Gi Transaction Tax Transition

---
name: gi-transaction-tax-transition
description: "Prepare an evidence-led review of goods imports, local production and the 2026 transaction-tax transition. This is a transition research draft, not a customs declaration or an exhaustive commodity-rate catalogue. This source-cited draft supports preparation of reviewable working papers using the stated periods, evidence requirements and computation examples. Retain source evidence and effective dates; unresolved points and professional review remain explicit. Use the linked official materials when checking a case, and obtain a qualified local review before filing or making a payment. Read the explicit exclusions before applying its calculations to different facts."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/gi-transaction-tax-transition"
  jurisdiction: "GI"
  tax_year: "2026"
  last_updated: "2026-11-01"
---

# Gibraltar goods transaction-tax transition v0.10

> **Source-cited draft.** Professional review is pending. Figures are limited to the periods and assumptions below. This Guide prepares working papers; it is not authority to file or pay.

## Who this applies to

Prepare an evidence-led review of goods imports, local production and the 2026 transaction-tax transition. This is a transition research draft, not a customs declaration or an exhaustive commodity-rate catalogue.

Sources were first accessed on 22 October 2026 and the available primary texts were rechecked on 28 October 2026. The Council register returned HTTP 403 to the script fetch and was then read successfully in the normal browser; the provisional-application observation was preserved. A dated rate table controls its stated period; an undated guidance page does not prove that all later amendments have been incorporated.

Section 98 charges goods **produced in Gibraltar or imported into Gibraltar**, subject to exemptions and exclusions. The consolidation's commencement table records the remaining provisions commencing on 15 July 2026 under LN 2026/148. Use the enacted goods charge rather than the earlier March press explanation as the scope authority. This Guide does not establish a general retail VAT or a service-tax regime. [Act, commencement table and section 98](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

Under section 100, the declarant or person on whose behalf entry is declared is liable. Others involved in irregular entry are also liable; for Gibraltar production, the producer is liable. Identify the liable person before allocating the charge to a customer or an intermediary. [Section 100](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

For Union goods, establish free-circulation status at the designated customs post before choosing Annex 19. A mixed Union/non-Union operation follows the separate Annex 21 route described by Customs; an Annex 19 authorisation alone does not establish that route. Regulation 3 of LN 2026/211 defines Union goods and indirect tax; regulation 4 applies the listed Union rules with the domestic replacements in Schedule 2. [LN 2026/211, regulations 3–4 and Schedules 1–2](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-special-customs-procedures-concerning-union-goods-regulations-2026-8575/download); [Annex 19 guidance, introduction](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf).

For Union-goods special procedures, first follow the OFT trading-licence process. After its formalities and before the licence is granted, apply to HM Customs Gibraltar for the procedure authorisation; OFT issues the licence after that authorisation. Warehousing/inward-processing preparation includes a premises plan and relevant segregation, traceable digital inventory, security, Customs access and a guarantee covering tax/duty. Temporary admission requires unaltered goods and a guarantee. Existing operators continuing after the transition keep the existing licence under the specific guidance exception, but still need the new procedure authorisation. These are published requirements, not approval of any actual premises or guarantee. [Guidance, sections 2–3 and 5.3–5.4](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf).

## Rates, bands and thresholds

The treaty date rule is now reconciled. Article 336(4) treats references in the agreement to entry into force as references to provisional application once provisional application begins. The Council register records **15 July 2026**. Domestic sections 6 and 10 give the treaty effect from the Implementation Date and require domestic law to operate consistently with it. Annex 24, Part II, paragraph 3(a), supplies the year-one/year-two/year-three rate sequence; domestic Schedule 2 paragraph 3 expresses the first two periods as 12 and 24 months. [Treaty, Articles 248 and 336](https://assets.publishing.service.gov.uk/media/6a56149a6d6d5c7e2845c8d1/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v1of2.pdf); [Annex 24](https://assets.publishing.service.gov.uk/media/6a56149a9e63154454413620/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v2of2.pdf); [domestic sections 6, 10 and Schedule 2](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

