Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

July 12, 2023
2023-1224

Gibraltar issues Budget 2023/24

  • Gibraltar's recently announced budget for fiscal year 2023/24 proposes to decrease taxes for most individuals while making few changes for corporations.
  • This Tax Alert highlights the proposals.

On 11 July 2021, HM Government of Gibraltar announced its budget measures for the year 2023/24.

The measures include a slight decrease in tax rates for most individuals, together with a small number of tax initiatives for individuals. Very few changes were made to corporate taxation.

Key highlights of the announcement are summarized below.

Key highlights

Personal tax

  • There are no changes to the tax bands under either the Allowance Based System or Gross Income Based System.
  • Last year's budget introduced a 2% across-the-board increase in tax rates, to apply for two tax years. For 2023/24, this is partly reversed by a 1% reduction for all taxpayers with taxable income below £100,000 per annum. This will reduce the maximum effective (overall) tax rate for such taxpayers from 27% to 26%.
  • Tax rates for taxpayers with taxable income of £100,000 or more will remain unchanged, with the maximum effective (overall) tax rate remaining at 27%.
  • The Chief Minister reaffirmed his intention for the temporary increased rates to end in 2024/25, with the maximum effective rate for all taxpayers reverting to 25%.
  • Private sector employers may provide tax-free assistance to their employees on the same terms as those announced in the budget for public sector employees (i.e., a one-off lump-sum payment). Such payments will not be a deductible expense for corporation tax purposes. The equivalent (tax-free) payments referred to for public sector employees are £1,200, £900 or £750, depending on the amount of basic salary.
  • Taxpayers may offset their tax liability by claiming a deduction amounting to 10% of the cost of their gym membership, fees paid to a personal trainer registered with the tax authorities, and private school tuition fees paid in Gibraltar.

Corporate taxation

  • A consultation process is to be set up in respect of new incentives, a distinct new regime for companies within the scope of Pillar Two and a domestic minimum top-up tax. It was announced that Gibraltar's implementation of Base Erosion and Profit Shifting (BEPS) Pillar Two is to take effect no earlier than for accounting periods beginning on or after 31 December 2024.

———————————————

For additional information with respect to this Alert, please contact the following:

EY Limited Gibraltar

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct