In the absence of double taxation agreements, foreign companies or citizens who pay taxes in Gibraltar can benefit from tax relief in their home country as soon as they have provided evidence to the Gibraltar tax authorities. If a deduction is granted to a foreign company under a double taxation agreement, Gibraltar also grants the deduction. Section 22 provides for the elimination of double taxation through a tax credit. An application for double taxation must be filed within six years from the end of the tax year to which it relates. The period is extended if any adaptation or evaluation carried out in Gibraltar or abroad allows for excessive or insufficient relief beforehand. Under these conditions, a right may be invoked within six years of rectification or assessment. This is the first double taxation agreement signed by Gibraltar. For more details on the agreement, click here. The main effect of the treaty is to eliminate double taxation between residents of Gibraltar and/or the United Kingdom on income and profit taxation.
The treaty further strengthens economic relations between the two regions before Brexit and, although it is based on the organisation for economic co-operation and development (OECD) model, some major differences appear, which are highlighted in this article. (c) if he has a habitual residence in either or any of the two zones, the competent authorities of the territories resolve the matter by mutual agreement. The Double Taxation Agreement between Gibraltar and Great Britain came into force on 24 March 2020. When a person other than a person is established in both territories, the competent authorities of the territories endeavour to determine by mutual agreement the territory whose territory is considered to be resident for the purposes of the treaty, taking into account its actual place of management, the place of registration or other reasons, and other relevant factors. The aim of the agreement is to eliminate double taxation on income and capital and to prevent tax evasion and evasion. Anyone usually residing in Gibraltar, who is taxable in Gibraltar, can apply for double taxation assistance for tax paid abroad.