There have been a number of new tax measures which have now been included as amendments to Gibraltar’s legislation as of 23^rd December 2024. These had previously been published as proposed tax measures earlier in 2024. These are summarised below.

Increase in late filing penalties for companies:

These changes were originally published in 2022 but will now come into effect on 1 January 2025. The penalties issued by the Income Tax Office up to 31 December 2024 were £50 for non-submission by the due date, a further £300 for non-submission after a further three months and a further £500 on non-submission after six months from the due date.

The new increased penalties for companies issued by the Income Tax Office are:       

Tax on profits from the sale of residential properties:

• Applies as from 1 January 2025, not 1 August 2024 as was previously proposed.
• Where any person owns or holds, directly or indirectly, five or more “taxable properties”, in whole or in part, the profit from the disposal of any of those “taxable properties” by that person will be taxable.  
• This tax applies irrespective of a person’s residence status.  
• Details are contained in the Income Tax (Amendment No. 2) Act 2024 (gibraltarlaws.gov.gi)

Increase in audit threshold:

• Applies to accounting periods ending on or after 1 July 2024.
• The audit threshold for companies has increased from £1.5m to £1.75m 

Restriction on offsetting profits against tax losses brought forward:

• Applies to accounting periods ending on or after 31 July 2024.
• There is now a restriction on the amount of profits that may be offset against tax losses brought forward from previous years.
• This only applies to entities carrying out a regulated activity within Section 5 of the Financial Services Act 2014, companies with an activity licensable under section 3(1) of the Gambling Act, or any connected person to such an entity.
• The amount of loss which may be offset in an accounting year is restricted to 50% of the taxable profit for that accounting year.
• Details are contained in the Income Tax (Amendment No. 4) Act 2024 (gibraltarlaws.gov.gi)

Transfer of tax losses as part of a group restructure:

• This is deemed to have come into operation on 1 July 2018 as this was announced in the 2018 budget.
• Where a company transfers a trade or business to another company as part of a group restructure, any corresponding tax losses may also be transferred so that those losses may be offset against profits from the business transferred.
• This will not apply if there is a change of ultimate ownership and a major change in the nature or conduct of that business within three years of the transfer.
• Details are contained in the Income Tax (Amendment No.3) Act 2024 (gibraltarlaws.gov.gi)

Global Minimum Tax: 

• The Global Minimum Tax Act 2024 (gibraltarlaws.gov.gi) was enacted on 23 December 2024.
• The Act provides for the implementation of a Domestic Top-up Tax (DTT) and an Income Inclusion Rule (IIR) in line with the OECD GloBE Model Rules, which apply for in-scope groups. 
• The DTT applies to Fiscal Years beginning on or after 31 December 2023 and the IIR applies to fiscal years beginning on or after 31 December 2024.
• Details are contained in the Global Minimum Tax Act 2024 (gibraltarlaws.gov.gi)

For any queries, please do reach out to me.