Detached Workers

Introduction to PAYE for employees working abroad

A ‘Detached Worker’ is an employee who is sent by their employer to carry out a specific task in another country on a temporary basis.

As a detached worker you would continue to pay your social insurance contributions in your country of origin (upon receipt of a complete A1 form).

Guidelines for contractors or subcontractors based outside Gibraltar

Any company intending to send ‘Detached Workers’ is required to register in Gibraltar for tax purposes. Primarily all companies will need to contact the Income Tax Corporate Section via telephone number +350 200 74889 or email address corporate.enquiries@gibraltar.gov.gi

The following documentation is required in order to register:-

1. A completed CT3 form (https://www.gibraltar.gov.gi/new/sites/default/files/HMGoG_Documents/CT3%20Company%20New%20Registration%20Form.xls)
2. Proof of incorporation in the country of origin
3. A copy of the contract with the local contractor must be supplied

Upon receipt of these documents, the company being subcontracted will be confirmed as registered with the Corporate & PAYE Sections. The employees will then be able to register and tax codes supplied to each.

At the end of the contract the company responsible for payroll will need to submit a P8 declaration form highlighting the income received from the work in Gibraltar and the tax deduction required.

Registering as a Detached Worker (employee)

Registrations cannot be completed until the company responsible for the payroll is fully registered for Tax purposes with the Corporate Section.

Once the company registration has been completed by the Corporate Section, the registration of employees will need to be completed via the PAYE Section, telephone number +350 200 74924 or email address paye.detachedworkers@gibraltar.gov.gi

In order to register as a Detached Worker the following documentation is required: -

1. Completed Notice of Temporary Engagement (Detached Worker) Form (https://www.gibraltar.gov.gi/uploads/documents/employment/Work%20Permits/3.%20Notification_of_Temporary_Employment_of_a_Detached_Worker_Form_2020.pdf )
2. Completed A1 Form (Obtained from country of origin)
3. Copy of Identity Card / Passport

Once Registered as a Detached Worker

You will be issued with a Gross Income Based Tax code. You will need to take your documents to the Ministry of Employment in order to complete the registration process in Gibraltar.

Your employer / payroll provider will need to deduct tax from any income earned during your period in Gibraltar. These must be paid by the 15^th of the following month. Any income earned during this period of time will also be declared on the annual P8 declaration form.

In Gibraltar for less than 30 days

If you will not be present in Gibraltar for more than thirty days in aggregate in a tax year you would need to state this in advance. If the application is accepted, employees would be exempted from Income Tax.

This would only apply when confirmation has been granted by this office. Your employer would still need to register with Corporate Section and declare any income earned in Gibraltar.

Section 19 Registration (Less than Thirty Days in Gibraltar)

The following documentation is required once the company has registered with the Corporate Section in order to register employees under Section 19:-

1. A completed CT3 form (https://www.gibraltar.gov.gi/new/sites/default/files/HMGoG_Documents/CT3%20Company%20New%20Registration%20Form.xls)
2. Proof of incorporation in the country of origin
3. A copy of the contract with the local contractor must be supplied
4. Written affidavit that the sub-contractor and employees will not be present in Gibraltar for more than 30 days in aggregate in the year of assessment. The company would also need to state that it would take full responsibility for any PAYE deductions should the 30 day limit be exceeded.
5. Completed Notice of Temporary Engagement (Detached Worker) Form (http://www.employment.gov.gi/uploads/forms/notification-of-temporary-employment-of-a-detached-worker-form.pdf)
6. Completed A1 Form (Obtained from country of origin)
7. Copy of Identity Card / Passport

If approved, the employees will then receive confirmation that they are exempt under Section 19 of the Income Tax Act 2010. Nevertheless, a P8 form (https://www.gibraltar.gov.gi/employers) will need to be completed at the end of the contract. Income for the period worked in Gibraltar will need to be declared.

Should any of the employees be present in Gibraltar for a period exceeding 30 days, all income would become subject to tax.

PAYROLL & PAYE Calculations

The contractor and sub-contractor will need to establish who will be responsible for the payroll and tax declarations for the employees. This will need to be stipulated when employees complete the PAYE registration documentation.

Please note that sub-contractors cannot operate within Gibraltar until the registration process has been completed. Any company in breach of this could be subject to penalties under the Employment Regulation (Offence) Act.