- Up to and including 2007, companies and individuals paid income tax at the rate of 20%. From 2008 onwards, whilst individuals continue to pay tax at 20%, there are three rates for companies, depending upon the source of income.
- Company Standard Rate - 0%.
- Company Intermediate Rate - 10% (income from banking business, domestic insurance business, fiduciary business, insurance intermediary business and insurance manager business, fund administration business and, with effect from 1 January 2016, extended to the provision of custody services by banks).
- Company Higher Rate - 20% (income from trading activities regulated by the Office of the Director General of Utility Regulation, income from the ownership of lands and buildings and, with effect from 1 January 2016, extended to the importation and/or supply of hydrocarbon oil or gas in Guernsey, and large retail business carried on in Guernsey where the company has a taxable profit of more than £500,000).
- Collective investment vehicles may apply for exempt status in Guernsey - please see "Exempt Bodies" section below for more information.
- Every company in Guernsey should complete an income tax return each year. The returns are available for completion in January with a deadline for submission of 30th November. To complete your return online please follow this link.
- Information on making a payment is available at Taxation FAQs.
- Statements of Practice are available by following this link.
Country by Country Reporting
- Further information is available on the Base Erosion and Profit Shifting (BEPS) & Country by Country Reporting (CbCR) page.
- Investment fund vehicles (companies, partnerships, unit trusts) may apply for exemption from tax in respect of income from sources outside Guernsey. Exempt bodies may also invest on a tax free basis in:
- a relevant Guernsey bank deposit;
- another body to which an exemption from tax has been granted;
- shares in a Guernsey company.
- The exempt fee is a flat annual fee of £1,200 (£600 to 31 December 2014).
- Who can apply for exemption?
- Collective investment vehicles ("CIV") - a body(company, partnership or unit trust) established to enable members of the public to participate in, or receive profits or income arising from, the acquisition, holding, management or disposal of the property/assets, or sums paid out of such profits or income.
- A body established in Guernsey or elsewhere solely for the purposes of -
- the management of a specific CIV,
- enabling investment into a specific CIV,
- the acquisition or the management of the assets of a specific CIV,
- facilitating the funding of, or borrowing by, a specific CIV for the acquisition of its assets.
- A body established for the purposes of undertaking collective investment in which the units are listed on an exchange or market approved by the Director of Income Tax.
- A company which is in the beneficial ownership (or which is a wholly owned subsidiary) of an exempt body may itself apply for exempt status. However, such a company would only be eligible for exemption to the extent that it does not have income taxable at the company intermediate rate or company higher rate.
- Conditions of exemption
- A person(s) resident in Guernsey, regulated by the Guernsey Financial Services Commission, provides support services (e.g. managerial, secretarial and custodial services) to the exempt body for remuneration calculated on an arm's length basis.
- That no investment or other property situated in Guernsey is held, other than a relevant bank deposit, an interest in another exempt body or shares in a Guernsey company.
- That the majority of shares/units are not in the beneficial ownership of Guernsey residents.
- That on making payment of a dividend or distribution, the unit trust/company provides a list of the names, addresses and gross amounts of any income distributions paid to Guernsey investors.
- Applying for exemption / renewing exemption
- If you wish to make a first application for exempt status, please complete this First application form [399kb] and submit it to the Income Tax Office with the exempt fee payment of £1,200 for each year for which exemption is required. Click here for details of how to make payment.
- If you wish to make a renewal exempt application for an existing exempt body, please complete this Renewal application form [276kb] and submit it to the Income Tax Office with the exempt fee payment of £1,200. Click here for details of how to make payment.
- First applications should be submitted:
- on or before 31st March in the year of charge in respect of which it is made, or
- if later, within three months of the date of registration of its constitutive documents, or
- in any other case, not later than three months after the first Board meeting of the body in Guernsey during the year of charge for which it is made.
- Renewal applications should be submitted by 31st March in the year that you wish to be exempt.
- List of Stock Exchanges/Markets approved by the Director of Income Tax:
- Any stock exchange registered in an OECD or EU Member country
- The International Stock Exchange Authority Limited (formerly the Channel Islands Securities Exchange)
- Hong Kong Stock Exchange
- Singapore Stock Exchange
- Please contact Nicky Forshaw or Lisa Edmonds on 724711 or firstname.lastname@example.org if you wish to discuss an exempt application for a body listed on an exchange/market that is not on the approved list.
- "Approved" is for tax purposes only and confers no other status on the exchange concerned. It does not constitute any form of recognition or approval for regulatory or other purposes nor does it provide any form of approval or recommendation of any of the investments which are listed or traded on that exchange.
