The tax year runs from 1 January to 31 December, although companies can adopt a year-end of their choice.
It is compulsory for all Guernsey companies to file their tax returns online.
The format of the Guernsey income tax return will be altered in respect of the accounting periods commencing on or after 1 January 2019 to allow the incorporation of the Economic Substance Regulations.
Companies will be required to disclose where they are captured by the Regulations, in what capacity, and make several declarations as to whether and how they meet the substance requirements.
Companies are required to file their income tax return on 30 November following the calendar year in which the accounting period ends. Should a company meet the conditions below, a simplified return may be filed without either a computation or financial statements.
In order to qualify for a simplified return, a company must have none of the following:
- Guernsey employees (other than directors).
- Guernsey-resident individual beneficial owners.
- Income from utilities (e.g. Guernsey water or electricity companies).
- Income from Guernsey properties.
- Income from a banking business.
- Income from domestic insurance business.
- Income from a licensed fund administration business providing administration services to unconnected third parties.
- Income from the provision of custody services.
- Income from the provision of regulated investment management services to individual clients.
- Income from operating an investment exchange.
- Income from compliance and other related activities provided to regulated financial services businesses.
- Income from the importation/supply of hydrocarbon oil and gas.
- Income from a retail business where the profits are above GBP 500,000.
- Loans to Guernsey participators.
- Distributions made to Guernsey-resident individuals.
Should a company have Guernsey-resident individual beneficial members and/or make loans to participators, it will be required to submit quarterly returns accounting for distributions and loans advanced.
Payment of tax
In Guernsey, tax is payable in two instalments, on 30 June and 31 December in the year of charge (calendar year). If liabilities have not been determined, this may necessitate initially raising estimated assessments based on prior year figures and raising a final assessment when the figures are agreed. Once the Income Tax Office has received the company’s income tax return, they will issue an assessment detailing the final balancing income tax payment due. This amount will be due to be paid within 30 days of the issuing of the final assessment.
Tax audit process
The Income Tax Office will assess each company tax return as and when it is received, and the turnaround time from submission of a return to the issue of a final assessment varies dependent upon the workloads of the Income Tax Office but is generally dealt with in around three months.
Statute of limitations
The Director can raise an assessment in respect of any income that has not been assessed at any time no later than six years after the end of the year of charge in which the income arose.
Topics of focus for tax authorities
The revised Guernsey income tax returns will incorporate the Economic Substance Regulations for the first time for accounting periods beginning on or after 1 January 2019.