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Gibraltar Budget Summary - July 2018

Gibraltar Budget Summary - July 2018 Image

Introduction

At the Parliamentary session of 2nd July 2018, the Chief Minister delivered his “Brexit” Budget Speech described as a 4-way balance between caution & optimism, prudence & investment. A focus on investment to drive economic growth and personal responsibility to pay increased social contributions. 

Economic Highlights 

  • Average inflation 2.6%
  • Forecast GDP £2.18bn for 2017/18 (+8.6%)
  • GDP per capita ($111K) would be ranked 3rd in world per IMF measures
  • Net Public Debt to GDP 14.86% in 2017/18
  • Budget surplus 2017/18 at £36.1M
  • Record employment at 28,029 jobs (+3.5%)
  • 35 new Distributed Ledger Technology businesses coming to Gibraltar since pioneering regulations introduced on 1 January 2018

Taxation Highlights

 Business 

  • 10% company tax rate unchanged
  • Loss relief introduced for group structures
  • Minimum wage up £6.75 p/h (£6.45) from 1 August 2018
  • No increase in business rates, water & electricity

 Social insurance 

  • Increase by 10%

Individuals 

  • Persons with assessable income of up to £11,200 (£11,150) will pay no income tax

Allowances Based System (ABS)

  • Allowances increased by at least inflation across a wide range of categories

Gross Income Based System (GIB)

  • No changes

Trusts & Pensions 

  • No changes or mention of private sector pension implementation plans

Category 2 / HEPSS  

  • No Changes

Stamp Duty

  • New 7.5% special stamp duty to original purchasers of certain government affordable properties applying on resale within first 10 years.

Import Duty 

  • Licence fees for tobacco wholesalers & retailers increased substantially
  • Duty on tobacco sales increased

Environmental Measures

  • Increase on fuels with greater increases for those that pollute the most
  • Ban on registration of private vehicles powered by internal combustion engines by 1 July 2030 and to be phased out by 2040
  • £2,000 tax deduction for cars installing electric and hybrid technology
  • 200% duty on single use plastics but duty on paper alternatives eliminated
  • Duty of educational electronic equipment eliminated

 

Information supplied by our associated company: Buckingham Corporate Services Limited, 30/1 Cornwall's Lane, Gibraltar, www.bcs.gi,  +350 200 62272

The full text of the Chief Minister's Gibraltar Budget Speech 2018 as a pdf is now available

Notice: This note provides general information on the Gibraltar tax system which may be of interest. It is not intended to be comprehensive and should not be construed as professional advice. Measure announced in the Budget Speech are subject to legislative approval. Unless otherwise stated the new tax measures will be deemed effective from 1 July 2018.

Contributed by Mike Nicholls