Gibraltar & The Treaty — The Reading RoomGibraltar and the treaty, in plain wordsThe English texts come from the official English versions published by the European Union (EU) on EUR-Lex, the United Kingdom (UK) on GOV.UK and UK Parliament, and Gibraltar (the Acts and legal notices that change Gibraltar's law for the treaty, from Gibraltar Laws and the Gibraltar Gazette, and Gibraltar Parliament records: Hansard, Bills and Command Papers), plus HM Government of Gibraltar and European Commission press releases where a statement is quoted. Where a text exists only in Spanish (BOE), we quote it in Spanish and say so, and any translation beside it is ours.
Last checked: 11 November 2026
This page has two calculators: one for the Transaction Tax on goods, and one for the deduction that the Transaction Tax (Deductions) Rules 2026 allow in the cases they set out. Each sum is shown with its working and the provision it comes from. Everything runs on your device; nothing you type is sent anywhere.
The Act titled 'Treaty on Gibraltar and the European Union Act 2026' (the Act) makes goods produced in Gibraltar, and goods imported into Gibraltar, liable to the payment of a transaction tax, subject to any applicable exemptions or exclusions, in the circumstances set out in paragraphs 1 and 2 of Schedule 2. The calculator does not decide which rate or exemption fits your goods: you choose.
The Government says the 90 days ran from 15 July to 12 October 2026. This page knows of no extension; the Minister may extend them by a further 90 days by notice in the Gazette, if an independent committee of suitably qualified people appointed by the Minister advises it.
The Rules give a deduction to a 'relevant person' (rule 3). That is a business certified as a retail or wholesale business by the Office of Fair Trading (OFT), unless its trade mainly includes selling food, drinks and household grocery goods, tobacco, wine or spirits, fuel or vehicles. Subject to the Rules, a relevant person that has costs because of Transaction Tax during the first 90 days from 's start date (the Rules call it the 'Implementation Date', and say it has the same meaning as in the Act, which counts both the general and the provisional start date: see A1) can claim a deduction. The deduction is the amount by which the Transaction Tax it paid in those 90 days is higher than the import duty it would have paid in the same 90 days if Transaction Tax had not started. If the tax paid is not higher, there is no deduction (rule 4(1)). The deduction cannot be more than half (50%) of the tax the business paid in the accounting period or year of assessment immediately before (A4 explains which tax). It is taken off the profits assessed for tax for the accounting period or year of assessment that starts on or after the start date (rule 4(5)). The Rules do not say which of the two start dates begins the 90 days if the dates are different, and the same question arises for the accounting period in rule 4(5). The Government says the 90 days ran from 15 July to 12 October 2026 (press release 692/2026), and this calculator follows that statement (see A1). The Minister may extend them by a further 90 days by a notice in the Gazette, if an independent committee of suitably qualified people appointed by the Minister advises it, and may ask the committee for advice again at the end of each extension (rule 5). This calculator does not know of any extension.The treatyThe Agreement in respect of Gibraltar between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part. It was signed in Brussels on 14 July 2026.
Your imports in the period, by category of goods, with the import duty rate that would have applied if Transaction Tax had not come in
Gibraltar has no VAT: the Transaction Tax is a separate tax on goods.
A1. Schedule 2 paragraph 3(1) sets the standard rate at 15% for the first 12 months after the treaty comes into force (year 1), 16% for the next 12 months, up to 24 months after it comes into force (year 2), and after 24 months at 17%, or the lowest rate any applies at that time. Section 6 of the Act defines, for the Act, two dates for the treaty: 'the General Implementation Date', the date the treaty enters into force for general purposes after notification that the internal steps for agreeing to be bound are complete, in accordance with Article 336(1), and 'the Provisional Implementation Date', any date agreed in accordance with Article 336(2) for applying the treaty provisionally. Unless the Act says or implies otherwise, 'the Implementation Date' includes any Provisional Implementation Date and the General Implementation Date (section 6(2)). Schedule 2 says 'entry into force', so it is not certain that it reaches the provisional date; that is why this is an assumption. If the 12 and 24 months run from the provisional start, then we take that start to be 15 July 2026, the date the Government gives for the provisional application of the treaty (press release 692/2026); year 1 then ends on 15 July 2027 and year 2 ends on 15 July 2028 (on the day count in A2). This is our reading, not an official statement. If the months run from another date, change the start date in the form.EU countriesThe countries that belong to the European Union (EU). The treaty calls each of them a “Member State”.