The resulting calendar, derived from those provisions, is:

| Period under the baseline enactment | Standard rate | Official provision |
|---|---|---|
| 15 July 2026–14 July 2027 | 15% | [Schedule 2 paragraph 3(1); Annex 24 II.3(a)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf) |
| 15 July 2027–14 July 2028 | 16% | [Schedule 2 paragraph 3(1); Annex 24 II.3(a)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf) |
| From 15 July 2028 | 17% or the lowest Member State standard rate then applicable, as provided by the legislation | [Schedule 2 paragraph 3(1); Annex 24 II.3(a)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf) |

This calendar is a derivation from the current enactment and treaty, not a promise that future legislation stays unchanged. Section 99 permits amendments and contains conditions and an exception for consultative-body recommendations. Annex 24 also provides for recommendations affecting goods/categories. Check amendments and applicable category rates on the chargeable-event date. A later general ratification date does not restart the treaty's elapsed provisional-application period. [Article 336(3)–(4)](https://assets.publishing.service.gov.uk/media/6a56149a6d6d5c7e2845c8d1/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v1of2.pdf); [Annex 24, Part II, paragraph 3(a)](https://assets.publishing.service.gov.uk/media/6a56149a9e63154454413620/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v2of2.pdf).

**Date-boundary illustration:** assuming the baseline law remains unchanged and the goods are standard-rated, an established £1,000 taxable amount charged on 14 July 2027 produces £150; the same amount charged on 15 July 2027 produces £160. Use the statutory chargeable event, not the order date. This is a future-period illustration, not a verified future rate ruling.

The schedule's 5% categories include agricultural inputs subject to capital-goods exclusions and the chemical pesticide/fertiliser time limit; live equines; specified plants/floricultural goods; children's clothing, footwear and car seats; bicycles including electric bicycles; defined art, collectors' items and antiques; and qualifying rescue/first-aid equipment supplied to public or eligible nonprofit bodies. Classification depends on the full statutory description, recipient and any incorporated EU definition. [Paragraph 3(2), printed page 105](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

The 0% categories cover specified foodstuffs excluding alcoholic beverages, water, qualifying pharmaceutical/hygiene products, medical/disability equipment, qualifying publications, and solar panels for the specified buildings. Publication exclusions include predominantly advertising, video or audible-music content. These are category summaries, not a commodity classification decision; retain the exact applicable row and evidence. A zero rate does not by itself remove declaration obligations. [Paragraph 3(3), printed pages 105–106](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

## The base

### Chargeable event and valuation

Schedule 2 paragraph 1 charges and collects tax at these events:

- Goods in Union free circulation transported under the special Gibraltar transit procedure: presentation to customs.
- Goods from outside the customs union transported under the relevant special transit procedure: presentation to customs.
- Within the special fiscal/customs procedures: Union goods put on the Gibraltar market, or a customs debt arising for non-Union goods.
- Gibraltar-produced goods leaving the production site.
- Discovery of irregular entry.
- Travellers' non-commercial goods above the applicable quantitative thresholds: declaration or completion of checks.

For local production, leaving includes physical dispatch regardless of destination or purpose **and transfer of the right to dispose as owner even if the goods remain at the facility**. Record both dates; do not wait for physical delivery where ownership-disposal rights have already transferred. The treaty Annex 23 traveller thresholds and Annexes 19/21 procedures need separate verification for the actual movement. [Schedule 2, paragraph 1, printed pages 103–104](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

For imports, begin with customs value. Add import taxes, duties, levies and other charges, including excise but excluding transaction tax itself, and incidental costs such as commission, packing, transport and insurance, **only insofar as not already included**. Reconcile invoices and the customs valuation to prevent duplicate freight or insurance. [Schedule 2, paragraph 2(1)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

For Gibraltar production, use open-market value when the goods leave production: the amount payable at the same marketing stage in fair competition to an arm's-length Gibraltar supplier. If no comparable supply can be identified, the statutory floor is purchase price of those or similar goods, or, absent a purchase price, cost price at that time. A cost floor is not an unconditional permission to ignore an identifiable comparable market value. [Paragraph 2(2)–(4)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

