Gibraltar: bookkeeping and tax records

Scope and obligation

Section 63 applies to a person required to deliver a return under Income Tax Act section 28 or 29. Keep the records needed to make a full and complete return and preserve them for the statutory period. The duty is not limited to companies, and outsourcing bookkeeping does not change the person on whom this section imposes the duty. This Guide addresses that general duty; it does not settle specialised payroll, customs, transaction-tax, regulated-sector or anti-money-laundering record rules. Income Tax Act, section 63(1).

What the books and supporting file must contain

Section 63(5)–(8) covers the following evidence:

Record	Statutory requirement
Cash book	Day-to-day entries of all cash received and paid.
Stock	Statements of annual stocktaking.
Goods sold and purchased	Sufficient detail to identify the goods, buyers and sellers.
Underlying transactions	Contracts, invoices and other documents significant to the trade, business, profession or vocation.
Supporting documents	Preserve the relevant accounts, books, deeds, contracts, vouchers and receipts.
Language	Books of account kept for this section must be in English.

The examples do not limit section 63(1)'s broader requirement to support a complete return. A year-end total without its underlying evidence is not an adequate substitute for the prescribed transaction records. Income Tax Act, section 63.

The language rule is expressly about books of account. This Guide does not infer a universal certified-translation requirement for every foreign-language receipt, or permission to discard an original document after translating it. Establish any additional translation requirement for a particular request separately.

Retention clock and enquiry exceptions

The ordinary tax retention period is six years from the end of the period for which the return is required. It does not start on the purchase date, return filing date or accountant's handover date. Income Tax Act, section 63(2).

If notice requiring a return is given before that six-year period ends, retain records until the later date on which the enquiry is completed or, where there is no enquiry, the Commissioner's power to enquire ends. If such notice arrives after the six years and relevant records are still held, section 63(4) requires their preservation until the corresponding enquiry endpoint. Do not assume that the ordinary six-year date overrides a live statutory preservation duty. Income Tax Act, section 63(3)–(4).

Example: for a required return covering the period ending 31 December 2025, the ordinary six-year period runs through 31 December 2031. Filing in September 2026 does not move that starting point. If section 63(3) applies and the enquiry completes on 15 March 2033, that later endpoint governs the records covered by the provision. This is a retention example, not an instruction to delete records on either date; check other applicable obligations and holds.

Additional company-law duties

Companies Act section 239 separately requires proper books for five years, recording receipts and expenditure, sales and purchases of goods and services, and assets and liabilities. The books belong at the registered office or another place selected by the directors and must be available for their inspection. A company subject to the six-year tax rule cannot use the shorter company-law period to justify ending tax retention. Companies Act, section 239.

Bookkeeping, preparing annual accounts and filing accounts are separate tasks. See the company accounts and reporting Guide for the accounting basis, signatures, reporting dates and unresolved audit-exemption cross-reference.

Practical monthly and year-end controls

The following is a suggested working method for satisfying the evidence duties, not a statutory monthly filing requirement:

1. Reconcile each bank, cash and payment-processor account to the ledger. Identify outstanding deposits, unpresented payments and unexplained differences.
2. Match sales and purchases to invoices, credits and settlements. Track amounts still receivable or payable rather than treating every bank movement as income or expense.
3. Keep financing and owner transactions distinct from trading receipts. For an unexplained receipt, obtain evidence before choosing the accounting treatment.
4. Retain the year-end stocktake, quantity and valuation workings; reconcile movements and investigate differences.
5. Tie payroll, asset purchases and disposals to their supporting schedules. Prepare a separate bridge from accounting profit to the tax return rather than assuming all booked expenses are deductible.
6. Export the books and supporting index in a usable format, retain backups and confirm the director or responsible person can retrieve them after a provider change.

Control example: if a bank balance is £12,400 and the ledger balance is £12,000, the £400 difference needs identified reconciling items and evidence. Posting £400 to miscellaneous income solely to make the balances agree is not a substantiated accounting conclusion.

For each return period, maintain a retention register recording period-end, the six-year date, any notices and enquiry status, storage location, custodian and other retention requirements. Archive the submitted return with the working papers that explain its figures. Use the corporate tax Guide for the distinct return and accounts-attachment rules.

Consequences and review boundaries

Section 63A provides a penalty up to level 5 on the standard scale for failure to comply, with appeal to the Magistrates' Court. This draft does not convert that level into a monetary figure without checking the current standard scale. Income Tax Act, section 63A.

Independent source review and professional attestation are pending. Acceptance of particular electronic substitutes for original documents, sector-specific retention, transaction-tax records and the detailed handling of inspection notices require separate verification. This bookkeeping Guide does not establish complete Gibraltar compliance coverage.