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Personal Tax

The Government currently offers a dual tax system, allowing taxpayers to be taxed under the system that benefits them the most.

The tax year runs from 1 July to 30 June. With effect from 1st July 2007 the Gibraltar Government introduced a dual tax system which allows Gibraltar taxpayers to elect to be taxed under the allowance based system or opt for a Gross Income Based system ("GIBs") whichever results in the most benefit to the taxpayer. Personal tax returns are due by 30 November following the tax year end. The Income Tax Office will calculate the tax payable for the year under both systems and then apply the one that results in less tax payable by the taxpayer. Any amounts over or under paid through the Pay As You Earn (PAYE) system will then be refunded to or requested from the taxpayer.

Allowance Based System

For those individuals electing to be taxed under the allowance based system their taxable income is arrived at by deducting applicable personal allowances from their assessable income, the taxable income is then taxed at the following rates:

Taxable Income Bands Rate %
£0-£4,000 15
£4,001-£16,000 24
Over £16,000 40

 

A tax credit of £300, or 2%, whichever is greater, is available. There are various allowances available to individuals depending on their circumstances. Individuals will become eligible to receive these allowances when they become resident in Gibraltar. Note that most allowances are reduced by one twelfth for each complete calendar month that the individual is not resident in Gibraltar during the relevant year of assessment.

Gross Income Based System ("GIBs")

GIBs, the alternative system, does not apply any allowances other than (in related to 2013/2014 tax year) a maximum deduction of £1,000 is available for mortgage interest payments related to Gibraltar property homeowners; and a maximum deduction of £5,000 is available in respect of approved expenditure incurred on the frontage of property; a maximum of £5,000 for first time Gibraltar home purchases; a maximum of £1,000 p.a. employee contribution towards approved pension schemes; and a maximum of £2,000 p.a. on employer contributions towards medical health insurance. Gross income (including benefits in kind) is taxed at the following rates:

Taxable Income Bands for total income < £25,000 p.a. Rate %
£0-£10,000 6
£10,001-£17,000 20
Over £17,000 28

 

Taxable Income Bands for total income > £25,000 p.a. Rate %
£0-£17,000 16
£17,001-£25,000 19
£25,001-£40,000 25
£40,001-£105,000 28
£105,001-£500,000 25
£500,001-£700,000 18
£700,001-£1m 10
Over £1m 5

There are certain sources of income such as investment income that fall outside the scope of taxation. Also where individuals receive taxable income which is not under PAYE, this requires self-assessment and deadlines regarding payments on account and final payment. Please refer to our information sheets in the Publications section of our website for more information on allowances, tax rates & deadlines.

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