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Gibraltar tax Corporate tax return and dividend return filing requirements

06 July 2016

What’s changed? Deadlines Requirement to file accounts with a tax Until recently, Gibraltar’s Income The deadline for filing tax Tax Act 2010 only required a returns and returns of dividends return company to file a tax return if it is nine months after the end of had income assessable to tax in the month in which the The Income Tax Act 2010 Gibraltar. The filing requirement accounting period ends. provides that: has now been extended to • A company with assessable include all companies registered The Income Tax Office in (gross) income of in Gibraltar, regardless of Gibraltar has stated that for £1,250,000 or more per whether they have income companies with no assessable annum is required to file assessable to tax. income, no late filing penalties will be levied in respect of tax audited accounts with its tax In addition, the requirement to returns until 1 January 2017. return file a return of dividends has Note that this does not apply to • In the case of a company been extended to all companies companies with assessable with assessable income of incorporated in Gibraltar that income. less than £1,250,000 per declare a dividend, with an annum, the return must be exception for companies whose accompanied by accounts shares are listed on a recognized together with an stock exchange. Previously, the independent accountant's requirement to file a dividend report return only applied if any of the

recipients of a divided was an ordinarily resident person, or another company incorporated in Gibraltar.

These changes apply to accounting periods ending on or after 1 January 2016.

Guidance has been issued by the Income Tax A company must fall within two of the three Office setting out the type of accounts that in its parameters in the financial year in question and view are required to be filed by companies that the preceding year in order to be classified as have no income assessable to tax in Gibraltar. small or medium sized. If a company exceeds or These are as follows: ceases to exceed the limits of more than one of the parameters, it will continue to qualify for the Large companies are required to file full relevant year unless that continues to be the accounts, including an auditor’s report. case in two consecutive years. For a newly Medium companies are required to file the same, incorporated company, the conditions need only except that the profit and loss account may be in be met in its first financial year. “abridged form.” Although not stated, it seems likely that the abridged form refers to the Contacts modified format in Schedule 14 of the Companies Act 2014. This allows turnover, cost Neil Rumford of sales and other operating income to be Partner — Tax, EY Limited combined under a single net figure headed + 350 200 13 204 “gross profit or loss.” Medium companies should [email protected] consider the impact of such an “abridged form” on the auditor’s report before preparing JJ Pisharello accounts on this basis. Managing Partner, EY Limited + 350 200 13 202 Small companies are only required to file an [email protected] abridged balance sheet. The guidance does not include a requirement for an independent Ian Ramognin accountant’s report or auditor’s report to be filed Manager — Tax, EY Limited with such accounts. + 350 200 13 230 [email protected] The parameters for classifying companies as small, medium or large are those set out in Gibraltar’s Companies Act 2014. This approach limits the additional burden on EY | Assurance | Tax | Transactions | Advisory companies with no assessable income, as the accounts to be filed with a return as stated About EY above are in line with those already required by EY is a global leader in assurance, tax, transaction and Companies House, where the company files its advisory services. The insights and quality services we own accounts. There will be an additional burden deliver help build trust and confidence in the capital markets when companies do not file their accounts at and in economies over the world. We develop outstanding Companies House, but instead file group leaders who team to deliver on our promises to all of our accounts of a parent entity. stakeholders. In so doing, we play a critical role in building a better working world for people, for our clients and for our communities. EY refers to the global organization, and may refer to one or Small Medium Large more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Net turnover Up to Up to Over Limited, a UK company limited by guarantee, does not (prorated if more £10.2m £36m £36m provide services to clients. For more information about our than or less than organization, please visit ey.com. one year)

Balance sheet Up to Up to Over ©2016 EYGM Limited total £5.1m £18m £18m All Rights Reserved. (total assets) EYG No: Average number Up to 50 Up to Over of persons 250 250 ED None employed This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com/gi