Gibraltar is widely known as a tax-efficient jurisdiction, attracting individuals and companies from around the world. Its favourable tax regime, combined with British legal traditions and EU-style regulations, makes it a strategic choice for high-net-worth individuals, entrepreneurs, and corporations.
Personal Tax Advantages
- No Capital Gains Tax
- You won’t pay tax on profits from the sale of shares, property (outside Gibraltar), or other investments.
- No Inheritance Tax or Wealth Tax
- Unlike many European countries, Gibraltar imposes no death duties, inheritance tax, or annual wealth tax.
- No VAT
- Goods and services in Gibraltar are not subject to Value Added Tax. This makes everyday purchases and certain business operations cheaper.
- Low Personal Income Tax
- Gibraltar operates a dual tax system (individuals can be assessed under either the Gross Income Based system or the Allowance Based system).
- Tax rates are progressive, but the maximum effective rate is typically between 20% and 25%, which is lower than in many European countries.
- Special Tax Residency Schemes
- Category 2 Residency (Cat 2):
- Designed for high-net-worth individuals with at least £2 million in worldwide assets.
- Income tax is capped – Cat 2 residents pay tax only on the first £118,000 of assessable income (as of 2025), resulting in a maximum annual liability of around £44,000.
- No tax is payable on worldwide income above that cap.
- Requirement: Must own or rent approved residential accommodation in Gibraltar for exclusive use.
- HEPSS (High Executive Possessing Specialist Skills):
- Designed for senior professionals whose expertise benefits Gibraltar’s economy.
- Qualifying individuals pay tax only on the first £160,000 of their earnings (annual liability roughly £40,000).
- Requirement: Must earn at least £160,000 per year, and occupy approved residential accommodation in Gibraltar.
- Category 2 Residency (Cat 2):
Corporate Tax Advantages
- Low Corporate Tax Rate
- The standard corporate tax rate is 12.5%, applied only to profits accrued in or derived from Gibraltar.
- Offshore income (profits earned outside Gibraltar) is not taxable locally.
- No Withholding Taxes
- No tax is withheld on dividends, royalties, or interest payments leaving Gibraltar.
- EU-Style Regulation with Flexibility
- Gibraltar companies are regulated under UK-style common law and have access to a strong financial services framework.
- The jurisdiction is particularly attractive for financial services, gaming, shipping, and technology companies.
- No VAT or Sales Tax
- Companies do not need to charge VAT on their services, making Gibraltar particularly appealing for online businesses, e-commerce, and digital service providers.
Residency & Time Requirements
To qualify as a tax resident in Gibraltar, individuals must:
- Spend at least 183 days in Gibraltar during a tax year (1 July – 30 June), or
- Spend more than 300 days over a three-year period in Gibraltar.
👉 This is the standard test for ordinary residency.
- Category 2 and HEPSS Residents:
- There is no strict minimum-stay requirement, but you must demonstrate genuine residence and maintain an approved home in Gibraltar.
- Many Cat 2 residents use Gibraltar as a base while spending time abroad, as long as their centre of life and registered accommodation remains in Gibraltar.
For companies, tax residency is determined by:
- Being managed and controlled in Gibraltar.
- Having profits accrued in or derived from Gibraltar.
Why Gibraltar Attracts Expats and Businesses
- Low, predictable tax regime with no hidden levies.
- Stable legal system based on English common law.
- English-speaking, with strong links to the UK.
- Strategic location at the gateway between Europe and Africa.
- Access to skilled professionals in finance, gaming, and shipping.
✅ In short: Gibraltar offers one of the most attractive tax regimes in Europe. Individuals benefit from capped tax schemes and no wealth-related taxes, while businesses enjoy low corporate rates and no VAT. To qualify as a resident, most people need to spend 183 days per year in Gibraltar (unless on a special residency programme like Cat 2).