Gibraltar announces interest income of insurers and Distributed Ledger Technology firms must be treated as taxable income

The Government of Gibraltar has announced that interest income of insurers and Distributed Ledger Technology (DLT) firms is to be treated as taxable income, effect as of 1 February.

Currently, a company is only taxable on interest income in Gibraltar either:

• If the company is a bank or similar entity
• If inter-company interest income (i.e., income from another company or total income from connected companies) exceeds 100,000 Gibraltar pounds (£100,000) per annum

However, Gibraltar's Income Tax Act 2010 is being amended such that interest income of insurers and DLT firms is to be treated as trading income and therefore subject to taxation in Gibraltar.

The announcement was made in a Ministerial Statement (pdf) to Parliament by The Hon. Nigel Feetham on 24 January 2024.

The Minister also informed Parliament that both general and specific anti-avoidance provisions are to be introduced in relation to such interest income "ensuring that arrangements and transactions entered into by in-scope taxpayers are not constituted in a manner that seek to circumvent tax on the resulting interest by reference to both the main purpose of the arrangement or transaction or the disposal of any interest-bearing asset to connected persons."

The legislation for these changes has yet to be published.

Contact Information

For additional information concerning this Alert, please contact:

EY Limited Gibraltar

• Neil Rumford
• Stephen Carreras

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.