Gibraltar legislation concerning tax exempt companies has changed; please read important information on the changes in Gibraltar exempt company registration procedures. The purpose of this chapter is to provide you historical information on the Gibraltar exempt companies and their benefits.
Exempt company is the original company form in
Gibraltar: the concept was introduced in 1967 in the Companies
(Taxation and Concessions) Ordinance. Later on it was taken by
other jurisdictions. Its significant characteristic is low set
up cost, which makes it the most suitable form for property and
investment holding, international trading and sales agencies,
especially for trading between two high tax jurisdictions.
The Gibraltar tax exempt company is a limited company, which has
obtained a certificate of tax exemption from the Gibraltar Financial
and Development Secretary.
Only companies having a share capital can be exempt. The company
is qualified as tax exempt if it does not carry business in Gibraltar
and if its beneficial owner does not reside in Gibraltar. Still,
the company can be managed and controlled from Gibraltar; it is
possible to have board of directors resident in Gibraltar. This
does not effect company’s tax-exempt status.
For tax exempt companies there is fixed amount of year payment,
with a 100% penalty for late payment. Fee should be paid on 1 April
of each year.
· £225 if the company
is ordinarily resident.
· £200 if the company is not ordinarily
· £300 in the case of a registered
branch of an overseas company.
Advantages of Gibraltar Exempt
The benefits deriving from having tax exempt status are that the
company or branch will be exempt from the following:
· Corporate taxation on profits.
· Withholding taxes on interest, fees
and other payments to non resident directors or to other persons,
and dividends paid to its shareholders.
· Estate duty as it has been abolished
· Stamp duty on the transfer of shares.
for tax exempt company
The tax offshore exempt company, due to its low
administrative and set up costs, can be used for a wide range
of trading activities or investment holding purposes. These are
some of the possible applications:
Usually is for the purpose of owning commercial
or residential property for which income is to be derived by way
of rent. The individual's asset then becomes the shares in the
company situated in Gibraltar and not the property situated in
another country. The ownership of the property in the country
the property is situated is still the same company, and therefore
normally no taxable event occurs here either.
Used for confidential investments in the shares
of a company or in the Stock Market generally.
Exempt companies in Gibraltar are not subject to either capital
gains or income tax. Investment holding companies can therefore
accumulate income and capital gains without any erosion due to
Exempt companies may be used to carry out international
trading between third parties in different countries (usually
from high-tax territories). They then receive commissions, or
alternatively re-invoice for goods or services. Profits earned
by the company in such a way will not be subject to any taxation
Opening a confidential bank account also is included
in our services. Bank accounts can be used for the
purpose of everyday use or investment. Such accounts remain totally
confidential and all interest earned is totally tax free, subject
only to exchange control regulations there may be in the country
in which it is intended to open the bank account.
Tax Exemption Certificate is issued for a period
of 25 years. A company incorporated in Gibraltar, as well as registered
branch of an overseas company, may apply for a Tax Exemption Certificate
subject to the conditions set out below. Possession of such certificate
will, in return for the payment of a fixed annual tax, exempt
the company or branch from further taxation in Gibraltar.
Gibraltar licensed insurance companies are able
to take advantage of the single European Insurance Market by either:
· Establishing a branch operation in any
EEA member state without having to be licensed there, or
· Insuring risks directly in any EEA member
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