A2. If the period 'ending 12 months following' the start date in A1 includes the day 12 months after it, then 15 July 2027 is still year 1 and 16 July 2027 is the first day of year 2. In the same way, if year 2 includes the day 24 months after the start date, then 15 July 2028 is still year 2 and 16 July 2028 is the first day after 24 months.
A3. If a tax or duty comes to a part of a penny, then it is rounded to the nearest penny, halves up. The Act and the Rules give no rounding rule.
A4. Rule 4(5)(a) caps the deduction at 50% of 'the amount of tax paid by the relevant person in the immediately preceding accounting period or year of assessment'. Rule 4(5)(b) says the deduction is taken off the profits assessed for tax for the accounting period or year of assessment that starts on or after the start date. The rule does not name the tax. If it means corporation tax or income tax (the tax named in rule 4(6)(a)), then the cap is 50% of that tax which the business paid in its previous accounting period or year of assessment, which is the figure you type. If it is read differently, the cap changes.
A5. Rule 4(2) applies where goods a relevant person imported during the 90 days in rule 4(1) would have paid import duty at more than one rate if Transaction Tax had not started. The import duty that would have been payable is then worked out with a weighted average of the import duty rates for the broad categories of goods that relevant person imported. Each category counts in proportion to its share of the relevant person's total imports in that period, at the rate that would have applied to it if Transaction Tax had not started. If that weighted average is applied to the relevant person's total imports in the period, then the duty is the sum of each category's imports multiplied by its rate, rounded once at the end as in A3. Under rule 4(3) the calculation must be supported by the information, documents and workings the Commissioner may reasonably require, and must satisfy the Commissioner. Under rule 4(4) the Commissioner may also require more information and documents in support, including purchase records, customs declarations, details of the categories of goods imported, the proportion of imports in each category and the import duty rates that would have applied to each, and may withhold or adjust the deduction if the relevant person does not provide them or if the Commissioner is not satisfied that the weighted average calculation is accurate or properly substantiated. The calculator does not decide that.
A6. If you type a comma or a point in an amount, then the last one with one or two digits after it is the decimal mark, and a point or comma followed by exactly three digits is a thousands mark (so 1,250 and 1.250 are both 1250, and 1250,5 is 1250.50).
A7. If you type a rate in the box for a different standard rate, which applies only after 24 months from the treaty's entry into force, then the calculator treats it as the lowest rate any EU country applies at that time (Schedule 2 paragraph 3(1)(c)) and uses it instead of 17%. It does not check the rate.
These are the official texts as held in our library, not translated. Spacing is as extracted from the official PDF. Each has the library file and line numbers.
The official text on Gibraltar Laws (opens another website)
Library file: act-2026.txt, lines 3234–3249
Liability to transaction tax and payment into consolidated fund.
98.(1) Goods that are-
(a) produced in Gibraltar; or
(b) imported into Gibraltar,
are, subject to any applicable exemptions or exclusions, liable to the payment of a transaction
tax in the circumstances set out in paragraphs 1 and 2 of Schedule 2.
(2) The transaction tax referred to in subsection (1) must be collected by the Collector.
(3) The Collector must ensure that any transaction tax collected under this section is paid
into the consolidated fund.Library file: act-2026.txt, lines 3292–3301
Persons liable to pay the transaction tax.
100.(1) The person who declares the goods or on whose behalf they are declared for entry into
Gibraltar shall be liable to pay the transaction tax.
(2) In the case of irregular entry into Gibraltar, any other person involved in the irregular
entry of such the goods shall be liable to pay the transaction tax.
(3) The person producing the goods in Gibraltar shall be liable to pay the transaction tax.Library file: act-2026.txt, lines 3302–3320
Exemptions from transaction tax.
101.(1) Goods shall be exempt from the transaction tax where, had such goods been imported,
supplied or acquired in the European Union, they would have benefited from a mandatory
exemption from VAT.
(2) Where the Specialised Committee on Economy and Trade approves the application of a
discretionary exemption from VAT as regards particular goods, the Minister may by Notice
published in the Gazette declare such goods to be exempt from the transaction tax.
(3) Liquefied Natural Gas imported and used for the production of electricity and electricity
produced in Gibraltar are exempted from transaction tax.Library file: act-2026.txt, lines 3321–3333
Refund of the transaction tax where goods are exported from Gibraltar in commercial
quantities.
102.(1) The Collector shall refund the transaction tax charged on a good upon its export to the
European Union provided the exporter can prove to the Collector’s satisfaction that VAT has
been paid in the European Union.
(2) The Collector shall refund the transaction tax where goods are exported to a country
outside the customs union via a designated customs post and the Collector has been so notified
by the designated customs post.
