As of the 2025/2026 tax year, Gibraltar does not apply Value Added Tax (VAT). Instead, it imposes an import duty on most imported goods, including motor vehicles. The general import duty rate is 12%, but this varies depending on the type of goods and their classification.
Import Duty Rates for Motor Vehicles
Gibraltar’s import duty rates for motor vehicles are as follows:
Petrol/Diesel Vehicles
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Up to 1,500cc: 25%
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1,501cc – 2,000cc: 30%
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Over 2,000cc: 35%
Hybrid Vehicles
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Full Hybrid/Plug-in Hybrid Electric Vehicles (PHEVs): 5%
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Mild Hybrid Vehicles: 10%
Electric Vehicles
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Full Electric Vehicles: 0%
These rates apply to both new and used vehicles imported by private individuals. It’s important to note that these rates are subject to change, and it’s advisable to consult the latest information from Gibraltar’s HM Customs or a tax professional before making any import decisions.
Special Considerations
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Temporary Imports: Visitors may import their car into Gibraltar without payment of duty provided they are not residents, intend only to stay temporarily, and will take the vehicle with them when they leave.
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Electric Vehicle Incentives: Gibraltar has introduced incentives for electric vehicles, including a £2,500 cashback for full electric vehicles and a £250 cashback for hybrid vehicles, effective from 1 July 2025.
Upcoming Changes
Gibraltar has agreed to introduce a “transaction tax” on goods, starting at 15% and increasing by 1% annually to reach 17% by 2027. This tax is part of a post-Brexit agreement with Spain and aims to align Gibraltar’s tax policies with the EU to prevent unfair competition.
While this transaction tax will apply to most goods, including vehicles, the specific rates and exemptions for motor vehicles under this new tax regime have not yet been fully detailed. It’s advisable to monitor official announcements from Gibraltar’s government for updates on this matter.
For the most current information on import duties and taxes in Gibraltar, please refer to the official HM Customs website or consult with a tax professional.