Gibraltar corporate tax - guide for international expansion

Gibraltar's strategic location at the gateway between Europe and Africa, combined with its business-friendly tax environment, makes it an attractive destination for international companies. Understanding the corporate tax landscape is essential whether you're considering establishing operations or expanding your business to this British Overseas Territory.

Gibraltar operates under UK sovereignty but maintains its own tax system, offering competitive rates and modern regulatory frameworks. The territory has adapted to international tax standards while preserving its appeal as a financial services hub.

For businesses looking to establish operations in Gibraltar, having the right financial infrastructure is crucial. Wise Business can help streamline your international payments and currency management, making it easier to handle corporate tax obligations and day-to-day operations in Gibraltar pounds or other currencies.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Gibraltar Corporate tax rate in 2025

Gibraltar maintains a competitive corporate tax rate of 15% for most companies, which applies to profits accrued in or derived from activities carried on in or from Gibraltar. This rate remains significantly lower than many European jurisdictions and aligns Gibraltar with other competitive tax territories, while also complying with the OECD's global minimum tax initiative (Pillar 2).¹

The standard rate of 15% applies to companies that are resident in Gibraltar for tax purposes.¹ A company is considered resident if it is incorporated in Gibraltar or if its business is managed and controlled in Gibraltar. Non-resident companies are only taxed on profits attributable to activities carried on in Gibraltar through a permanent establishment.²

Gibraltar also offers a 0% tax rate on profits derived from qualifying activities outside Gibraltar for companies that meet specific conditions under the Gibraltar tax rules (due to its territorial basis of taxation).³ Additionally, there are special regimes for certain types of businesses, including utility and energy providers (which are subject to a higher rate of 20%), insurance companies, and collective investment schemes, which may be subject to different rates or exemptions.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Gibraltar

Corporate tax in Gibraltar is administered by the Income Tax Office, which operates under the Gibraltar Government. Companies must register for tax purposes and file annual returns, generally based on their financial year-end.⁴

Tax payments in Gibraltar are made in Gibraltar pounds (GIP), which is pegged at par with the British pound sterling. The Gibraltar pound is the local currency, though UK sterling is also widely accepted. Companies with functional currencies other than GIP must convert their accounts for tax purposes.

The tax liability for companies is assessed on their financial accounting period. Companies must file their tax returns, along with the final tax payment balance, no later than 9 months following the end of that accounting period.⁵

Companies are required to make advance payments of tax, known as Payments on Account (POAs), based on 50% of the previous year's tax liability for each payment. These payments are due in two instalments: 50% by 28 February and the remaining 50% by 30 September of the calendar year. Any final balance due (actual liability less POAs) must be paid when the return is filed (i.e., by the 9-month deadline).⁶

Late filing or late payment can result in significant penalties and surcharges, which are now tiered based on company size. For Micro/Small businesses, the penalty starts at £100 upon the due date, increasing by an additional £450 after 3 months and a further £750 after 6 months. For Medium businesses, the initial penalty is £750, rising by an additional £1,250 after 3 months and £2,000 after 6 months. Large businesses face an initial penalty of £1,500, with increases of an additional £3,500 after 3 months and £5,000 after 6 months.⁶

Additionally, surcharges apply for late tax payment: a 10% surcharge on the outstanding amount is imposed the day after the due date, with a further 20% if the tax remains unpaid after 90 days.⁶

For example, if a company with a turnover of £1.5 million operates with a 10% profit margin, giving taxable profits of £150,000, the corporate tax due would be:

£150,000 × 15% = £22,500

When expanding your business to Gibraltar, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Gibraltar

Staying compliant with Gibraltar’s tax regulations requires careful planning and adherence to statutory obligations. Here are some key points to keep in mind:

