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Gibraltar: Relief for businesses affected by coronavirus (COVID-19)

Gibraltar: Relief for businesses, coronavirus

The Chief Minister on 16 March 2020 announced a series of measures to help businesses in Gibraltar that have been affected by the coronavirus (COVID-19) crisis.

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Most of these initial measures are aimed at businesses in the hospitality, leisure, distributive, and catering sectors. More measures are currently being reviewed and considered by the government. Further announcements are expected.

Employers in all sectors, during the second quarter of 2020, will be allowed to defer their payments of “pay as you earn” and social insurance (PAYE and SI) contributions by eight weeks from the due date. Any additional extensions will be expected to be considered by the government in consultation with businesses.

Measures for the hospitality, leisure, distributive and catering sectors

For businesses in the four sectors of hospitality, leisure, distributive, and catering that have been affected by restrictions imposed by the Gibraltar government in response to the coronavirus, the following measures will be introduced.

  • Commercial rents
    • When the government is the direct landlord, it will waive all commercial rents for the second quarter of 2020.
    • The government is also seeking to encourage commercial landlords to provide flexibility over the second quarter of 2020 to affected businesses in the hospitality, leisure, distributive, and catering sectors by proposing that if the landlord does not waive at least 50% of the rent due in the second quarter of 2020, legislation would be introduced so that the gross rent due for this period (without deductions) would be taxed at 50% and the tenants who are required to pay this rent would be allowed a deduction against their tax liability of three times the amount of rent paid. However, these provisions would not apply when the landlord agrees to defer the rent due for the second quarter of 2020 by waiving this and extending the lease by a further three months.
  • Business rates
    • The government will waive all business rates (fees charged by the government) for affected businesses in the hospitality, leisure, distributive, and catering sectors for the second quarter of 2020.
  • Utilities and telecommunications
    • The government will defer the business water and electricity charges for affected businesses in the hospitality, leisure, distributive, and catering sectors for the month of April 2020 and allow this to be paid evenly over the following 12-month period without applying any penalty.
    • The government is requesting that telecommunications providers consider a similar package of measures in respect of their affected customers in these four sectors for this period.
  • Salaries
    • The payment of salaries to employees by affected businesses in the hospitality, leisure, distributive, and catering sectors will not be subject to PAYE or employee or employer social insurance contributions for the month of April 2020.
  • Perishable stock purchase scheme
    • A stock purchase scheme would be introduced whereby catering establishments could sell to the government such perishable stock as they may hold and that might spoil and which the government can use in its own catering facilities.

Import duties

Import customs duties are waived until midnight on 30 April 2020 in respect of all classes of goods (except for the tobacco, fuel, and alcohol). This waiver will be reviewed by the government with business representative organisations before the end of April 2020. 

Financial sector relief

To assist entities licensed by the Financial Services Commission with cash flow, fees payable in April 2020 for the entire year in advance will not be payable as a lump sum but instead the fees will be payable quarterly in advance.

Other

In order to allow companies in the e-gaming and financial services sectors to relocate staff from overseas to cover any shortage of staff in Gibraltar, the government will introduce an online streamlined work permit and ETB process. ETB fees for all applications to register employees in all sectors will be removed for the second quarter of 2020.


For more information, contact a KPMG tax professional in Gibraltar:

Darren Anton | +350 200 48600 | darrenanton@kpmg.gi

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