Tax laws Gibraltar (BOT)
Gibraltar, a British Overseas Territory, maintains a distinct tax system separate from that of the United Kingdom. The jurisdiction offers several tax advantages, including the absence of capital gains tax, wealth tax, sales tax, or value-added tax (VAT). Import duties are applied to goods imported into Gibraltar, typically ranging from 0% to 12%.
Corporate Taxation:
Corporation Tax: The standard corporate tax rate in Gibraltar is 10%. However, energy and utility providers are subject to a higher rate of 20%, which includes a 10% surcharge.
Withholding Tax: There is no withholding tax on dividends. Interest paid to non-residents is also exempt from withholding tax, while interest paid to resident companies is taxed at 22%.
Personal Taxation:
Gibraltar offers two systems for personal income taxation:
Gross Income Based System: This system applies tax rates directly to gross income without allowances. For instance:
Income up to £10,000 is taxed at 8%.
Income between £10,001 and £16,000 is taxed at 20%.
Allowance Based System: This system provides various allowances and applies tax rates to the remaining income:
The first £4,000 is taxed at 17%.
The next £12,000 is taxed at 30%.
Any income above £16,000 is taxed at 40%.
Other Taxes:
Stamp Duty: Applicable primarily to real estate transactions, with rates varying based on property value. For example, properties costing up to £200,000 are exempt, while higher-valued properties are taxed at rates between 2% and 3.5%.
Social Insurance Contributions: Both employees and employers are required to make social insurance contributions, with specific rates and caps.
International Agreements:
In 2019, Gibraltar, the United Kingdom, and Spain signed the International Agreement on Taxation and Protection of Financial Interests concerning Gibraltar. This agreement addresses tax cooperation, criteria for tax residency for individuals and companies, and procedures for administrative collaboration.
Gibraltar's tax system, characterized by its low-tax regime and absence of certain taxes, has positioned it as a notable international finance center. The territory has committed to international standards of tax transparency and has signed multiple Tax Information Exchange Agreements (TIEAs) with various countries, including the UK, US, and Germany.
For the most current and detailed information, it's advisable to consult the Gibraltar government's official publications or seek professional tax advice.
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