(3) Goods consumed in Gibraltar shall not be eligible for a refund of the transaction tax.Library file: act-2026.txt, lines 5039–5087
Chargeability of transaction tax and excise duty.
1.(1) The transaction tax, and excise duty, where applicable, shall be charged and collected-
(a) where goods which were in free circulation in the Union and which are moved to
Gibraltar having been transported under the special transit system for Gibraltar (in
accordance with the procedure provided for in Annex 19), upon presentation of the
goods to customs;
(b) where the goods are imported from countries and territories outside the customs
union into Gibraltar having been transported under the special transit system for
Gibraltar (in accordance with the procedure provided for in Annex 21), upon
presentation of the goods to customs;
(c) where, within the special fiscal or customs procedures established in Annexes 19
and 21, Union goods are put on the market in Gibraltar or a customs debt has arisen
for non-Union goods;
(d) when goods produced in Gibraltar leave the production site;
(e) when goods are found to have irregularly entered Gibraltar; or
(f) when goods are brought into Gibraltar by travellers in excess of the quantitative
thresholds provided for in Annex 23 but are still not considered as of commercial
nature upon declaration or completion of checks.
(2) For the purposes of subparagraph (1)(d), goods are considered to have left the production
site-
(a) when the goods are physically dispatched or transported out of the production
facility by or on behalf of the producer, irrespective of the destination or purpose
of such movement;
(b) the moment when the right to dispose of goods as owner is transferred to another
party, whether by sale, exchange or any other legal means, even if the goods
remain at the production facility.
PART 2
TRANSACTION TAXLibrary file: act-2026.txt, lines 5088–5111
Taxable amount.
2.(1) The taxable amount for goods imported into Gibraltar shall be determined with reference
to the value for customs purposes. It shall include, insofar as these elements were not already
included in the customs value-
(a) taxes, duties, levies and other charges (including excise duties) due by reason of
importation, excluding the transaction tax to be levied; and
(b) incidental expenses, such as commission, packing, transport and insurance costs.
(2) The taxable amount for goods produced in Gibraltar shall be the open market value at the
time the goods leave the production site.
(3) For the purposes of subparagraph (2), “open market value” means the full amount that,
in order to obtain the goods in question at that time, a customer at the same marketing stage
would have to pay, under conditions of fair competition, to a supplier at arm’s length in
Gibraltar.
(4) Where no comparable supply of goods can be ascertained, “open market value” for the
purposes of subparagraph (2) means an amount that is not less than the purchase price of the
goods or of similar goods or, in the absence of a purchase price, the cost price, determined at
the time the goods leave the production site.Library file: act-2026.txt, lines 5114–5132
3.(1) The “standard rate” of the transaction tax shall be set as follows—
(a) in the period ending 12 months following the entry into force of the TGEU (year
1): 15%.
(b) in the period commencing after 12 months following the entry into force of the
TGEU and ending 24 months following the entry into force of the TGEU (year 2):
16%.
(c) after 24 months following the entry into force of the TGEU: 17% or such rate as
may be the lowest applied by any Member State at that time.Library file: act-2026.txt, lines 5133–5156
(2) The “reduced rate” specified in column 3 applies to the goods described in column 2—
DESCRIPTION OF GOODS RATE
1 Goods of a kind normally intended for use in agricultural production but 5%
excluding capital goods such as machinery or buildings; and, until 1
January 2032, supply of chemical pesticides and chemical fertilisers.
2 Live equines. 5%
3 Live plants and other floricultural products, including bulbs, cotton, roots 5%
and the like, cut flowers and ornamental foliage.
4 Children’s clothing and footwear; children’s car seats. 5%
5 Bicycles, including electric bicycles; 5%
6 Works of art, collectors’ items and antiques listed in Annex IX, Parts A, 5%
B and C of the Council Directive 2006/112/EC.
7 Tools and other equipment of a kind normally intended for use in rescue 5%
or first aid services when supplied to public bodies or non-profit-making
organisations active in civil or community protection.Library file: act-2026.txt, lines 5157–5199
(3) The “super reduced rate” specified in column 3 applies to the goods described in column
2-
DESCRIPTION OF GOODS RATE
1 Foodstuffs (including beverages but excluding alcoholic beverages) for 0%
human and animal consumption; live animals, seeds, plants and
ingredients normally intended for use in the preparation of foodstuffs;
products normally used to supplement foodstuffs or as a substitute for
foodstuffs.
