes in Gibraltar can benefit from reliefs on the taxes paid in their home countries, once they have filed evidence with the Gibraltar tax authorities. If a deduction is granted to a foreign company in accordance with a double tax agreement, Gibraltar will also grant the deduction.
You can also watch our video on the Gibraltar double tax treaties:
Gibraltar has recently started to sign tax information exchange agreements (TIEAs) in accordance with the Organization for Economic Co-operation and Development (OECD) model. Among the countries Gibraltar has signed these agreements with are Australia, Germany, France, Ireland, Italy, Poland, Malta and the United States of America.
For more information about taxation in Gibraltar and possible double tax agreements, you can contact our local company formation representatives.