### Exemptions and export refunds

Section 101 applies mandatory EU VAT exemptions by asking whether the goods would qualify if imported, supplied or acquired in the EU. A discretionary exemption requires the Committee approval and Minister's Gazette notice described there. It expressly exempts LNG imported and used for electricity production and electricity produced in Gibraltar. Do not treat all fuels or all energy equipment as exempt. [Section 101](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

For commercial exports to the EU, section 102 requires proof satisfactory to the Collector that EU VAT was paid. For exports outside the customs union, it requires export through a designated customs post and notification to the Collector by that post. Goods consumed in Gibraltar do not qualify for refund. Obtain export and destination-tax evidence; this is not an automatic credit for every overseas sale. Refund forms, submission deadlines and operational processing remain unverified. [Section 102](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

### Transitional business deduction

The enacted Transaction Tax (Deductions) Rules commenced on 23 September 2026. Rule 3 covers companies, partnerships, sole traders and other incorporated or unincorporated retail/wholesale traders certified by the Office of Fair Trading. It excludes trades principally selling food, beverages and household groceries, tobacco, wine or spirits, fuel, or vehicles. Obtain certification of the actual business; an ordinary business licence alone does not establish eligibility. [Rules 2–3](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

Rule 4 covers transaction-tax costs within 90 days beginning on the Implementation Date and measures the deduction by tax paid in that period. The official announcement identifies the initial window as **15 July–12 October 2026**. Do not substitute an invoice date for proof of tax payment. Rule 5 permits a further 90 days by Gazette notice following the specified independent committee advice and provides for advice on subsequent extensions. No extension notice has been verified for this Guide; post-12-October payments must remain outside its supported calculation unless that evidence is obtained. [Rules 4(1), 5](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf); [official period explanation](https://www.gibraltar.gov.gi/press-releases/minister-arias-vasquez-publishes-transaction-tax-deductions-rules-2026-6922026-12358).

1. Establish eligible transaction tax **paid** in the supported period.
2. Calculate the import duty that would previously have applied in that same period. For imports subject to multiple historical rates, rule 4(2) requires a weighted average using broad goods categories and their proportions of total imports. Retain the categories, allocation basis, historical rates, customs declarations and purchase records. The Commissioner must be satisfied with the calculation and can require more evidence or withhold/adjust it.
3. Calculate the positive difference between transaction tax and counterfactual duty. If transaction tax is not higher, no deduction arises under rule 4(1).
4. Limit that amount to **50% of tax paid in the immediately preceding accounting period or year of assessment**. Use evidence of payment, not merely the assessed liability.
5. Apply eligibility, aid and other-support restrictions below. Deduct the permitted amount in computing assessable profits for the accounting period/year commencing on or after the Implementation Date; do not automatically put it into the period containing an import date. The announcement describes the first such period.

This is a profit deduction. The deduction amount is not itself a tax credit, repayment or customs refund. [Rule 4(1)–(5)](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

**Boundaries:** zero preceding-period tax paid gives a zero cap under the rule's formula. Equal transaction tax and counterfactual duty give no positive difference. These rules do not state a carry-forward entitlement for the excess above the cap; do not invent one. [Rule 4(1), (5)](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

Rule 6 separately requires compliance with the applicable de minimis aid provisions. Declare and document de minimis and other state aid received during the **three years preceding the claim**. The Commissioner can reduce the deduction to the amount compatible with those provisions. The ordinary aid ceiling and aggregation tests are set out below; actual gross grant equivalent, currency treatment and remaining headroom still require case evidence. [Rule 6](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

The aid-law chain is now identified: TGEU Act section 68(4) gives Annex 18 acts domestic force; Annex 18 applies them with necessary adaptations for Gibraltar and lists Regulation (EU) 2023/2831 at 3.4. For an ordinary case within that Regulation, Article 3(2) sets a EUR 300,000 ceiling for a single undertaking over any three-year period. Article 3(3) uses the legal grant date, not payment date; Article 3(5) measures gross grant equivalent, not the face amount of a profit deduction. Keep the grant/equivalent and currency evidence; this Guide supplies no sterling conversion or automatic remaining allowance. [Act section 68(4)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf); [Annex 18, opening provisions and 3.4](https://assets.publishing.service.gov.uk/media/6a56149a9e63154454413620/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v2of2.pdf); [Regulation 2023/2831, Article 3](https://eur-lex.europa.eu/eli/reg/2023/2831/oj/eng).