2 Supply of water. 0%
3 Pharmaceutical products used for medical and veterinary purposes, 0%
including products used for contraception and female sanitary protection,
and absorbent hygiene products.
4 Medical equipment, appliances, devices, items, aids and protective gear, 0%
including health protection masks, normally intended for use in health
care or for the use of the disabled, goods essential to compensate and
overcome disability.
5 Supply, including on loan by libraries, of books, newspapers and 0%
periodicals either on physical means of support or supplied electronically,
or both, (including brochures, leaflets and similar printed matter,
children’s picture, drawing or colouring books, music printed or in
manuscript form, maps and hydrographic or similar charts), other than
publications wholly or predominantly devoted to advertising and other
than publications wholly or predominantly consisting of video content or
audible music; production of publications of non-profit-making
organisations.
6 Supply of solar panels to be installed on and adjacent to private dwellings, 0%
housing and public and other buildings used for activities in the public
interest.Library file: act-2026.txt, lines 3250–3291
Transaction tax rates.
99.(1) The transaction tax may be charged at different rates and in respect of different goods.
(2) Paragraph 3 of Schedule 2, which sets out the transaction tax rates and the goods to which
the rates apply, has effect.
(3) Subject to subsection (4), the Minister may make regulations to-
(a) amend the transaction tax rates; and
(b) change a good or category of good from one rate to another.
(4) Where the Minister amends the transaction tax rate or changes a good or category from
one rate to another-
(a) (where the change is made at any time after the end of 24 months following the
entry into force of the TGEU) the standard rate shall be set at not less than the
lowest standard VAT rate applied by a Member State at that time;
(b) the list of goods to which a reduced or super reduced rate applies shall only include
goods to which Member States may, in line with European Union law concerning
VAT, apply a reduced or super reduced rate; and
(c) if the list of goods referred to in paragraph 3 of the Schedule is modified-
(i) such amendments must be in line with European Union law concerning
VAT, and
(ii) the regulations may not come into operation until the European Union has
been notified of the changes.
(5) Subsection (4) does not apply where the Minister amends the Schedule following a
recommendation from the independent consultative body referred to in Article 248 and Article
2 of Annex 24.Library file: act-2026.txt, lines 665–683
Implementation dates and duration.
6.(1) In this Act—
(a) “the General Implementation Date” means the date on which the TGEU enters into
force for general purpose following notification of completion of internal
requirements and procedures for establishing consent to be bound in accordance
with Article 336(1) of the TGEU; and
(b) “the Provisional Implementation Date” means any date agreed in accordance with
Article 336(2) for the provisional application of the TGEU.
(2) Except where the contrary is expressed or implied, a reference in this Act to “the
Implementation Date” includes a reference to any Provisional Implementation Date and to the
General Implementation Date.
(3) The provisions of this Act apply in relation to the TGEU while it continues to have effect,
and unless and until it is terminated in accordance with Article 334.Library file: act-2026.txt, lines 1–2
Treaty on Gibraltar and the European Union Act 2026The official text on Gibraltar Laws (PDF, opens another website)
Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 57–81
Interpretation.
3. In these Rules –
“Implementation Date” has the same meaning as in the Treaty on Gibraltar and the
European Union Act 2026;
“transaction tax” has the same meaning as in the Treaty on Gibraltar and the European
Union Act 2026;
“relevant person” means any company, partnership, sole trader or other person, whether
incorporated or unincorporated, carrying on a trade in the retail or wholesale sectors
and certified as such by the Office of Fair Trading, with the exception of those
carrying on a trade which principally includes the sale of–
(a) food, beverages and household grocery products;
(b) tobacco;
(c) wine or spirits;
(d) fuel; or
(e) vehicles.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 84–97
4.(1) Subject to these Rules, where a relevant person incurs costs in respect of transaction tax
within the period of 90 days beginning on the Implementation Date, that relevant person shall
be entitled to claim a deduction equal to the difference between the amount of transaction tax
paid by that relevant person in that period and the amount of import duty which would have
been payable previously in that same period had the transaction tax not come into operation
(if the amount of transaction tax paid is higher).Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 98–106
(2) For the purposes of subrule (1), where goods imported by a relevant person during the
period referred to in that subrule would, had the transaction tax not come into operation, have
been subject to import duty at more than one rate, the amount of import duty which would
have been payable shall be calculated by applying a weighted average of the rates of import
duty applicable to the broad categories of goods imported by that relevant person, determined
by reference to the proportion of the relevant person’s total imports during that period falling
within each such category and the rate of import duty which would, had the transaction tax not
come into operation, have applied to that category.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 107–125
(3) A calculation made under subrule (2) shall be supported by such information,
documentation and workings as the Commissioner may reasonably require and shall be to the
satisfaction of the Commissioner.
