The Impact of COVID-19 on Tax Residency in Gibraltar

09/04/2020 Emma Lejeune, Stuart Dalmedo


A company will be considered resident for tax purposes in Gibraltar if the management and control of its business are exercised from Gibraltar. Whilst management and control has not been judicially defined, based on established legal principles laid down in the United Kingdom (which, although not binding, would be highly persuasive in Gibraltar), management and control is the place of the highest form of control and direction over a company’s affairs. Usually, but not always, this will be where the board of directors meets and decisions relating to the business are made. The emphasis on proper management and control (and appropriate substance) is paramount in many jurisdictions and many companies have provisions entrenched in their constitution to ensure that the relevant requirements relating to proper management and control are met. This often includes ensuring that meetings are held and/ or chaired from the jurisdiction of residence of the company by locally based directors, with international members of the board flying in for the same.

However, the recent COVID -19 outbreak has resulted in the lockdown of many jurisdictions, as well as worldwide travel bans, making it difficult for board members to mobilise for business purposes. Below, we explore the potential consequences for companies in respect of which the board of directors (if located outside Gibraltar) are unable to fly out for board meetings in Gibraltar due to the travel restrictions imposed as a result of the COVID-19 outbreak.

The articles of association of a company set out the rules for running a company, including rules for conducting board meetings. Articles of association could allow for board meetings to be conducted via telephone or similar communications equipment (e.g. Zoom or Skype). This could allow the company secretary, based in Gibraltar, to host the board meeting in Gibraltar and allow for the directors to dial in.

Alternatively, and if it is so provided in the articles of association, written resolutions allow for board decisions to be made without having to hold a board meeting, provided that it is signed by every director. Where a resolution is being signed from various locations, a counterparts clause should be included, allowing for that document to be signed electronically in various counterparts.

It will be important to document and retain any evidence as to why a board meeting has not taken place in Gibraltar (or why the directors have only dialled in), and that these measures are only temporary due to the current worldwide travel restrictions and other legal impediments imposed by the relevant authorities as a result of the lockdown.


An individual will be considered resident for tax purposes in Gibraltar if:

  1. They are present in Gibraltar for a period of, or periods together amounting to, at least 183 days; or
  1. They are present in Gibraltar in any year of assessment which is one of three consecutive years in which the total of the days on which the individual is present in Gibraltar exceeds 300.

Many individuals will carefully plan their travel arrangements to ensure that they are in Gibraltar for enough days to satisfy the above test, but more importantly to ensure that they are not present in another jurisdiction for a specific number of days so as not to trigger the residency criteria of that jurisdiction. Just because an individual is resident in Gibraltar for tax purposes does not mean that they are not resident for tax purposes in another jurisdiction, as tax residency is determined having regard to the tax rules applicable in each jurisdiction. For example, in Spain, an individual could be resident for tax purposes if they are present in Spain for more than 183 days a year.

In the UK, they apply a statutory residency test, which takes into account the number of days spent in the UK, and where relevant, work in the UK, and the connections you have with the UK. However, what happens if a Gibraltar tax resident individual is stranded outside of Gibraltar and is unable to fly back to Gibraltar due to the travel restrictions imposed as a result of the COVID-19 outbreak?

Helpfully, the UK tax position for some individuals staying longer in the UK may not automatically trigger the statutory residence test. Under the statutory residency test, certain amount of time spent in the UK can be disregarded if it is due to exceptional circumstances. HMRC has published guidance on when an individual’s presence in the UK because of the COVID-19 outbreak will be considered to be the result of ‘exceptional circumstances’


Whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each case. However, as per HMRC’s guidance, if you:

  • Are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus;
  • Find yourself advised by official Government advice not to travel from the UK as a result of the virus;
  • Are unable to leave the UK as a result of the closure of international borders; or
  • Are asked by your employer to return to the UK temporarily as a result of the virus.

These circumstances are considered as exceptional.

Similarly, the French tax authorities have just issued a statement indicating that presence in France because of the COVID-19 outbreak will be considered as exceptional circumstances.


As a result, days spent in France as a result of exceptional circumstances would also be disregarded when calculating the number of days spent in France to determine French tax residency.

Whilst it is uncertain as to what measures (if any) the Gibraltar tax authorities will take as regards to a possible day count disruption to one’s residency, it will be important to document and retain any evidence as to why an individual was unable to return to Gibraltar due to the current travel restrictions and any other applicable restrictions that may be imposed by the jurisdiction related to the COVID-19 lockdown.


If you do have any concerns as regards your circumstances, or whether this could affect your company, please contact :

Emma Lejeune on or

Stuart Dalmedo on

Disclaimer: Please note that the information and any commentary on the law or otherwise contained in this article is only intended as a general statement and is provided for information purposes and not for the purposes of providing legal advice. No action should be taken in reliance on it without specific legal advice. Every reasonable effort is made to make the information and commentary accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequence of relying on it, is assumed by the author and/or ISOLAS LLP.

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