Apply the single-undertaking test across direct and indirect majority voting, board appointment/removal, contractual/constitutional dominant influence and voting agreements under Article 2(2); separate company names do not reset the ceiling. Article 3(8)–(9) accounts for mergers, acquisitions and splits. Article 1 excludes the stated primary agricultural/fishery activities, certain processing/marketing cases, export-linked and domestic-preference aid; separated accounts/activities are required for its mixed-activity exception. Article 5 controls cumulation with other aid, including the same-cost intensity/amount limit. Do not apply EUR 300,000 mechanically to excluded sectors or substitute the separate services-of-general-economic-interest regime. [Regulation 2023/2831, Articles 1–3 and 5](https://eur-lex.europa.eu/eli/reg/2023/2831/oj/eng); [Annex 18, 3.4](https://assets.publishing.service.gov.uk/media/6a56149a9e63154454413620/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v2of2.pdf).

Before relying on the transitional deduction, obtain the Commissioner’s acceptance of eligibility, the gross grant equivalent, linked-enterprise aid history and permissible remaining headroom. The Regulation requires an ex-ante precisely calculable equivalent and verification before a new grant; its declaration safeguard applies until the central register covers three years. Rule 6 additionally requires the claimant’s three-year preceding-claim aid declaration. A numerical ceiling does not itself establish a grant, approved deduction or sufficient headroom. [Regulation 2023/2831, Articles 4(1), 6(4), 7(4)](https://eur-lex.europa.eu/eli/reg/2023/2831/oj/eng); [Deductions Rules, rule 6](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

## Deadlines and filing

### Declaration and payment route

Record the goods, liable person, date/event, customs procedure and supporting documents. Establish exemption or rate classification; reconcile the valuation components; compute tax; match the declaration and payment evidence. Keep any export-refund claim and income-tax transition relief separate. Review bonded stock and other transitional procedures before using these rules for pre-commencement stock.

HM Customs' [Goods Transit Process, sections 2 and 4.2](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Transit%20GN.pdf) describes these operational steps:

- For home-use arrivals, present goods to Customs for NCTS arrival confirmation and controls, then submit an **IM4** in ASYCUDA, linking the consignment's movement reference number (MRN).
- Clearance produces an assessment; transaction tax is payable before release. The note permits up to **30 days' deferral in some cases** where goods are not immediately marketed, notably transit-shed stock. This is not a general payment extension.
- For exports of goods already marketed with transaction tax paid, section 4.2 calls for **EX1**, the original import invoice/MRN, and the relevant NCTS transit declaration. Spanish arrival confirmation supports proof of export.

That guidance does not replace section 102's destination-tax and export conditions. Section 4.2 retains a reference to “Section 6 (iv) (A) to (D)” that does not match this note's headings; the destination-treatment cross-reference needs clarification. No live declaration, deferment approval or refund claim has been tested. Retain the assessment, payment/release evidence and linked movement records.

The retained Imports and Exports Act requires an import entry within the relevant period, subject to sections 24 and 26: section 17 states seven clear days for air and fourteen clear days otherwise, using its defined report/arrival date and infectious-disease restriction proviso. Section 23 permits transit-shed deposit or sale of perishable goods on the specified failures, including the separate 21-clear-day clearance limb. These are residual entry rules. Section 2A and TGEU Schedule 1 paragraphs 12–14 make the Act subordinate to the treaty and disapply the old import-duty charge. They do not override immediate presentation, special transit or payment-before-release requirements. [Imports and Exports Act, sections 2A, 17, 21–23](https://www.gibraltarlaws.gov.gi/legislations/imports-and-exports-act-1986-423/download); [TGEU Act, Schedule 1 paragraphs 12–14](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf); [Transit guidance section 2](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Transit%20GN.pdf).

