Gibraltar Introduces Transaction Tax: New Indirect Tax Framework Under the UK–EU Agreement
- Under the post-Brexit UK–EU agreement (and customs union with the EU), Gibraltar is introducing a new Transaction Tax on goods — functioning more like an import duty/sales tax than VAT — levied when commercial goods are imported or manufactured for sale, collected via Customs at the point of entry. [1stopvat.com], [vatcalc.com]
- Provisionally implemented from 15 July 2026 (pushed back from 10 April), the standard rate starts at 15% (2026), rising to 16% (2027) and 17% (2028, aligning with the EU’s lowest VAT rate, Luxembourg), with a 5% reduced rate and a zero rate for certain goods (e.g. basic foods, medical supplies, books). [1stopvat.com], [vatcalc.com]
- Calculated on the customs value of goods (potentially including freight, insurance and packaging), it ends Gibraltar’s long-standing VAT-free regime and is part of the deal maintaining an open border with Spain; exemptions apply to bunkering fuel, ship/aircraft supplies and financial services. [1stopvat.com], [ey.com]
External links
- Gibraltar Introduces Transaction Tax: New Indirect Tax Framework Under the UK–EU Agreement – 1StopVAT [1stopvat.com]
- Gibraltar 15% Transaction Tax – 15 July 2026 – VATCalc [vatcalc.com]
- Gibraltar announces Transaction Tax details and duty changes – EY [ey.com]
- Under the post-Brexit UK–EU agreement, Gibraltar is introducing a Transaction Tax (TT) on goods, ending its long-standing VAT-free regime. The TT applies to goods imported or manufactured for sale in Gibraltar (not services), levied on customs value at importation, manufacture, or removal from bond. [ey.com], [vatcalc.com]
- The standard rate is phased: 15% initially, 16% in year two, and aligning with the lowest EU standard VAT rate (currently 17%) from year three. Reduced (5%) and zero (0%) rates apply to essentials, with exemptions for bunkering fuel, ship supplies and goods not for sale. [ey.com], [vatcalc.com]
- The TT forms part of a customs union between Gibraltar and the EU, enabling frictionless movement of people and goods across the Spanish border. It replaces the existing customs and excise regime and addresses Madrid’s concerns about competition distortion and illicit trade. [ey.com]
