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Minister Arias-Vasquez Publishes Transaction Tax (Deductions) Rules 2026

Minister Arias-Vasquez Publishes Transaction Tax (Deductions) Rules 2026

The Minister for Health, Care and Business, the Hon Gemma Arias-Vasquez MP, has published the Transaction Tax (Deductions) Rules 2026, giving legal effect to one of the business support measures announced in her Budget address earlier this year. The Rules provide targeted tax relief to eligible retail and wholesale businesses for the additional cost of transaction tax incurred in the first 90 days after the Treaty on Gibraltar and the European Union was provisionally applied on 15 July 2026.

Eligible businesses may claim a deduction against their assessable profits equal to the difference between the transaction tax paid in that period and the import duty that would otherwise have been payable, where transaction tax is higher. The deduction is capped at 50% of the tax paid in the preceding accounting period or year of assessment and applies to the first accounting period or year of assessment beginning on or after 15 July 2026.

The relief covers transaction tax paid from 15 July 2026, so eligible businesses will be able to claim for tax already incurred since the Treaty was provisionally applied, as well as for tax paid during the remainder of the 90-day period, which ends on 12 October 2026. Publishing the Rules now allows businesses to obtain certification and assemble the records needed to support their claims while the period is still running and ensures that the arrangements for any extension are in place before it ends.

The relief is available to retail and wholesale businesses certified by the Office of Fair Trading, excluding those principally selling food, beverages and household grocery products, tobacco, wine or spirits, fuel or vehicles. Businesses must also have been compliant with their tax, PAYE and social insurance obligations on 15 July 2026, or become compliant within 30 days of the Rules coming into force with the written approval of the Commissioner of Income Tax.

Claims must include Office of Fair Trading certification and proof of transaction tax paid, and all deductions must comply with the de minimis state aid rules under the Treaty on Gibraltar and the European Union Act 2026.

In line with the Budget announcement, Government will also publish a scheme in the near future to support businesses with the modernisation of their premises, processes, IT and staff training. Businesses will be able to benefit from only one of these two measures, and those receiving relief under the Transaction Tax (Deductions) Rules 2026 will not be eligible for assistance under the modernisation scheme.

The 90-day period may be extended by further 90-day periods on the advice of an independent committee appointed by the Minister.

The Minister for Health, Care and Business, the Hon Gemma Arias-Vasquez MP, said:

"In my Budget address I made clear that Government would stand alongside local businesses as they adjust to the new arrangements under the Treaty. These Rules deliver on that commitment. They provide practical, targeted relief to the retailers and wholesalers most directly affected by the transition from import duty to transaction tax, while ensuring that support goes to businesses that meet their obligations. I encourage every eligible business to seek certification from the Office of Fair Trading and to keep full records of the transaction tax they have paid, so that they can claim the relief to which they may be entitled."