New Income Tax Act
The New Act lays the foundations for the reduction of Company Tax in Gibraltar from 22% to 10% as from 1 January 2011, to coincide with the definitive abolition of the historical tax exempt company regime.
This legislation ends all distinction between “onshore” and “offshore” business. Together with the tax information exchange agreements being entered into by the Government, and Gibraltar’s full integration in the EU and compliance with EU financial services regulation, money laundering and co-operation rules, the new Tax Act completes Gibraltar’s 14 year transition from tax haven to mainstream European financial services centre.
Only by creating a climate of compliance can low company tax and further lowering of personal taxes be assured. The new Act therefore introduces tough anti-avoidance measures and default financial and legal penalties to help ensure that all pay the taxes that are due – thus making the low rate possible for everyone.
The legislation also introduces severe criminal consequences, as well as personal liability, for directors and managers of companies that withhold tax from workers pay and then fail to pay it over to the Government promptly.
To level the playing field between PAYE payers on the one hand and companies and self employed people on the other, the latter will, in future, have to pay tax during the tax year on account of that year’s tax bill. This brings to an end the historical position whereby PAYE payers suffer tax at source, while companies and the self employed could delay paying their tax for several years. The new system is thus fairer to all.
The legislation also introduces a system of self assessment and hefty financial penalties for defaulting on payment or returns.
The new legislation is based closely on the old Income Tax Act, with major amendments to bring about the changes now being introduced. For ease of use the new legislation takes the form of a new, consolidated Act.
For further information, contact:
| Tel: (350) 20074015 |
| Regal House, Queensway |
| Email:info@bakertillygibraltar.gi |
| Website: www.bakertillygibraltar.gi |