In his Budget Address delivered on 30 June 2025, the Chief Minister outlined a range of tax-related measures amid ongoing negotiations under the new EU Treaty. 

While core tax structures such as corporate and personal income tax remain unchanged, the introduction of a phased Transaction Tax and alignment of excise duties with EU minimums signal a significant shift in Gibraltar’s fiscal landscape. 

Accompanying these are changes to social insurance contributions, minimum wage increases, and a renewed focus on tightening residency rules, particularly for future applicants under Category 2 status. 

Tax & Social Insurance

• Corporate Tax: Remains unchanged at 15%.
• Personal Income Tax: No adjustments.
• Import Duties: No changes announced.
• Social Insurance Cap: Employers and employees’ maximum contribution cap increases by 5%.

Introduction of Transaction Tax and Excise Duties 

Once applicable, the introduction of the Transaction Tax will be phased over three years:

• Year 1: 15%
• Year 2: 16%
• Year 3: 17%

Reduced Rate (5%) applies to select items, such as children’s clothing, antiques, and bicycles.

No transaction tax (0%) this is to be aligned with the EU super‑reduced rate and will apply to essentials like food, water, medicines, books and electricity.

Exempt Items Include:

• Goods imported but not sold locally
• Fuel and supplies for ships
• Airline supplies

Excise duties in line with EU minimums will apply to tobacco, alcohol and fuel.

Annual Review: Independent monitoring to assess market distortions, with flexibility to adjust rates as required.

Gibraltar Residency / Category 2 Status

The Chief Minister stressed the need for stricter review of residency applications under the new EU Treaty, especially for those seeking to live in Gibraltar. While existing Cat 2 residents will keep their rights, future applications will face tougher criteria. A new committee, led by the Minister for Economic Development and including key officials and experts, will advise on residency reforms by November. 

 Other Key Measures

• Minimum Wage: Rising 6%—from £8.90 to £9.50 per hour.
• Stamp Duty: A review is currently underway to assess the potential exemption of stamp duty on intra-family transactions.