(4) Where a relevant person is required to make a weighted average calculation under subrule
(2), the Commissioner may–
(a) require the relevant person to provide such additional information or
documentation in support of the calculation, including, but not limited to, purchase
records, customs declarations, details of the categories of goods imported, the
proportion of imports allocated to each category and the rates of import duty that
would, had the transaction tax not come into operation, have applied to each such
category; and
(b) withhold or adjust the deduction under subrule (1) where the relevant person fails
to provide the information or documentation required under paragraph (a), or
where the Commissioner is not satisfied that the weighted average calculation is
accurate or properly substantiated.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 126–134
(5) A deduction under subrule (1) shall be–
(a) limited to an amount equal to 50% of the amount of tax paid by the relevant person
in the immediately preceding accounting period or year of assessment; and
(b) allowed in computing the assessable profits of a relevant person for the accounting
period or year of assessment, as the case may be, commencing on or after the
Implementation Date.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 135–167
(6) A relevant person shall not be entitled to a deduction under this rule unless, as at the
Implementation Date, that relevant person is compliant with the following statutory
obligations–
(a) all filing and payment obligations in respect of corporation tax or income tax, as
applicable;
(b) all filing and payment obligations in respect of Pay As You Earn (PAYE) tax; and
(c) all filing and payment obligations in respect of social insurance contributions.
(7) Notwithstanding subrule (6), the Commissioner may, in their absolute discretion, permit
a relevant person to qualify for the deduction under this rule where the Commissioner is
satisfied that a relevant person, not meeting the conditions stipulated in subrule (6), complies
with the statutory obligations stated therein within 30 days after these Rules come into
operation.
(8) The discretion set out in subrule (7) shall be exercised only where–
(a) the relevant person makes a written application to the Commissioner;
(b) the application is supported by evidence demonstrating compliance with the
statutory obligations specified in subrule (6); and
(c) the Commissioner has approved the application in writing.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 168–177
(9) Any claim for a deduction under this rule shall be accompanied by–
(a) certification from the Office of Fair Trading stating that the applicant is a relevant
person for the purposes of this rule;
(b) documentation, including but not limited to proof of payment of the amount of
transaction tax paid in relation to the period specified in subrule (1); and
(c) where applicable, any information or documentation required under subrule (3).Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 178–194
(10) The Commissioner may review any claim for deduction made under this rule and may
adjust or disregard the amount of the deduction if the claim is found to be inaccurate, overstated
or otherwise not genuine and shall notify a relevant person in writing of any such
determination.
(11) A relevant person is not entitled to a deduction under this rule if that relevant person
has been granted assistance under any scheme prescribed or published since the
Implementation Date which has the aim of financially supporting businesses in the
modernisation of their premises, processes and procedures, IT or staff training.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 195–204
Extension of 90-day period.
5.(1) The Minister may extend the 90-day period referred to in rule 4(1) by a further 90 days
by Notice in the Gazette if advised to do so by an independent committee composed of suitably
qualified persons appointed by the Minister.
(2) At the end of a 90-day extension the Minister may ask the independent committee for
advice on whether the period should be further extended and such advice may be sought at the
end of each subsequent extension period.Library file: ln-2026-338-transaction-tax-deductions-rules.txt, lines 205–220
De minimis aid.
6.(1) A deduction under rule 4 shall only be available where the Commissioner is satisfied
that its grant complies with the provisions relating to de minimis aid that apply by virtue of
section 68(4) of the Treaty on Gibraltar and the European Union Act 2026 and any legislation
made under that Act.
(2) Where the Commissioner determines that a deduction may only be granted in part in
order to comply with subrule (1), the deduction shall be reduced accordingly.
(3) A relevant person claiming a deduction under rule 4 shall declare, and provide supporting
documentation in respect of, any de minimis aid or other state aid received by that person
during the 3-year period preceding the claim and the Commissioner may require any further
information or documentation for the purpose of determining compliance with this rule.Texts of the Government of Gibraltar on this page (laws, legal notices, the Gazette, Hansard and press releases): © Crown copyright, Government of Gibraltar, reproduced under the Government's copyright notice with the source named and the copyright acknowledged; Hansard: © Gibraltar Parliament. Every one can be read free, in full, on this site (the texts: the Act and the Constitution; the law changes, with the Legal Notices; the statements, by sitting) or at the official source (Gibraltar Laws; Hansard on parliament.gi; press releases).
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