Gibraltar Budget 2026 Explained

The main measures include:

• Transaction Tax replaced the former Import Duty system for most goods from 15 July 2026.
• The standard Transaction Tax rate is 15% for the first year and 16% for the second year. From year three, the rate is determined by the Treaty formula and is expected to be 17% while that remains the lowest standard VAT rate in the EU.
• Some goods are subject to reduced, zero or exempt treatment.
• Transaction Tax applies to goods. It is not a general tax on ordinary services.
• A new Transaction Tax deduction is now in force for qualifying retail and wholesale businesses.
• The first relief period runs from 15 July to 12 October 2026.
• Government is also preparing a separate Business Modernisation scheme.
• A business cannot receive both the Transaction Tax deduction and Business Modernisation support.
• Further business support announced includes rates relief, restrictions on certain commercial rent increases and a waiver of vacancy-registration fees for qualifying businesses.
• The statutory minimum wage is now £10 per hour.
• Old Age Pensions and Survivors' Benefits increased by 2.5% from 1 August 2026.
• Disability Benefit also increased by 2.5%.
• The Gibraltar state-pension age for qualifying men reduced to 60 from 1 July 2026, bringing it into line with women.
• Workplace-pension requirements now apply to employers with 15 to 50 employees.
• The standard corporation-tax rate remains 15%.
• Gibraltar's Global Minimum Tax applies separately to qualifying multinational groups.
• A multi-year public-sector pay settlement began in 2026/27.
• Government's 2026/27 Estimates project £854.1 million in revenue, £843.1 million in expenditure and an £11 million recurrent surplus.

What changed for businesses?

The largest structural change is the replacement of the former Import Duty system with Transaction Tax for goods.

Businesses that import, wholesale, retail or produce goods may need to review:

• product classification;
• customs values and landed costs;
• pricing;
• stock records;
• accounting systems;
• customs records; and
• cashflow.

For the full explanation of rates, taxable value, records and relief, see Gibraltar Transaction Tax 2026.

For the wider movement of goods, customs procedures, NIF/EORI and Treaty arrangements, see the Gibraltar–EU Treaty Trade & Customs Guide.

Businesses needing help with tax treatment should contact a Tax Consultant in Gibraltar or Accountant in Gibraltar.

Transaction Tax business relief — now in force

When the Budget was announced, the Transaction Tax support measure was still being developed.

That position has now changed.

The Transaction Tax (Deductions) Rules 2026 were published on 23 September 2026.

The Rules provide a deduction against assessable profits for qualifying retail and wholesale businesses where Transaction Tax paid during the qualifying period is higher than the Import Duty that would previously have been payable on the same goods.

The first qualifying period runs from:

15 July to 12 October 2026.

The deduction is based on the difference between:

• Transaction Tax actually paid; and
• the Import Duty that would previously have applied.

The deduction cannot exceed 50% of the tax paid by the business in its previous accounting period or year of assessment.

Qualifying businesses must also meet the other requirements in the Rules, including:

• obtaining the required Office of Fair Trading certification;
• providing proof of Transaction Tax paid;
• meeting the relevant tax, PAYE and Social Insurance conditions; and
• complying with the applicable State Aid limits.

Businesses principally selling food, beverages and household groceries, tobacco, wine or spirits, fuel or vehicles are excluded from this particular deduction.

For the complete rules and practical guidance, see Gibraltar Transaction Tax 2026.

Business Modernisation scheme — full details still awaited

The Budget also announced a second, alternative support measure aimed at helping businesses modernise and adapt.

Government has said that the scheme will cover areas such as:

• business premises;
• business processes;
• IT and digital systems; and
• staff training.

Earlier Budget announcements also referred to areas such as process improvement, consultancy and innovation.

However, the final scheme has not yet been published.

This means that the final:

• eligibility rules;
• amount of support;
• qualifying costs;
• application dates;
• claim process; and
• payment arrangements

are not yet confirmed.

What has been confirmed is that businesses can only benefit from one of the two main support measures.

A business that receives the Transaction Tax deduction will not also qualify for the Business Modernisation scheme.

Businesses that have not yet decided which scheme to use should still meet the known Transaction Tax requirements and retain all relevant records. This keeps the Transaction Tax option open while they wait for the full Modernisation scheme.

See Gibraltar Business Support 2026 for the latest position.

Other business-support measures

The wider support package also includes measures relating to business rates, commercial rents and recruitment costs.

Business-rates relief

Government announced additional rates relief for qualifying retail and wholesale businesses affected by the Treaty transition.

The additional relief was announced as a 25% reduction on top of the existing 50% reduction available for payment on time for the relevant period.

The Minister for Business also announced in her 2026 Budget address that the rates-relief measure would be extended to the restaurant sector in the same way as to retail businesses.

