The bill setting out the proposed Global Minimum Tax Act 2024 (the Act) in Gibraltar was published on 10 December 2024.

The minimum rate for the purposes of the tax would be 15%, with the amount to be determined under the Organisation for Economic Co-operation and Development's (OECD's) Base-erosion and Profit Shifting (BEPS) Model Rules, with certain modifications.

Domestic Top-up Tax (DTT)

The DTT is proposed to apply to Domestic Constituent Entities and Domestic Joint Ventures (JVs) located in Gibraltar, as these entities are defined by the Pillar Two Model Rules. The tax would also extend to "Wholly Domestic Groups," defined as groups for which the Ultimate Parent Entity and all Constituent Entities are located in Gibraltar.

The DTT would first apply for Fiscal Years beginning on or after 31 December 2023.

The Government of Gibraltar first announced the DTT on 19 December 2023 in a Ministerial Statement and Press Release, which indicated that, for the first year of application, the DTT would apply to members of in-scope MNE groups that are parented outside Gibraltar, as long as the parent jurisdiction has adopted the Pillar Two Rules. However, the proposed legislation does not include any limitation restricting application of the DTT to entities with a parent in a Pillar Two jurisdiction.

The DTT would not apply to Investment Entities or Insurance Investment Entities.

A Designated Local Entity would be required to file a Global anti-Base Erosion (GloBE) Information Return in Gibraltar on behalf of all Domestic Constituent Entities, Domestic JVs and Domestic JV subsidiaries. However, a GloBE Information Return would not need to be filed in Gibraltar if a GloBE Return has been filed in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Gibraltar. In that case, a notification would need to be filed in Gibraltar no later than three months prior to the filing due date for the Return.

Income Inclusion Rule (IIR)

The IIR is proposed to apply to an Ultimate Parent Entity, Intermediate Parent Entity or Partially Owned Parent Entity, determined in line with the Pillar Two Model Rules. This would apply to Fiscal Years commencing on or after 31 December 2024.

An Ultimate Parent Entity or Designated Filing Entity is required to file a GloBE Information Return on behalf of the MNE Group. However, a GloBE Information Return would not need to be filed in Gibraltar if such a Return had been filed in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Gibraltar. In that case, a notification would be required to be filed in Gibraltar no later than three months prior to the filing due date for the Return.

Filing and payment deadlines

The filing deadline for the first Fiscal Year that the MNE group is subject to the Act would be the 18th month following the end of the Fiscal Year, provided that the group has not been required to file a GloBE Information Return in another jurisdiction for a previous year. Otherwise, the filing deadline would be the last day of the 15th month following the end of the Fiscal Year.

The DTT is payable on or before the due date for filing the GloBE Information Return.