Gibraltar was one of the first British dependent territories, which developed tax-exempt corporate forms for offshore business. It has quite high internal tax rates, but for incoming investment it offers low tax regimes. It is probably the cheapest offshore jurisdiction in Europe.
Gibraltar is subject to much EU financial legislation and can apply Common European Passport regulations in the insurance, banking and fund management spheres. However, Gibraltar has not implemented the Common Agricultural Policy (CAP), indirect taxation (VAT) and Common external tariffs. There are no capital gains taxes, gift taxes nor wealth taxes in Gibraltar. The main tax for companies is income tax, as Gibraltar taxation system is similar to that of the United Kingdom and is administered under the Income Tax Ordinance. There are also property taxes and stamp duties on some transactions. Assessment and collection of tax is administered by the Commissioner of Income Tax; the tax year runs from 1 July to 30 June.

Companies take advantage of extremely favorable business environment, which includes a number of offshore regimes in order to reduce taxation. Gibraltar possesses and excellent offshore business infrastructure, consisting of numerous sectors – offshore banking, insurance, investment fund management, investment holding companies. There is a good range of professional services in Gibraltar, particularly for the banking, trust management and mutual fund sectors.