Where rates for the relevant period have already been paid, the announced arrangements provide for the relief to be dealt with through a credit against future rates or, where applicable, a refund.

Businesses should check the final rules applying to their individual rates account before relying on a particular credit or refund.

Commercial rent increases

Government also announced a 24-month moratorium on rent increases for premises used principally as:

• retail shops; or
• stores for the wholesale of goods.

The measure is intended to prevent qualifying rents from being increased above the amount payable immediately before the moratorium began.

Commercial leases can vary considerably. Businesses or landlords unsure whether a lease is covered should contact a Law Firm in Gibraltar before acting.

Vacancy-registration fees

Government announced a 36-month waiver of vacancy-registration fees for businesses operating in qualifying retail and wholesale sectors.

This waiver relates to the fee for registering a vacancy.

It does not remove the normal requirement to register vacancies or comply with employment, PAYE, Social Insurance, wage and pension rules.

For the full package, see Gibraltar Business Support 2026.

What changed for workers and employers?

Minimum wage

The statutory minimum wage increased from £9.50 to £10 per hour from 1 August 2026.

For a standard 39-hour week, this is £390 per week before deductions.

Employers should make sure that payroll systems, hourly rates and salaries close to the minimum are correctly calculated.

See Gibraltar Minimum Wage 2026 for the detailed employment guide.

Businesses needing help with payroll or wage calculations should contact an Accountant in Gibraltar or an appropriate payroll adviser.

Workplace pensions

The next stage of Gibraltar's workplace-pension rules also took effect on 1 July 2026.

Employers with 15 to 50 employees must now provide access to a qualifying pension scheme for eligible employees.

These employers must register with the Pensions Commissioner by 30 September 2026, or notify the Commissioner where all eligible employees have formally opted out.

Employers with 14 or fewer employees are due to come within the rules from 1 July 2027.

Eligible employees are generally those who:

• are over 15;
• have worked for the employer for at least one year; and
• earn at least £10,000 a year from that employment.

The statutory minimum contribution is generally 2% from the employer and 2% from the employee, although an employer may choose to pay the employee's contribution as well.

Employers needing help setting up or reviewing a scheme should contact a Pension Consultant in Gibraltar.

What changed for pensioners and benefit recipients?

The Budget included several important pension and benefit changes.

State-pension age

From 1 July 2026, the pensionable age for qualifying men reduced from 65 to 60.

The pensionable age for women remains 60.

Contribution requirements still apply, so reaching age 60 does not by itself guarantee a full pension.

Following the change, Government also equalised the contribution requirements for men and women.

For a full Old Age Pension, men now require 2,000 paid or credited contributions, rather than the previous 2,250.

The minimum number needed for a reduced pension also fell from 585 to 520 contributions.

Old Age Pension and Survivors' Benefits

Old Age Pensions and Survivors' Benefits increased by 2.5% from 1 August 2026.

The Budget stated that the maximum Old Age Pension for a single person would rise to £603 per month, with a maximum of £904.75 for couples, subject to individual entitlement.

Disability Benefit

Disability Benefit also increased by 2.5%, with the maximum upper limit rising to £512.65.

The Budget also confirmed that the pension increase would be disregarded when assessing eligibility for the Minimum Income Guarantee, so the uplift itself should not reduce that supplementary support.

See Gibraltar Pensions and Benefits 2026 for the detailed guide.

What changed for personal tax?

The Budget announced increases to Government benefits other than unemployment benefit in line with inflation.

Tax allowances should always be checked against the operative 2026/27 tax tables, particularly where an individual's circumstances, allowances or tax system affect the final calculation.

For current Gibraltar tax information, see Gibraltar Tax Facts.

Individuals needing a personal calculation should contact a Tax Consultant in Gibraltar.

What does the Budget mean for companies?

The standard Gibraltar corporation-tax rate remains 15%.

The Budget did not announce a general increase in corporation tax.

Utility companies and certain companies with a dominant market position remain subject to separate higher-rate rules.

Gibraltar also operates the OECD Global Minimum Tax framework for qualifying multinational groups.

This is a specialist regime aimed at large multinational groups and should not be confused with the ordinary 15% corporation-tax rate applying to most Gibraltar companies.

Government estimated at least £25 million of Global Minimum Tax revenue in 2026/27.

For the wider company position, see Gibraltar Budget 2026 for Companies and Gibraltar Tax Facts.

Did the Budget change Category 2 or HEPSS?

No direct Budget-specific change to either regime was announced as part of the July Budget.

However, Category 2 had already been subject to separate changes announced in June 2026, including changes aimed at new applicants. It should therefore be checked separately rather than relying on the Budget position alone.

HEPSS also remains a specialist tax and residence regime with its own conditions.

See the dedicated Category 2 Status and HEPSS Status guides for the current rules.