### Authorised Union-goods special procedures

For authorised Union-goods warehousing, the T2GI ends when the Gibraltar IM7 clears; move the goods to the approved warehouse. Discharge through IM4 home use or the appropriate EX3 re-export, IM5 “5001” inward processing or IM9 destruction route. Warehousing permits storage and the specified usual handling such as packing, cleaning or refrigeration; further processing needs inward processing. Regulation 4(3) says the non-ship-supplies period is “between one month and nine months”; guidance 1.1.4 says it must exceed one month and be less than nine months. Do not decide an exact one- or nine-month boundary from the guidance alone. Ship supplies have no minimum. [LN 2026/188, regulation 4(3)](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-annex-19-regulations-2026-8553/download); [guidance 1.1](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf).

For Union-goods inward processing, close the T2GI using IM5 extended code “5001”, use the approved premises, and discharge both processed products and waste through the proper IM4, EX3, IM7 or IM9 route. Goods can instead be released for home use or re-exported unchanged. Temporary admission uses IM5, the declared use and an EX3 to close on re-export. Both have an ordinary three-month limit. A longer initial period or extension requires duly justified circumstances accepted by the designated post which opened the T2GI under regulation 4(6); an operator cannot grant its own extension. [Guidance 1.2–1.3](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf); [LN 2026/188, regulation 4(3), (6)](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-annex-19-regulations-2026-8553/download).

Keep the authorisation, arrival/clearance, inventory movements, removal declaration, tax/excise payments and discharge evidence together. Customs must send arrival advice on the presentation day and control results within three working days; a special-procedure message replaces proof of tax at that stage. Customs supplies case-by-case exit/destruction evidence or monthly tax proof for market releases. These are authority-to-authority reporting duties, not an extra three-day filing allowance for a trader. Missing proofs or failure to discharge can trigger the transfer of Member State VAT/excise under regulation 4(7). [LN 2026/188, regulation 4(2)–(7)](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-annex-19-regulations-2026-8553/download); [guidance section 4](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf).

Within the Union-goods special-procedure regime, Schedule 2 Part A replacements for UCC Articles 102 and 108 require the notified debt to be paid within the Customs-prescribed period, no longer than ten days after notification, subject to the listed suspension cases. Release itself counts as notification where the declared amount equals the payable amount; a guaranteed aggregate notification period cannot exceed 30 days. Deferment under replacements 110–111 needs an application and Customs authorisation, with a guarantee if required, for at most 30 days beginning the day after notification. Other payment facilities under replacement 112 require a guarantee. This bounded regime does not confer a general ten- or thirty-day grace period on an ordinary IM4 release. [LN 2026/211, Schedule 2 Part A paragraphs 31, 37–41](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-special-customs-procedures-concerning-union-goods-regulations-2026-8575/download).

For a debt within that Union-goods special-procedure regime, identify the repayment/remission ground first: overcharge, defective/non-contract goods, Customs error or equity, or invalidated declaration. Replacement 116 normally uses a £10 threshold but permits a requested lower repayment. Replacement 121 gives three years from notification for its overcharge/error/equity limb, one year for defective/non-contract goods, and the applicable invalidation period for invalidated declarations. Evidence of unforeseeable circumstances or force majeure extends the first two periods; an Article 44 appeal suspends their running while it is pending. The applicant submits to HM Customs Gibraltar. These are not a verified deadline or form for the separate section 102 commercial-export refund. [LN 2026/211, regulation 3 and Schedule 2 Part A paragraphs 45–50](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-special-customs-procedures-concerning-union-goods-regulations-2026-8575/download).

### Deduction claim evidence

At the Implementation Date the claimant must meet all applicable filing and payment obligations for corporation/income tax, PAYE and social insurance. The Commissioner has discretion for a person who becomes compliant within 30 days after the Rules commenced, but only with a written application, supporting evidence and **written approval**. Catching up on filings alone does not establish approval. [Rule 4(6)–(8)](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

Each claim requires OFT certification, payment documentation and the applicable weighted-average evidence. The Commissioner can adjust or disregard an inaccurate, overstated or non-genuine claim and must notify the determination in writing. Rule 4(11) excludes a person granted assistance under a scheme prescribed or published since the Implementation Date aimed at financially supporting modernisation of premises, processes/procedures, IT or staff training. Check assistance actually granted and the scheme's purpose and publication date; do not describe this only as a prohibition on double-claiming the same invoice. [Rule 4(9)–(11)](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf).

