Gibraltar's long standing corporate tax rate of 10% is set to rise to 12.5%. The change applies to any company commencing a financial period after 20 July 2021.

The rise follows Gibraltar's agreement to the Organisation for Economic Co-operation and Development's (OCED's) Global Minimum Tax Rate Pillar Two proposal and moves Gibraltar closer to the anticipated global mandated minimum rate of 15%.

Other key highlights from the Gibraltar Government budget announced yesterday include:

  • Changes to High Executive Possessing Specialist Skills (HEPSS) as from 1 August 2021 - HEPSS qualifying amount raised to £160,000 (up from £120,000) - grandfathering provisions apply;
  • Changes to Qualifying CAT 2 Status for individuals as from 1 August 2021 - minimum tax raised to £32,000 per annum (grandfathering provisions apply); and
  • Capital allowances on plant and machinery and IT equipment increased from £30,000 and £50,000 to £60,000 and £100,000 respectively.