Gibraltar has taken a proactive approach to regulating cryptocurrency. The government of Gibraltar introduced regulations governing the use of distributed ledger technology (DLT) in order to provide legal certainty to those operating within this framework, help with consumer confidence, and ensure that Gibraltar’s reputation and its financial sector is protected. Gibraltar has established a regulatory framework for cryptocurrency exchanges, and is striving to “transform Gibraltar into an international centre of excellence for business working with DLT and in the cryptospace.”
The Gibraltar Financial Services Commission (GFSC) is the regulator of the financial services market in Gibraltar and is responsible for regulating providers of such services that conduct business in Gibraltar and overseas. The GFSC must undertake this responsibility “in an effective and efficient manner in order to promote good business, protect the public from financial loss and enhance Gibraltar’s reputation as a quality financial centre.”
II. Tax Treatment of Block Rewards
Gibraltar currently does not have any taxation legislation or rules that apply specifically to cryptocurrencies. Gibraltar is a low-tax jurisdiction with a territorial tax system in which companies are only taxed on profits that accrue in, or derive from, Gibraltar. Tax legislation provides that any profits resulting from activities of a business that require a license and regulation under any law of Gibraltar are considered to derive from Gibraltar.
Gibraltar does not impose capital gains, dividends, value added, or withholding taxes, including with respect to cryptocurrency transactions. While Gibraltar does have an income tax, if the “badges of trade” test is not met with respect to the sale of any cryptoassets, the activity would be deemed noncommercial and would represent a capital gain rather than income, and thus no tax would be chargeable. Crypto exchanges are subject to the corporate income tax of 10% on any profits accrued in or derived from Gibraltar.
There appear to be no taxation laws or policies that apply specifically to the mining of cryptoassets in Gibraltar. The government has stated “Gibraltar does not regulate mining operations primarily due to the unattractiveness of operating a mining operation in Gibraltar due to the high power costs required for substantive mining hardware.”
B. Airdrops, Staking, Forging, and Forks
There appear to be no specific tax laws or policies in Gibraltar on airdrops, staking or forging for proof of stake cryptocurrencies, or forks in blockchains.
Prepared by Clare Feiket-Ahalt
Senior Foreign Legal Specialist
 Presentation, Siân Jones & Nicky Gomez, Gibraltar Financial Services Commission (GFSC), Gibraltar’s DLT Regulatory Framework: Turning the Vision into Reality 7 (Oct. 2017), https://perma.cc/4LSC-EAZ3.
 Income Tax Act 2010, § 11(1) and Sched. 1.
Last Updated: 02/05/2021