Public-sector pay

The 2026 Budget introduced a multi-year public-sector pay settlement.

The settlement is designed to recover the 12.6% loss of purchasing power identified for the period from August 2019 to 2025.

For most public servants within the main salary threshold, the recovery is to be delivered through a 2.5% annual recovery increase over five years, beginning in 2026/27.

Government also announced inflation-linked increases during the recovery period, with rules allowing increases above 2.5% inflation to be deferred where necessary and recovered later.

Different treatment applies to higher salaries.

The Budget also raised the minimum entry salary across the Public Service to £24,413 per year.

What does the Budget say about Gibraltar's public finances?

For the 2026/27 financial year, Government estimates:

• Revenue: £854.1 million
• Expenditure: approximately £843.1 million
• Projected recurrent surplus: £11 million

These figures relate to the Consolidated Fund and do not include all capital spending.

The Budget also estimates more than £55 million of expenditure through the Improvement and Development Fund for capital projects.

Transaction Tax is now a new source of Government revenue following the move away from Import Duty.

The Budget estimated £80 million in Transaction Tax revenue for the remaining part of the financial year following implementation in July.

For the wider position on debt, spending and Government finances, see Gibraltar Budget 2026: Public Finances.

Frequently Asked Questions

What is the biggest business change in the Gibraltar Budget 2026?

For many businesses, the biggest change is the replacement of Import Duty by Transaction Tax on goods from 15 July 2026.

Businesses importing or selling goods may need to review customs values, product classifications, prices, stock systems and accounting records.

What is the standard Transaction Tax rate?

The standard rate is 15% for the first year and 16% for the second year.

From year three, the rate is set using the Treaty formula. It is expected to be 17% while 17% remains the lowest standard VAT rate in the EU.

Does Transaction Tax apply to services?

It is primarily a tax on goods.

It should not be treated as a general VAT-style tax on ordinary services.

Is the Transaction Tax business support now confirmed?

Yes.

The Transaction Tax (Deductions) Rules 2026 were published on 23 September 2026.

The first qualifying period runs from 15 July to 12 October 2026.

How does the Transaction Tax deduction work?

It compares the Transaction Tax paid by a qualifying business with the Import Duty that would previously have been payable on the same goods.

Where Transaction Tax is higher, the difference may qualify for a deduction, subject to the Rules and the 50% tax-paid limit.

Can a business claim both the Transaction Tax deduction and the Business Modernisation scheme?

No.

A business receiving the Transaction Tax deduction cannot also receive support under the Business Modernisation scheme.

Has the Business Modernisation scheme opened?

Not yet.

Government has confirmed its broad purpose, but the final eligibility rules, funding amounts and application process have not yet been published.

What should a business do while waiting for the Modernisation scheme?

A business that may qualify for the Transaction Tax deduction should continue to meet the known Transaction Tax requirements and keep all relevant records.

This keeps the Transaction Tax option available while the business waits for the full Modernisation scheme.

What is the minimum wage in Gibraltar in 2026?

The statutory minimum wage is £10 per hour from 1 August 2026.

Which employers are now covered by workplace pensions?

Employers with 15 to 50 employees came within the workplace-pension requirements from 1 July 2026.

They must register with the Pensions Commissioner by 30 September 2026, unless all eligible employees have formally opted out and the required notification is made.

Employers with 14 or fewer employees are due to follow from 1 July 2027.

What changed for state pensions?

The pensionable age for qualifying men reduced to 60 from 1 July 2026, bringing it into line with women.

Old Age Pensions and Survivors' Benefits increased by 2.5% from 1 August 2026.

Did corporation tax increase in the 2026 Budget?

No.

The standard rate remains 15% for most companies.

What is the Global Minimum Tax?

It is a separate international tax regime for qualifying multinational groups.

It is not a general additional tax on ordinary Gibraltar companies.

What does the Budget project for Government finances?

Government projects revenue of £854.1 million, expenditure of about £843.1 million and an £11 million recurrent surplus for 2026/27.

Professional guidance

This page provides general information only.

Tax, pension, employment, business-support and financial rules can apply differently depending on individual or business circumstances.

Where advice is needed, contact an appropriate professional, including an Accountant in Gibraltar, Tax Consultant in Gibraltar, Pension Consultant in Gibraltar, Law Firm in Gibraltar or other suitable Business Service provider.

Related Gibraltar.com guides

• Gibraltar–EU Treaty 2026 Explained
• Gibraltar Transaction Tax 2026
• Gibraltar Business Support 2026
• Gibraltar Minimum Wage 2026
• Gibraltar Pensions and Benefits 2026
• Gibraltar Budget 2026 for Companies
• Gibraltar Tax Facts
• Gibraltar Budget 2026: Public Finances