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Taxation of Companies in Gibraltar
There is currently a two-tier taxation system in Gibraltar, although recent legislation means that the situation is changing.
Exempt Companies
Exempt companies pay no tax, subject to registration with the Financial Control Licensing Unit (FCLU), for an annual fee of £450.
Changes in ownership or company activity must be notified to the FCLU prior to the change. Failure to do so could result in loss of exempt company status.
In order to comply with European Union agreements on taxation, the Gibraltar government has agreed to phase out the Exempt Company classification. As a result, no new tax exempt companies can be created and all existing exemptions will cease on 31st December 2010.
Any changes in legal or beneficial ownership will cause an immediate loss of tax exempt status.
Resident Companies
Resident companies are taxed on their income arising in, or remitted to, Gibraltar. Consequently, most private companies fall outside the scope of income taxation.
Companies are not generally required to submit tax returns unless requested to do so by the Income Tax Office. Where a company has no relevant income it is also, subject to shareholder approval, exempt from submitting audited accounts to the Companies Registry.
