Gibraltar’s Tax System


Gibraltar’s Corporation Tax System Under Investigation by the E.U.: The EU in its efforts to strike at Tax Havens has initiated an investigation into Gibraltar`s Corporate Tax methods.

EU Investigates Gibraltar`s Tax System


An investigation has been initiated by the European Commission into Gibraltar’s new corporation tax system in order to verify whether it is in agreement with the E.U. state aid rules by giving the advantage to some enterprises and especially “offshore” legal entities, for example the ones who do not have their permanent operations in Gibraltar.


This research will be concentrated on a corporation tax exemption for the income which is received by interest, royalties etc, and known as passive income. Further information of the course of this investigation will be placed on the Commission’s State Aid Register with the case number of SA.34914.


The new corporate tax system was presented by Gibraltar in the year 2010. All income is being taxed either simply if its origin is in Gibraltar or it came from an established business there. However an exemption was granted regarding passive income not counting the location source of the income.


This examination by the Commission it appears as a reaction to a complaint in June 2012, which came from Spain, alleging that the corporate tax system of Gibraltar is favoring “offshore” companies.


On 1st July 2013, Gibraltar revised its laws to annul the exemption for regarding the interest for inter-company loan surpassing 100,000GBP yearly which was received abroad of from Gibraltar. However, the research concerning the exemption and whether or not it broke state aid rules when it was put in effect, will go on.


Gibraltar’s tax regime was often investigated through history by the E.U. Commission, during which Gibraltar was forced to make significant changes.