Company residence tie-breaker - Guernsey-UK Double Tax Agreement
- On 30 November 2015, HM Revenue and Customs (HMRC) announced an agreement reached with Jersey about the interpretation of paragraph 2(1)(f) of the Jersey-UK Double Taxation Agreements (company residence tie-breaker). This view is also applies to paragraph 2(1)(g) of the Guernsey-UK Double Tax Agreement ("the DTA").
- In accordance with section 172(1) of the Income Tax (Guernsey) Law 1975 ("the Law") if the States "approves" a DTA then those arrangements have effect notwithstanding anything contained in the Law.
- We therefore confirm that following this change in interpretation of the DTA, where a company is prima facie resident in both the UK and Guernsey, it will be deemed (for the purposes of the DTA) only resident in the state where it is managed and controlled.
- By way of example, if a holding company is incorporated in Guernsey but managed and controlled in the UK, it will be deemed resident in accordance with the revised interpretation of the DTA. It will not be chargeable to tax in Guernsey, unless it had any Guernsey source income, other than Guernsey bank interest (because it is treated as not resident in Guernsey). The company would not be required to submit a Guernsey company tax return in relation to its own affairs.
- Similarly, a UK incorporated company owned by a company which is tax resident in Guernsey will be regarded as resident only in the UK where the management and control of the company is in the UK.
- Companies should report details of distributions made to a Guernsey Resident individual and remit the tax in respect of these distributions within fifteen days of the end of each relevant quarter.
- The company distribution reporter is available to download from here and companies are able to use this software to calculate the payment due on a quarterly basis.
- Follow this link to contact us if you would like more information or guidance.
- If you run a business in Guernsey you should register with us, please follow this link. You will be given a tax number and issued with an estimated assessment. A guide for new arrivals is available at www.gov.gg/tax and for information on starting up in business go to Starting up in business [316kb].
- Everyone running a business in Guernsey should complete an income tax return each year. The returns are available for completion in January with a deadline for submission of 30th November. To complete your return online please follow this link.
- Click here for details of how to make payment.
- Three Line Account (3LA) [329kb] is a simple way of providing details of your income and expenses from self-employment in a format that is acceptable to the Director of Income Tax and can be used:-
- if annual turnover is below £15,000 (see below for explanation of turnover), and
- if it is not the first year of your business, and
- if you do not want to claim annual allowances on capital expenditure.
- More information is available in the "Notes" tab of the 3LA spreadsheet.
- If you do not want, or are unable to use, the 3LA then full details of your income and expenses can be provided by using the Trading, Profit and Loss Account (TPLA) [100kb].
- Trading, Profit and Loss Account ("TPLA") is designed to help business owners who are sole traders, but who do not use the professional services of an accountant or firm of accountants to prepare tax returns and accounts. If the annual turnover of your business, however, is below £15000 and this is not the first year or the first accounting period of your business, you may choose instead to use the 3 Line account (form 3LA) [329kb]. More information on the TPLA is available in the "Notes" tab of the spreadsheet.
- If you are an employer you should deduct tax from your employees in accordance with their coding notice on each pay date. Details of the gross weekly or monthly wage and deductions made must be recorded and returned with the relevant remittance by the 15th of the month following the end of the relevant quarter.
- Further information is available in our Employers Guide Employers Guide to the ETI Scheme [1Mb].
- Please follow this link to submit your employers return. This software will enable you to calculate the payment due.
- Information on benefits in kind is available in our Benefits in Kind Explanatory Guide [550kb].
- Click here for details of how to make payment.
Clubs and Associations
- The Income Tax Law ("the Law") requires income tax returns to be completed by companies and individuals. As the Law defines a company as "any body of persons corporate or unincorporated, not being a partnership", clubs and associations are required to complete a company income tax return each year. The return should be accompanied by the accounts for the relevant year, and a tax computation showing the income chargeable to tax, if applicable.
- As clubs and associations are treated as companies under the Income Tax Law (a company is defined in this Law as "any body of persons corporate or unincorporated, not being a partnership") they would be subject to the standard (0%), intermediate (10%) or higher rate (20%) taxes applicable to companies.
- Clubs and associations are not taxed on income received from their members with the exception of rental income. Housing estate associations, for example, would not be liable to tax on monies collected from those who reside on the estate, sporting clubs would not be liable on subscriptions received from their players and if a club has a bar, where only members drink, they would not be liable to tax on their bar profits.
- Clubs and associations are taxable on income received from non-members, and this would include, amongst other things, bank interest. The bank interest would be taxable at the company standard rate (0%) and if a bar is open to non-members, the proportion of profits, relating to those non-members, would be taxable, but again this would be at the company standard rate.
- If clubs and associations receive income from a Guernsey property, and this would include "Terre a l'Amende" payments received, this would be taxable at the company higher rate (20%).