New anti-avoidance tax rules have come into force in Gibraltar.
The Income Tax (Amendment) Act, 2025, gazetted on July 11, 2025, substitutes section 40 of the Income Tax Act, 2010 with new anti-avoidance tax rules.
Tax avoidance arrangement has been defined under the Act to mean an arrangement that directly or indirectly shows that the primary purpose or one of the main purposes of the arrangement is to obtain a tax advantage, and the arrangement results in a tax advantage inconsistent with the legislative intent of the relevant tax provisions.
Further, tax avoidance is defined to include an action which alters the incidence of any taxation; relieves a person from tax liability; or avoids, postpones, or reduces tax liability.
Arrangement has been defined to include a structure, agreement, contract, plan, or understanding, whether enforceable or unenforceable, including all steps and transactions by which it is carried into effect.
The amended section states that a tax avoidance arrangement is null and void against the Commissioner for the purposes of the Act. The Commissioner may counteract or disregard any tax advantage that a person has obtained from or under a tax avoidance arrangement.