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Gibraltar prepares for 10% tax rate

12 June, 2009

The final stages of negotiation is underway by the government of Gibraltar in the implementation of a 10% standard corporate tax rate for both international and domestic businesses investments.

An official announcement is awaited and it is likely to put an end to the international tax exempt regime introduced in 1967 which meant that many international businesses represented in Gibraltar paid no corporate tax. When the budget announcement is made, the newly proposed rate will see all companies paying 10% with effect from July 2010.

The proposal is in the final stages of being drafted, and according to James Tipping, finance centre director for Gibraltar, the phasing out of the 0% regime for international businesses will institute a fairer corporate tax system. He also confirmed that no new investors are permitted to enter under the old regime.

Mr. Tipping felt there would not be an exodus of international financial service firms which currently account for 30% of Gibraltar’s GDP. He said that the government had been in close consultation and no businesses had intimated that they would leave.

“If people want to pay 0% tax, then they can go somewhere else. People need to realise they have to make a contribution” he said.

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