Taxes and Tax Schemes in Gibraltar | What You Need to Know in 2025

Gibraltar, a British Overseas Territory renowned for its strategic location at the gateway to the Mediterranean, operates a highly attractive tax system that draws individuals and businesses from around the world. Located at the southern tip of the Iberian Peninsula, Gibraltar boasts a sophisticated financial services sector and a thriving online gaming industry.

Gibraltar's economy has shown remarkable resilience through various global challenges, including Brexit, by maintaining its position as a significant financial center. The territory has successfully balanced the need for competitive tax rates with international compliance standards, emerging as a leading jurisdiction for financial services and online gaming companies.

The expat community in Gibraltar is substantial and diverse, with many drawn to its tax advantages, Mediterranean climate, and English-speaking environment. Major sectors like financial services, online gaming, and tourism provide numerous opportunities for foreign professionals seeking tax-efficient employment.

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Gibraltar Income Tax

Gibraltar employs a progressive income tax system with two optional schemes for residents. Under the Allowance Based System, income is taxed in progressive bands from 14% to 39%, with various personal allowances available. The Gross Income Based System offers an alternative structure with rates ranging from 6% to 28%, often proving more beneficial for higher earners.

The system includes significant allowances for families, including spouse allowances, child deductions, and provisions for educational expenses. Residents can choose whichever system results in the lower tax liability, providing flexibility for different income situations.

Summary:

• Two tax systems available to residents
• Personal allowances under the Allowance Based System
• Flexible choice between systems annually

If you want to have a better understanding of the taxes you should pay on personal income in Gibraltar, you can use the personal tax calculator in the Taxation section of the Gibraltar page.

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Gibraltar Tax on Overseas Income‍

Gibraltar operates on a territorial basis of taxation, meaning that only income accrued in or derived from Gibraltar is taxable. This creates significant advantages for international investors and professionals managing global income streams.

Tax residency applies to individuals spending 183 days or more in Gibraltar during a tax year, or more than 300 days across three consecutive years. The availability of accommodation in Gibraltar also factors into residency determination.Summary:

• Territorial tax system benefits international income
• Clear residency rules based on presence
• Non-Gibraltar income generally untaxed

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Gibraltar Tax on Investments‍

Investment income in Gibraltar receives favorable treatment. The territory imposes no capital gains tax, inheritance tax, or wealth tax. Dividend income from Gibraltar companies is tax-free for residents, while interest income may be taxable depending on source and circumstances.

The investment landscape particularly benefits from the absence of withholding taxes and the territorial nature of the tax system. This creates opportunities for efficient investment structuring and wealth management.Summary:

• No capital gains or inheritance tax
• Favorable treatment of investment income
• Territorial system benefits international investments

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Gibraltar Corporate Taxation‍

Corporate tax in Gibraltar stands at 12.5%, with notable advantages for new businesses. Companies starting operations can benefit from a 0% rate for their first three years, subject to specific conditions regarding local employment and office space.

The corporate tax framework includes full deductibility for business expenses, capital allowances for investment in equipment and technology, and no withholding taxes on dividends, interest, or royalties. This creates an attractive environment for international business operations.Summary:

• Competitive 12.5% corporate tax rate
• Start-up incentives available
• No withholding taxes

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Special Tax Regimes‍

Gibraltar offers specialized tax statuses designed to attract high-net-worth individuals and key professionals. The Category 2 Individual status limits tax liability to £29,880 annually, requiring a minimum annual income of £80,000 and suitable accommodation in Gibraltar.

The High Executive Possessing Specialist Skills (HEPSS) status targets key professionals, taxing only the first £120,000 of earned income. This requires a minimum salary of £120,000 and skills deemed essential to Gibraltar's economy.

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Regional Comparison

‍Tax Planning for Gibraltar

‍Effective tax planning in Gibraltar requires careful consideration of several key areas. The choice between tax systems should account for current and anticipated future income, available allowances, and personal circumstances. International professionals should maintain clear documentation of their presence in Gibraltar for residency purposes.Special status applications require comprehensive preparation, including proof of income, accommodation arrangements, and professional qualifications. Regular review of tax positions ensures continued optimization as circumstances change.