## Penalties and interest

For that special-procedure regime, non-compliance with movement, storage, processing, temporary-admission or reduced-rate conditions can itself create an indirect-tax customs debt; responsible persons and knowing participants/holders can be liable under replacement 79. Overdue debt is enforceable and replacement 114 charges interest from expiry of the prescribed payment period until payment, without stating a numerical interest rate. Do not substitute a UK/EU interest percentage. [LN 2026/211, Schedule 2 Part A paragraphs 8, 42–43](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-special-customs-procedures-concerning-union-goods-regulations-2026-8575/download).

Failure to make a required entry under section 21 is punishable on summary conviction by a level 3 standard-scale fine. Section 109 covers materially untrue import/export documents or statements for goods whether dutiable or not; its knowing/reckless offence carries up to six months and a level 4 fine on summary conviction, or two years and twice level 5 on indictment. Section 117 supplies a level 4 summary fine where the Act gives no specific penalty. These are the retained customs offences subject to treaty primacy, not a newly verified universal transaction-tax penalty or a conversion of scale levels to pounds. [Imports and Exports Act, sections 2A, 21(3), 109, 117](https://www.gibraltarlaws.gov.gi/legislations/imports-and-exports-act-1986-423/download).

## Cross-border points

For a warehouse re-export, Customs guidance 4.1 requires EX3 before removal, the original import MRN and the correct NCTS T1GI/T2GI movement, followed by EPU export clearance and the Spanish designated-post arrival/closure. Its Spanish Entry Summary Declaration instruction is one hour before arrival. Distinguish this warehouse re-export from the tax-paid EX1 route above. Preserve destination tax and discharge records; neither code alone proves a section 102 refund entitlement. [Goods Transit Process, section 4.1](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Transit%20GN.pdf).

### Transitional goods

Section 6 defines the Implementation Date to include provisional implementation unless the contrary is expressed or implied. The Council treaty register confirms provisional application from **15 July 2026**. Use that evidenced date when examining these domestic transition provisions; do not use the superseded expected April date found in early notices. [Act, section 6](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf); [Council treaty register](https://www.consilium.europa.eu/en/documents/treaties-agreements/agreement/?docLanguage=en&id=2026009).

**Goods already moving:** section 130(2) disapplies the specified treaty title and Part 6 of the Act to movements that started before the Implementation Date and ended afterwards. The operator bears the burden of proving the earlier start with relevant documents. Section 130(5) ends that treatment two months after the Implementation Date. An order or invoice raised before implementation does not by itself prove that movement began then. [Section 130(1)–(5), printed pages 82–83](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

**Earlier import-duty exemption certificates:** section 130(3) concerns certificates issued by the Chief Minister under the specified 2017 Tariff Regulations provision before implementation. It requires the government-to-EU transmission of certificates and relevant historical quantities and quantities commensurate with the projects. The relief is limited by Article 269(4). Section 130(6) limits duration to the shorter of the certificate's duration and three months from implementation. Retaining a certificate alone does not establish every condition; verify the treaty limitation and transmission evidence before claiming. [Section 130(3), (4), (6)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

**Goods already lawfully marketed:** section 130(7) provides three months without the Article 256 requirements for goods lawfully placed on the market before implementation. The operator must prove prior placement and quantities. This provision refers to product requirements; do not turn it into a blanket transaction-tax exemption for every item of old stock. [Section 130(7)–(8)](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

**Special procedures and temporary storage:** section 131 preserves the pre-implementation legislation for goods already in the relevant procedure/storage, subject to different limits. A special procedure is protected only while not discharged and for no longer than two months from implementation. Temporary storage is protected only while it has not ended and no later than its legal time limit. The section does **not** itself state a universal 30-day storage period. Release for free circulation, discharge and re-export fall under the specified treaty title under section 131(3). Read the applicable procedure before treating stored goods as tax-free. [Section 131, printed pages 83–84](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf).

