On 7 July 2026, Gibraltar's Chief Minister delivered his Budget Address for the year 2026/27. The Budget Address was delivered in the context of the anticipated signature and provisional application of the United Kingdom-European Union (UK-EU) Treaty in respect of Gibraltar, with key legal and indirect tax changes expected to apply from 15 July 2026.

Key highlights of the announcement are summarized below.

Key highlights

Corporate taxation

The corporate tax rate remains at 15% of taxable income.

Personal tax, pension and social security

No changes to personal income tax rates that currently apply to individuals were announced. The tax system results in an effective (overall) tax rate for resident individuals that does not exceed 25%.

The age entitlement for men to be eligible for a Gibraltar state pension was announced to be equalized at 60, in line with women. The change was confirmed to come into effect from 1 July 2026.

Social security contributions for both employers and employees remain unchanged with the minimum and maximum amounts for employers' and employees' social security payments being the same as of 1 July 2025.

Tax allowance

A new tax allowance was introduced for fees that Gibraltar-resident musicians receive for live performances, to the extent that earnings are reinvested into equipment and instruments. This measure is to apply retrospectively from 1 July 2019.

Property-related

No changes to stamp duty were announced.

Transactions tax

The Government had previously announced a transactions tax on goods as part of a proposed UK-EU trade and mobility agreement.

The Budget Address announced that the UK-EU Treaty is expected to be signed on 14 July 2026 and provisionally applied from 15 July 2026. Gibraltar's related legislative changes are intended to take effect from midnight on 15 July 2026. As part of the Treaty, the existing import duty regime would be replaced by the new transaction tax regime.

It was confirmed that:

• The transactions tax rate will be fixed at 15% for 2026 (the first year), increasing to 16% in the second year and, in the third year, will settle at a rate no lower than the lowest rate of value-added tax (VAT) in the EU (currently 17%).
• The amount to which the transaction tax rate would be levied would include cost, insurance, freight and excise duties for each category.
• Changes to how taxation and duty is levied on tobacco products include a revised excise duty structure aimed at reducing price differentials with Spain.
• For vehicles, the transaction tax payable would start at 15% regardless of whether the importer is an individual or entity.

Implications

Multinational enterprises with operations or supply chains involving Gibraltar should assess how the new transaction tax and revised excise duty rules may affect import costs, pricing, systems and contractual arrangements from 15 July 2026, while noting that headline corporate tax and personal income tax rates remain unchanged.