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Gibraltar issues new rules and guidance on tax rulings

HM Government of Gibraltar has published new rules (the Rules) that apply to applications for tax rulings from the Commissioner of Income Tax and the processing of such tax rulings. The Rules are contained in the Income Tax (Tax Rulings) Rules 2018, which is effective as of 25 October 2018. Guidance has also been published.

The Rules state that the purpose of providing rulings is limited to the interpretation and application of the law in specific circumstances. The Commissioner is neither required nor permitted to derogate or deviate from the provisions of any legislation. This effectively reiterates the Commissioner’s stated position prior to the publication of the Rules.

An applicant for a ruling must provide specified detailed information. This includes:

  • A comprehensive description of the relevant facts and circumstances
  • Information sufficient to demonstrate the applicant’s interest in obtaining the ruling
  • A description of the underlying business activities, including the nature and place of the activities, place of effective management of the business, the human and technical means used in pursuing the business activities and the classes of customer at which the business activities are targeted
  • Evidence to support any assertion, including benchmarks or thresholds applied for determining arms-length equivalence or other matters
  • Sufficient explanation of the operation to satisfy the Commissioner of the commercial plausibility of the operation

A standard form is provided to be used to request a ruling.

In determining whether sufficient evidence has been provided, the Commissioner must take into account any relevant OECD1 or other international benchmarks or standards.

A tax ruling will specify a period, not exceeding three years, during which it may be relied upon. There is no specific provision in the Rules that automatically invalidates a ruling if the underlying tax law changes to the extent that it would no longer support such a ruling. However, it seems likely that the wording of any ruling issued would make it conditional upon there being no relevant changes in underlying legislation, as was previously the practice.

The Commissioner has several grounds on which he may refuse to give a ruling.

The Rules provide for the possibility of fees being charged by the Gibraltar Income Tax Office for making an application for a ruling. However, we understand that fees are not currently being charged and we are not aware of any specific plans to do so.

The Rules set out a time limit of 21 days from date of receipt of the application by which the Commissioner should respond; either with a decision, or a request for further information. There is no stated time limit by which the ruling would be issued should the decision be positive, although in such cases it is expected that in most circumstances the intention would be to issue the ruling within the 21 days.


1. Organisation for Economic Co-operation and Development.

EYG no. 011679-18Gbl

Download this Tax Alert as a PDF file.

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