Gibraltar Tax Deductions

Corporate Tax Deductions:

• Allowable deductions for corporate tax purposes include expenses wholly and exclusively incurred in the production of income.

These deductions can encompass operational costs, such as:

• Salaries and wages.
• Rent and utilities.
• Cost of goods sold.
• Interest expenses, subject to specific limitations.  
• Depreciation of assets, calculated according to established schedules.
• Specific deductions related to research and development activities may be available.

Individual Income Tax Deductions:

• Under the Allowance Based System (ABS), individuals can claim specific allowances, which reduce their taxable income.  
  • These allowances include:
    • Personal allowances.
    • Allowances for dependents.
    • Allowances for mortgage interest payments on a primary residence, subject to limitations.  
    • Allowances for private health insurance.  
    • Under the Gross Income Based System (GIBS) there are very limited deductions.
• Interest Deductions:
  • Interest expenses are deductible, provided they are incurred for business purposes.
  • Limitations may apply to interest deductions, particularly concerning related-party transactions.
• Depreciation:
  • Depreciation of capital assets is deductible, with rates and methods defined by Gibraltar's tax legislation.
• Charitable Donations:
  • Donations to approved charitable organizations may be deductible, subject to specific conditions.
• Business Losses:
  • Business losses can be carried forward, subject to limitations.  
• Stamp Duty:
  • Stamp duty paid on the acquisition of property is added to the cost basis of the property, thus it does impact the later calculations for any later potential taxable event regarding that property.
• Property Taxes:
  • Property tax payments are deductible as a business expense if the property is used for business purposes.
• Import Duties:
  • Import duties are added to the cost basis of the items imported, therefor impact any later taxable events regarding the imported goods.