GIBRALTAR Law and Practice Contributed by: Emma Lejeune, Stuart Dalmedo, Nicholas Isola, James Castle and Louise Anne Turnock, ISOLAS LLP
The allowances/relief available under the GIBS include: • first-time home purchase; • mortgage interest;
There is also an exemption (subject to certain conditions) from the employer’s and employee’s social insurance contribution in respect of an employee’s secondary employment. A credit in respect of the employer’s social insur - ance contributions is available to businesses with ten employees or less. This is increased to 20 employees for new businesses within the first year of operation. 5.2 Taxes Applicable to Businesses Companies are taxed on a territorial basis of taxation, meaning that only income accrued in or derived from Gibraltar will be subject to taxation in Gibraltar. Accrued in and derived from refers to the location of activities, which gives rise to the profits of the company. A business whose income arises from an under - lying activity that requires a licence and regula - tion under any law of Gibraltar (such as a busi - ness licence or licence issued by the Gibraltar Financial Services Commission), or is licensed in another jurisdiction but enjoys passporting rights into Gibraltar, shall have its income deemed as accruing in and deriving from Gibraltar. Intercompany loan interest (which exceeds GBP100,000 per annum) and royalty income shall be deemed to accrue in and derive from Gibraltar if it is received by a company registered in Gibraltar. Intercompany loan interest and roy - alty income will be subject to tax at 15%. The standard rate of taxation for a company is 15%. There is no VAT or withholding tax on interest, dividend or royalty payments.
• pension contributions paid; and • medical insurance premiums paid.
The tax rates under the GIBS are as follows. • Individuals with gross assessable income up to GBP25,000: (a) 6% on the first GBP10,000; (b) 20% on GBP10,001 to GBP17,000; and (c) 28% on the balance. • Individuals with gross assessable income of more than GBP25,000 and up to GBP100,000: (a) 16% on the first GBP17,000; (b) 19% on GBP17,001 to GBP25,000; (c) 25% on GBP25,000 to GBP40,000; (d) 28% on GBP40,001 to GBP100,000; and (e) 25% on the balance. Any taxpayer with income of GBP11,450 or less is not liable to income tax in Gibraltar. Social Insurance Social insurance contributions are payable by every employee in any week in which they work. Employee contributions are 10% of gross earn - ings, subject to a minimum of GBP13.65 per week and a maximum of GBP38.85per week. Employer contributions are 18% of gross earn - ings subject to a minimum of GBP30.45 per week and a maximum of GBP53.55per week. Individuals aged 60 and over are exempt from paying the employee’s share of social insurance contributions.
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