AN update in tax law will make sure insurance and DLT blockchain businesses based in Gibraltar ‘contribute fairly to the nation’s well-being’, the government said.

With record high interest rates creating more profits than ever for insurance companies, the government said it considers this ‘a logical and progressive step’.

The modernising of the legislation is being achieved by an amendment to Tax Act 2010.

It considers what the government called the ‘new technologies and evolving practices of existing financial services industries’.

Man Searches An Insurance Online

Banks and money lenders are ‘already within scope of the existing tax provision’, the government said.

Now it was the turn of insurance and Distributed Ledger Technology (DLT) firms to give more to the public purse.

“The amendment also provides sufficient anti-avoidance measures to mitigate against abuse and possible exploitation,” the government said in a statement.

It will ‘ensure that in-scope taxpayer DLT firms and insurance companies do not circumvent their tax obligations’, it added.

“Distributed ledger technology (DLT) is a digital system that allows multiple parties to share and update a common database in a decentralised way, without relying on a trusted third party,” according to DLT science. ?

Gibraltar’s ‘highly regarded’ financial regulation and ‘low’ corporate tax rate of 12.5% has led to about 60 insurance companies setting up shop on the Rock.

The changes come at a time when the public administration is cutting corners to fund the Covid pandemic measures and possible future Brexit changes.

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