**Evidence example:** on assumed authentic transport records, a consignment whose movement began on 14 July and ended on 20 July 2026 meets the before/after timing limb of section 130(2). A consignment first dispatched on 16 July fails that limb even if ordered on 1 July. For a qualifying certificate, if the evidenced remaining duration is one month, the shorter-of-one-and-three-months rule allows at most one month; the other conditions still apply. Do not extend either case merely because goods remain unsold.

These provisions establish separate routes, not interchangeable exemptions. Attach transport-start evidence, customs procedure records, certificates and quantities to the working paper. Exact time-limit computation, incorporated treaty conditions and any subsequent amendment must be checked for a boundary-date claim.

## Two worked examples that recompute

### Example 1: import valuation

These are assumed classification/rate cases, not rulings on particular goods:

1. **Import:** customs value £10,000 already includes £400 freight. Separately chargeable excise £1,000 and packing £200 are not included. Taxable amount = £10,000 + £1,000 + £200 = **£11,200**. At an established 15% rate, tax = **£1,680**. Adding the £400 again would overstate tax by £60.

These checks recompute the stated assumptions; they do not determine commodity classification, valuation or rate eligibility.

```oa-check
name: Import valuation without duplicate freight
inputs:
  customs_value: 10000
  excise_not_included: 1000
  packing_not_included: 200
  freight_already_included: 400
  rate: 0.15
steps:
  - taxable_amount: customs_value + excise_not_included + packing_not_included
  - tax: taxable_amount * rate
  - duplicate_freight_overstatement: freight_already_included * rate
expected:
  taxable_amount: 11200
  tax: 1680
  duplicate_freight_overstatement: 60
```

### Example 2: mixed-import deduction

**Mixed-import illustration:** assume an evidenced £100,000 historical duty base, with accepted value proportions of 60% at a historical 10% rate and 40% at 0%. The weighted rate is 60% × 10% + 40% × 0% = **6%**, giving counterfactual duty of **£6,000**. Eligible transaction tax actually paid is £15,000, so the difference is £9,000. If immediately preceding-period tax paid was £12,000, the cap is £6,000 and the provisional deduction is **min(£9,000, £6,000) = £6,000**, subject to all remaining conditions. Assuming sufficient taxable profits and an independently established 15% income-tax rate, the resulting tax reduction would be **£900**, not £6,000. The example does not establish any real commodity's historical rate, valuation or allocation basis.

```oa-check
name: Mixed imports deduction limited by prior tax paid
inputs:
  historical_base: 100000
  taxable_proportion: 0.60
  zero_rate_proportion: 0.40
  historical_rate: 0.10
  other_rate: 0
  transaction_tax_paid: 15000
  previous_period_tax_paid: 12000
  income_tax_rate: 0.15
steps:
  - weighted_rate: taxable_proportion * historical_rate + zero_rate_proportion * other_rate
  - historical_duty: historical_base * weighted_rate
  - positive_difference: max(0, transaction_tax_paid - historical_duty)
  - cap: previous_period_tax_paid * 0.50
  - deduction: min(positive_difference, cap)
  - assumed_tax_saving: deduction * income_tax_rate
expected:
  weighted_rate: 0.06
  historical_duty: 6000
  positive_difference: 9000
  cap: 6000
  deduction: 6000
  assumed_tax_saving: 900
```

The preserved production, cost-floor and rate-sensitivity illustrations and the third original executable check remain in [the calculation supplement](../../evidence/research/gibraltar-2026/consumption-completion-2026-10-28/preserved-consumption-controls.md). They use assumed classifications and do not establish a real commodity rate.

## Ask the client first

1. What are the goods, Union/non-Union status, movement route and chargeable-event dates?
2. Who is declarant/producer, and what are the customs valuation and already included costs?
3. What exemption/category evidence, authorisation, guarantee and linked MRN records exist?
4. Was tax paid, were goods marketed/consumed, and what export/discharge and destination-tax evidence exists?
5. Does the trader have OFT relief certification, payment/historical-duty and prior-period tax evidence?
6. What aid/support, linked enterprises and transition/certificate dates affect eligibility?

