Managing Associate | Legal
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10 July 2023
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Guernsey remains a popular choice of jurisdiction for corporates, providing a stable government and a transparent legislative and tax system. This article looks at when companies are treated as tax resident in Guernsey and considers the tax rates applicable to them and whether they are eligible for tax exempt status.
A company will be treated as tax resident in Guernsey in respect of a year of charge if:
However, notwithstanding that a company is incorporated in Guernsey, a company will not be treated as resident in Guernsey in a year of charge if it is proved to the satisfaction of the Guersney Revenue Service that, in that year of charge the company:
Guernsey Companies will be subject to income tax in Guernsey at the company standard rate, which is currently zero per cent (0%), provided they do not carry out activities which are within the categories taxable at either the "intermediate rate" (10%) or the "higher rate" (20%).
The intermediate rate (10%) applies to certain regulated activities and includes the following:
Importantly, it should be noted that in relation to "investment management individual client services", this category of activity does not comprise provision of investment management services to a collective investment scheme. As such, income from fund management should remain subject to the 0% rate (unless tax exempt status has been granted, as referred to in more detail below).
The activities to which the higher rate (20%) applies include trading activities regulated by the Guernsey Competition and Regulatory Authority (ie electricity provision and telecommunications), deriving income from ownership of Guernsey situate real estate, gas and hydrocarbons business and large retail business.
In addition, certain categories of Guernsey company, which includes collective investment schemes and bodies established solely for the purposes of management of a specific collective investment scheme, are entitled to apply for tax exempt status pursuant to the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989.
For more information on Guernsey corporate taxation please contact Richard Doyle, Managing Associate, Guernsey.
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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