• Corporate tax return: Gibraltar applies a 10% corporate tax rate. Companies must file an annual income tax return supported by detailed accounts.⁷ Good corporate tax planning and management ensure accurate reporting and reduce the risk of errors or penalties.
• Accounting obligations: Annual accounts must be prepared in accordance with International Accounting Standards (IAS) or Section 243 of the Companies Act, providing an accurate and fair view of financial performance. They must be filed once every financial year: within 12 months for private companies and 10 months for public companies.⁸
• Registered office requirement: Every company must maintain a registered office in Gibraltar to receive legal correspondence, even if it is not the operational office.
• Director responsibilities: Directors are legally required to act in good faith, avoid conflicts of interest, and ensure the company remains solvent while fulfilling tax and filing duties.
• Penalties for non-compliance: Late filing fees range from £206.5 to £335, depending on the delay. Many businesses use corporate tax outsourcing services to streamline compliance, meet deadlines, and avoid these costs.⁸

International Expansion to Gibraltar

Gibraltar’s strategic location at the southern tip of the Iberian Peninsula makes it one of the most attractive gateways for global business expansion. Overlooking the entrance to the Mediterranean Sea, it serves as a major maritime hub linking Europe and Africa. Meanwhile, the Port of Gibraltar is among the busiest in the region, driving trade, logistics, and tourism.⁹

Connectivity is another advantage. Gibraltar is within easy reach of major European cities and offers a modern international airport with frequent daily flights to the UK and the EU.⁹ London is only 2.5 hours away, while Spain’s Malaga Airport is accessible by car. Investors can also access Morocco via short ferry or yacht crossings, enhancing Gibraltar’s role as a bridge between continents.¹⁰

A key reason businesses choose Gibraltar is its favourable tax system: The Gibraltar corporate tax rate is highly competitive, and companies benefit from the absence of capital gains tax, inheritance tax, and VAT. Property taxes remain low compared with other European jurisdictions.⁹

Besides this, individuals can also gain from exemptions on savings, pensions, and investment income. As the territory monitors global minimum corporate tax discussions, it remains a tax-efficient jurisdiction. Businesses should budget carefully for their corporate tax bill, note the corporate tax registration deadline, and ensure their new corporate tax obligations are met to remain compliant.

Gibraltar offers political and regulatory stability as a British Overseas Territory.⁹ Its robust financial services sector, leadership in online gaming, and pioneering regulatory framework for blockchain and cryptocurrency make it an attractive hub for specialised industries.¹¹

Below are the steps when starting a business in Gibraltar:¹²

1. Conduct market research and prepare a business plan.
2. Choose a company name, location, and entity type.
3. Register your business with Companies House Gibraltar.
4. Complete tax registration with the Income Tax Office.
5. File with the Ministry of Employment.
6. Open a business bank account and implement strong record-keeping systems.

Doing business internationally should be strategic. If you’re targeting busy yet business-friendly regions like Gibraltar, you should ensure your business has what it takes to scale there. You can seek professional help from Gibraltar corporate tax services to ensure you abide by all taxation regulations.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Gibraltar

To incorporate a business in Gibraltar, the first step is to confirm that the Registrar approves your proposed company name. Once accepted, you’ll need to prepare and submit the following documents under the Companies Act:¹³

• Application to Register a Company: the formal request to establish the business.
• Memorandum of Association: this foundational document defines the company’s relationship with the outside world. It specifies the name, registered office, business purpose, share capital, and subscribers’ commitments.
• Articles of Association: the company’s internal constitution, covering how shares are issued and transferred, the role and powers of directors, general meeting protocols, voting rights, dispute resolution, and profit distribution.

A £100 registration fee and £10 stamp duty apply, and standard incorporation takes around three working days. For urgent cases, same-day incorporation within 24 hours is possible for £200. Once approved, a Certificate of Incorporation is issued. Note that only licensed persons are legally permitted to provide company registration services.

Types of Businesses in Gibraltar

Gibraltar offers several business structures, each suited to different needs:¹⁴

• Limited Company: the most common structure, providing limited liability to shareholders while allowing the company to own assets, contracts, and borrow. It has perpetual succession, making it ideal for expansion.
• Partnerships: two or more individuals share profits, costs, and responsibilities. However, partners are personally liable for business debts, and the partnership dissolves if one partner leaves.
• Limited Liability Partnerships (LLPs): similar to partnerships but with limited liability protection. Each partner is not liable for another’s misconduct. LLPs must register with Companies House and submit annual accounts.
• Sole Traders: the simplest form, where individuals trade in their own name. Sole traders face unlimited liability but benefit from an easy setup and complete control over their business.

