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Corporate

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Corporate

Q. What is the standard rate of Corporation Tax?
Q. When does a company need to register with the Income Tax Office?
Q. How does a company register with the Income Tax Office?
Q. When does a company have to submit a Tax Return?
Q. What is a Complete Tax Return?
Q. What happens if a company misses a filing date?
Q. Do company accounts have to be audited?
Q. What if the audited accounts differ from the draft or unaudited accounts already submitted?
Q. What are ‘Payments on Account’ and when should these be paid?
Q. I have made both Payments on Account, do I need to make any further payment?
Q. What if I do not pay the full amount due?
Q. Can my Payments on Account be reduced if my company’s current corporate tax liability is expected to be less than last year’s?
Q. I have paid the Payments on Account due but have still received a tax assessment resulting in a further liability – why is this?
Q. My company has ceased to trade – what are my obligations?

INCOME TAX ACT 2010 GUIDANCE NOTES

RETURNS FOR ACCOUNTING PERIODS ENDING ON OR AFTER 1ST JANUARY 2011

CORPORATE

QUESTIONS & ANSWERS

Q. What is the standard rate of Corporation Tax?

A. Most companies in Gibraltar are liable to Corporation Tax at a rate of 10%. Utility companies or companies enjoying a dominant market position are liable at a higher rate of 20%. Included in the latter are companies providing electricity, fuel, water and telephony services.  

Q. When does a company need to register with the Income Tax Office?

A. With effect from 1 January 2016, a company which is registered in Gibraltar under the Companies Act 2014, or has assessable income in Gibraltar under the Income Tax Act 2010, is required to register in Gibraltar for tax purposes.

Q. How does a company register with the Income Tax Office?

A.You will need to file a Company Registration Form (CT3) and enclose additional documentation as specified in this form.

Company Registration – Form CT3 Supplementary Sheets – Form CT3A

Q. When does a company have to submit a Tax Return?

A. A company should submit a Complete Tax Return within nine months after the end of their financial period.

Tax Return – Form CT1

Q. What is a Complete Tax Return?

A. This is made up of the following documents:

  1. A completed and signed CT1 form
  2. Company accounts
  3. Auditor’s or Independent Accountant’s Report
  4. Tax computations
  5. PAYE reconciliation (this would apply if company is not co-terminus with June)

Tax Return – Form CT1

Q. What happens if a company misses a filing date?

A. If a complete Tax Return is not submitted nine months after the end of the financial period, penalties will be imposed. Please refer to table below.

PENALTIES FOR LATE SUBMISSION OF TAX RETURN

Length of delay

Penalty

Failure to comply

£50

If failure to comply continues 3 months after 1st penalty

An additional £300

 You should note that legal action may be initiated at any point after initial default.

Q. Do company accounts have to be audited?

A. The minimum accounts filing requirements depend on two factors:  The type of registration under the Companies Act 2014; and whether the company has assessable income in Gibraltar in excess of £1.25m.  The minimum accounts filing requirements are set out in the table below:

 

 

 Q. What are ‘Payments on Account’ and when should these be paid?

A. These are advance payments of your company’s tax liability, based on its liability in the previous accounting period.  They are payable in two equal instalments by no later than the 28th February and 30th September of every calendar year.

 Q. I have made both Payments on Account, do I need to make any further payment?

A.  On submission of your Complete Tax Return, you may be liable for an additional tax payment if your profits for that year exceed those of the prior year (on which your Payments on Account were based). This additional liability will be payable not later than nine months after the company’s accounting period.

 Q. What if I do not pay the full amount due?

If payments are not received on time, surcharges will be imposed. Please refer to table below.

SURCHARGES FOR LATE PAYMENT

Length of delay

Surcharge

9 months after the company's financial period

10% of tax due.

90 days after the 10% surcharge

An additional 20% on the balance (ie tax plus surcharge) due.

 You should note that legal action may be initiated at any point after initial default.

Q. Can my Payments on Account be reduced if my company’s current corporate tax liability is expected to be less than last year’s?

A. If you are reasonably confident that your tax liability this year is going to be less than that of the previous year because your company has been less profitable this year, you are able to claim to reduce your Payments on Account.You must complete and submit a CT4 Application Form before the payment is due. Please note that surcharges will be incurred if, after having submitted such a claim, your accounts reflect that your actual tax liability exceeds the sum of the payments on account already made.

Claim to Reduce Payments on Account – Form CT4

Q. I have paid the Payments on Account due but have still received a tax assessment resulting in a further liability – why is this?

A. This would normally be due to the company’s tax computation having been adjusted by the Tax Office. A copy of the amended tax computation will have been sent to your accountant.

Q. My company has ceased to trade – what are my obligations?

A. The company should inform the Income Tax Office in writing that it has ceased to trade and submit any outstanding tax return and accounts to the date of cessation. The company should also ensure that any outstanding taxes are paid.

For any enquiries please contact us on Tel 200 74889 or email us at corporatetax@gibraltar.gov.gi