## Sources

| Source and scope | Official URL | Read on |
|---|---|---|

| TGEU Act, commencement, ss 6, 10, 68, 98–102, 130–131; Schedules 1–2 | [Official source](https://www.gibraltarlaws.gov.gi/uploads/legislations/treaty-on-gibraltar/2026-11/2026-11(15-07-26).pdf) | 2026-10-28 |

| Deductions Rules 2–6 | [Official source](https://www.gibraltarlaws.gov.gi/uploads/legislations/income-tax/2026s338/2026s338.pdf) | 2026-10-28 |

| HM Customs transit sections 2–4.2 | [Official source](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Transit%20GN.pdf) | 2026-10-28 |

| Treaty Articles 248 and 336 | [Official source](https://assets.publishing.service.gov.uk/media/6a56149a6d6d5c7e2845c8d1/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v1of2.pdf) | 2026-10-28 |

| Council register; read in normal browser after script HTTP 403 | [Official source](https://www.consilium.europa.eu/en/documents/treaties-agreements/agreement/?docLanguage=en&id=2026009) | 2026-10-28 |

| Official deduction-period explanation | [Official source](https://www.gibraltar.gov.gi/press-releases/minister-arias-vasquez-publishes-transaction-tax-deductions-rules-2026-6922026-12358) | 2026-10-28 |

| LN 2026/188: Annex 19 transit, special-procedure periods and discharge | [Official source](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-annex-19-regulations-2026-8553/download) | 2026-10-28 |

| LN 2026/211: Union-goods special-procedure law and replacements | [Official source](https://www.gibraltarlaws.gov.gi/legislations/tgeu-implementation-special-customs-procedures-concerning-union-goods-regulations-2026-8575/download) | 2026-10-28 |

| HM Customs Annex 19 special-procedure guidance | [Official source](https://www.gibraltar.gov.gi/uploads/_PressOffice/Treaty%20Customs%20Guidance/Annex%2019%20Special%20Customs%20Procedures%20GN%20FINAL.pdf) | 2026-10-28 |

| Imports and Exports Act: residual entry rules and offences | [Official source](https://www.gibraltarlaws.gov.gi/legislations/imports-and-exports-act-1986-423/download) | 2026-10-28 |

| EU Regulation 2023/2831: aid scope, aggregation and ceiling | [Official source](https://eur-lex.europa.eu/eli/reg/2023/2831/oj/eng) | 2026-10-28 |

| Treaty Volume II: Annexes 18 and 24 | [Official source](https://assets.publishing.service.gov.uk/media/6a56149a9e63154454413620/MS_9.2026_Agreement_Gibraltar_UK_EU_EAEC_v2of2.pdf) | 2026-10-28 |

**Not yet confirmed:** a deduction extension after 12 October 2026; actual aid grant-equivalent/currency/headroom and sector-specific treatment; incorporated commodity/traveller classifications and remaining transitional-stock conditions/boundaries; the exact one-/nine-month warehousing boundary wording; the separate section 102 export-refund form/deadline and operational receipts; application of all retained entry rules to each treaty movement; a numerical special-procedure arrears interest rate and any separate transaction-tax penalty. No live declaration, payment, approval or refund claim has been tested. Special-procedure debt remedies above do not resolve the separate export-refund route.

### Evidence and self-checks

- Retain the relevant source version, the applicable period and the facts establishing scope.
- Reconcile every input to the client's records; keep estimates separate from actual amounts.
- Recompute the example and boundary cases before applying the method.
- Record exclusions and unresolved points explicitly. Do not convert a missing source into an exemption.
- Deliver a calculation, evidence list, filing calendar and reviewer questions. Record the exact revision reviewed.

### Disclaimer

General tax and accounting reference material only. These drafts have not been professionally attested. A qualified professional in the relevant jurisdiction must check the facts, current law, elections and deadlines before anyone files, pays or acts on an output.

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## Talk to an accountant

Find the current Guide and professional-review status at [OpenAccountants](https://www.openaccountants.com).

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-11-01. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `gi-transaction-tax-transition` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/gi-transaction-tax-transition. If neither is available, confirm every figure against the official source pages cited above before relying on it.