To support long-term planning, companies should be aware of corporate tax payment dates, dividend taxation rules, and how local corporate tax laws apply to their chosen business structure.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires careful planning and adherence to international standards. Companies operating internationally should maintain robust compliance frameworks and stay updated with evolving tax regulations.

Establish clear transfer pricing policies that align with OECD guidelines, particularly the Base Erosion and Profit Shifting (BEPS) framework. Gibraltar has committed to implementing BEPS measures and maintains exchange of information agreements with numerous jurisdictions to ensure tax transparency.

Leverage double taxation agreements where available. Gibraltar has a growing network of tax treaties, though more limited than larger jurisdictions. The territory benefits from certain UK tax treaties in specific circumstances, and businesses should seek professional advice to understand applicable reliefs.

Maintain comprehensive documentation of business activities and substance requirements. Gibraltar requires companies to demonstrate genuine economic activity within the territory to benefit from its tax regime. This includes having adequate staff, premises, and decision-making processes located in Gibraltar.

Regular compliance reviews and professional tax advice are essential, particularly given the evolving international tax landscape and Gibraltar's ongoing adaptation to post-Brexit arrangements with the EU and Spain.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Gibraltar efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Gibraltar

Who is liable for corporate tax in Gibraltar?

Companies that are resident in Gibraltar for tax purposes are liable to corporate tax on their worldwide profits. A company is considered resident if it is incorporated in Gibraltar or if its business is managed and controlled in Gibraltar. Non-resident companies are only taxed on profits attributable to activities carried on in Gibraltar through a permanent establishment.

Are there any tax incentives for businesses in Gibraltar?

Gibraltar offers several tax incentives, including a 0% tax rate on profits derived from qualifying activities outside Gibraltar for eligible companies. The territory also provides special regimes for insurance companies, collective investment schemes, and e-gaming operators. Additionally, there is no capital gains tax, inheritance tax, or wealth tax in Gibraltar.

What is the tax treatment of dividends in Gibraltar?

Dividends received by Gibraltar companies from other Gibraltar companies are generally exempt from tax. Dividends paid by Gibraltar companies to non-residents are not subject to withholding tax. However, the tax treatment can vary depending on the specific circumstances and the residence of the recipient.

What is the process for registering for corporate tax in Gibraltar?

Companies must register with the Income Tax Office within 3 months of commencing business activities in Gibraltar. The registration process requires submission of incorporation documents, details of business activities, and appointment of a local representative if the company is managed from outside Gibraltar. Companies must also register for social insurance contributions if they have employees.

What are the common pitfalls to avoid regarding corporate tax in Gibraltar?

Common pitfalls include failing to demonstrate adequate substance in Gibraltar, which can result in challenges to tax residence status. Companies should also ensure timely filing of returns and payments to avoid penalties and interest charges. Another frequent issue is inadequate documentation of transfer pricing policies for international transactions. Finally, businesses should stay updated with changing regulations, particularly those related to international tax compliance and post-Brexit arrangements.

Sources used in this article:

1. PwC Tax Summaries: Gibraltar Corporate Income Taxes
2. PwC Tax Summaries: Gibraltar Corporate Residence
3. PwC Tax Summaries: Gibraltar Income Determination
4. Gibraltar Income Tax Office: Corporate Taxation
5. PwC Tax Summaries: Gibraltar Tax Administration
6. Gibraltar Income Tax Office: Guidance Notes for Companies, Aug 2025 (PDF)
7. Offshore-Protection: How to Set Up a Company in Gibraltar
8. Gibraltar Companies House: General Information (PDF)
9. Richardsons Properties: Why Invest in Gibraltar
10. Bentley Investments: Investment in Gibraltar
11. Sovereign Group: Who Can Benefit from Setting Up a Company?
12. Gibraltar Income Tax Office: Businesses and Corporations
13. Gibraltar Companies House: Companies Information
14. Gibraltar Companies House: Overview

Sources last checked 01/10/2025