GIBRALTAR Law and Practice Contributed by: Emma Lejeune, Stuart Dalmedo, Nicholas Isola, James Castle and Louise Anne Turnock, ISOLAS LLP
the employer accepts the request for recogni - tion then the parties must decide on a bar - gaining procedure. However, if the employer rejects the request for recognition, but (a) agrees to negotiate further, then a further 20 working days will be provided to negotiate (which can be extended by agreement of both parties under Sub-Regulation (7)) or (b) does not agree to negotiate further, then the trade union may apply to the Director of Employ - ment for statutory recognition in accordance with Regulation 5 (Sub-Regulation 4 (6)). Regulation 5 contains the regulations relating to an application to the Director of Employ - ment for a statutory recognition order direct - ing the employer to recognise the trade union, but there are basic requirements that must be fulfilled for an application for statutory recognition including that the employer must employ a minimum of 21 employees or at least average 21 employees in the 13 weeks ending with the day on which the request was received. There are regulations focus - ing on collective agreements (Regulation 7), bargaining units and disclosure of information (Regulation 10) and rights to be accompanied to a disciplinary or grievance hearing (Regula - tion 10).
For employees, tax on the income from employ - ment is deducted from wages and salaries under the pay-as-you-earn (PAYE) system. An employ - er is required to deduct tax from the wages of the employee on each pay, and then pay the tax by the 15th day of the following month. Taxpayers may, in their tax return, choose between an allowance-based system (ABS) or a gross income-based system (GIBS). However, irrespective of the system opted for, on final assessment the Income Tax Office will apply the system most beneficial to the taxpayer. Allowance-Based System (ABS) This system enables an individual to claim cer - tain allowances against assessable income. Allowances include: • personal; • spouse; • child; • medical insurance premiums paid; • life insurance premiums paid; • pension contributions paid; • first-time home purchase; • mortgage interest; • social insurance contributions paid; and • pensioner. The tax rates under the ABS are as follows: • 14% on the first GBP4,000; • 17% on the next GBP12,000; and • 39% on the balance. Gross Income-Based System (GIBS) Under the GIBS, a taxpayer is entitled to very few allowances/reliefs, but the applicable rates are lower.
5. Tax Law 5.1 Taxes Applicable to Employees/
Employers Income Tax
Income tax is charged on the profits or gains from any office or employment arising in or from Gibraltar, including any allowances, perquisites or benefits in kind (such as expense payments, vouchers and credit tokens, living accommoda - tion, car expenditure and loans to employees).
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