Gibraltar accounting and tax considerations

Gibraltar accounting and tax services

Many clients choose to outsource their Gibraltar accounting and tax obligations to Tetra Consultants. Our accounting and tax team will timely complete your firm’s financial statements, corporate tax returns and manage auditors on your behalf and without the need to travel.

By outsourcing accounting and tax obligations to Tetra Consultants, you can enjoy reduced overhead costs and timely reporting and filings. Our accounting team will explain to our clients all required deadlines and expectations before the start of every engagement.

Thereafter, Tetra Consultants will prepare the required fillings in advance to ensure we meet all stipulated deadlines agreed at the start of the engagement. Tetra Consultants will send a weekly or bi-weekly update to our clients, ensuring all parties are aware of upcoming deadlines. Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.

According to Gibraltar Income Tax Office,

• The rate of Corporation Tax is 10% on taxable profits.
• With effect from 1st January 2011 the rate of 10% applies to all companies, except utility companies, such as electricity, fuel and water providers, and companies enjoying and abusing a dominant market position. These companies will pay a higher rate of 20%.
• Telecommunication companies will be taxed at 20% on only their telecommunication services, with other taxable income being taxed at the standard rate of 10%.
• Consideration must be given to multiple aspects of the tax legislation that can modify the taxable profits of a company. These include (but is not limited to); income that is not subject to tax, special deductions allowed, tax treatment of assets, capital allowances, non-deductible expenses and others.
• The Income Tax Act 2010 allows for losses to be carried forward to offset against future taxable profits but it is not permissible to carry back tax losses.
• For Gibraltar onshore companies, income generated by doing business in Gibraltar will be subjected to a corporate tax rate of 10% This tax rate is one of the lowest in the world.
• For Gibraltar offshore companies, income generated by doing business outside of Gibraltar will be subjected to no corporate tax. In order to qualify for this, your business needs to be properly structured.
• In Gibraltar, there are no withholding taxes for dividends, interests and royalties.
• All Gibraltar businesses are required to submit financial statements to the Gibraltar Income Tax Office within nine months after the end of the financial year.
• If the annual sales is above £500,000, your business is required to be audited.
• Under OECD’ legislation, Gibraltar has signed 27 Tax Information Exchange Agreements (TIEAs).

Filing requirements

• 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.

Filing of tax returns

The size of the company determines the type of accounts to be filed with the tax return:

• Large companies:

Full accounts including a balance sheet, profit and loss account, directors’ report and auditors’ report.

• Medium sized companies (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 (Turnover not exceeding £6.5 million, less than £3.26 million net assets and less than 50 employees):

An Abridged Balance Sheet only and the filings must be done within nine.

Personal tax

• Tax resident individuals can choose to be taxed under one of two taxations systems; the Allowance Based System (ABS) or the Gross Income Based system (GIB).
• Generally speaking, the Allowance Based System has a higher top tax rate but allows for numerous deductions by way of allowances depending on the circumstances of the individual and spouse. These allowances reduce the amount that is subject to tax.
• The Gross Income Based system only has a few allowances available to the individual but a more favourable set of tax bands and lower top tax rate. It is also notable that that at higher rates of income the tax rate gradually reduces.
• The application of this unique dual system means that the individual can elect to be taxed under the method that is most favourable to him.
• In addition, special tax statuses exist in Gibraltar that are available by application to the Finance Centre Director and under strict terms & conditions. These special statuses cap the amount of tax payable by the individual.

Filing Requirement

• Both individuals and self-employed individuals are required to submit their tax returns for the year up to the 30th June by the 30th November of every year.
• Self employed individuals are required to support their tax return with accounts drafted up to the period ended 30th June of the relevant tax year.

Hence the advantage of Gibraltar tax system

• 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”)

Tetra Consultants will assist you through the full process of Gibraltar company registration hassle-free. Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.