As you may be aware, the tax system of Gibraltar has been undergoing a change. However, we are pleased to say that various changes have been made which maintain the attractiveness of Gibraltar as a Finance Centre.

The Commissioner of Income Tax has accepted that he is bound by judicial precedent which says that, as long as income is not accrued or derived in Gibraltar, no corporation tax on profits is payable, even if the profits are remitted to Gibraltar (ie Gibraltar bank account). Legislation has also been introduced which exempts from tax, all savings income, ie interest from recognised banks and dividends or income from financial instruments of quoted companies.

Stamp Duty has also been eliminated on all transactions, bar a nominal duty of £10 on capital creation or increase and a duty on Gibraltar situated real property. This means that an ordinary resident company which has its profit-making activities outside Gibraltar can be a very tax efficient vehicle. There are no plans to introduce taxes on wealth or capital gains.

However, as will have been seen from many announcements from the Governments of countries such as the US, the UK, Germany and France (to name but a few) the "zero tax offshore financial centre" is coming under a lot of international pressure. Gibraltar has therefore announced that as from 2010, it will introduce a tax rate on profits of 10% for all companies (although final details have yet to be released) making it an attractive "low tax" jurisdiction. Gibraltar has also signed Tax Information Exchange Agreements with the USA, the Republic of Ireland, New Zealand, Germany, France, Australia, UK, Austria and Portugal and announced that it will sign another 4 with other countries before November 2009 to ensure we are on the OECD "white list".