Gibraltar: Tax developments in response to COVID-19

This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).

The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.

The Chief Minister of Gibraltar announced a series of measures to help businesses in Gibraltar that have been affected by the coronavirus (COVID-19) crisis. The government will publish a series of guidelines and guidance notes to make it easier to understand these extra measures that have been announced. The measures include:

Customs/Import and Other Miscellaneous Taxes

• Import customs duties are waived until midnight on April 30, 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 organizations before the end of April 2020.

Filing/Payment Deadline Extension

• 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 is expected to be considered by the government in consultation with businesses.

Payroll Tax 

• 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.

Additional Information

Business Income Tax

• All businesses will now benefit from business rates waiver for the second quarter of 2020 and a one-off capital allowance of £50,000 for the current financial year, given that expenditures will have been incurred in adapting operations to the challenges of this pandemic.

Tax repayments and penalties for late filing

• The ITO will be expediting refunds due to both individual (personal) and corporate taxpayers.
• The Commissioner of Income Tax confirmed that the waiver of penalties in relation to the late filing of corporate tax returns is expected to continue until 31 August 2020. The waiver applies to filing deadlines arising on or after 15 March 2020. This is expected to be confirmed in due course, with notice to be provided by the ITO if the waiver is extended. This waiver does not apply to the surcharge regime for late payments; thus, tax payments must be made in accordance with the existing due dates to avoid any surcharges.

Additional information regarding employment-related measures, economic stimulus measures and other measures.