New transaction tax relief for Gibraltar businesses.

On 23 September 2026, HM Government of Gibraltar introduced a new tax relief, The Transaction Tax (Deductions) Rules 2026, aimed at supporting eligible retail and wholesale businesses on the additional costs arising from the introduction of transaction tax. 

Who is eligible?

The relief is available to companies, partnerships, sole traders and other persons carrying on a trade in the retail or wholesale sectors, provided they are certified as such by the Office of Fair Trading.

Certain businesses are specifically excluded, including those whose trade principally includes the sale of food, beverages and groceries, tobacco, wine and spirits, fuel, or vehicles.

How does the relief work?

Eligible businesses may claim a deduction against their assessable profits equal to the difference between the transaction tax paid during the relevant 90-day period and the import duty that would previously have been payable over the same period, where the transaction tax paid is higher.

The deduction applies to transaction tax incurred during the 90-day period beginning on the Treaty implementation date of 15 July 2026 and ends on 12 October 2026.  

Where goods would previously have been subject to different rates of import duty, businesses may need to calculate a weighted average based on their mix of imports. Appropriate records and supporting calculations will therefore be important when making a claim.

The amount of the deduction is capped at 50% of the tax paid by the business in the immediately preceding accounting period or year of assessment. The deduction is taken into account when calculating assessable profits and applies to the first accounting period or year of assessment beginning on or after 15 July 2026. 

Compliance requirements

As a general rule, businesses must have been up to date with their filing and payment obligations in respect of corporation tax or income tax, PAYE and social insurance contributions as at 15 July 2026.

The Rules provide some discretion for businesses that were not compliant at that date but subsequently regularise their position within 30 days of the rules coming into force. This requires a written application, supporting evidence and written approval from the Commissioner.

Claims must also be appropriately supported, including by Office of Fair Trading certification and evidence of transaction tax paid.

Interaction with other Government support

Businesses considering a claim should also review any other Government assistance they have received. A deduction under this rule is not available where the business has received assistance under other schemes aimed at financially supporting the modernisation of premises, processes and procedures, IT or staff training.

De minimis aid

All deductions must also comply with the de minimis state aid rules under the Treaty on Gibraltar and the European Union Act 2026 and any legislation  made under that Act. 

For more information or for any query relating to your business operations, please feel free to contact me. 

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