Guernsey, Channel Islands

Corporate - Group taxation

Last reviewed - 20 December 2023

Group loss relief may be claimed when both companies are members of the same group and the companies are either carrying on business in Guernsey through a PE or incorporated in Guernsey. Loss relief is available only against income taxed at the same rate.

A claim for group loss relief must be made by the claimant company within two years after the end of the calendar year in which the relevant accounting period ended, and the claim must be accompanied by a declaration by the surrendering company that it consents to the surrender.

Transfer pricing

Guernsey does not currently have specific transfer pricing legislation in place. However, the general anti-avoidance provisions do apply.

Country-by-country reporting (CbCR)

Guernsey has formally committed to the OECD model of CbCR and has already put in place the relevant implementing regulations for entities with accounting periods commencing on or after 1 January 2016. In addition, Guernsey has signed up to the Multilateral Competent Authority Agreement (MCAA) to assist with the sharing of relevant information in relation to CbCR, as well as broadly adopting the OECD’s CbCR implementation package, to facilitate its implementation of this BEPS minimum standard.

Multinationals having global revenues of EUR 750 million or more are required to file annual reports to tax authorities at three levels. The first element (which taxpayers are generally required to provide for fiscal 2016) is a ‘country-by-country report’ that gives a detailed picture of business results for each country where the business operates (including things like number of employees, revenues, pre-tax profit, and taxes paid). Companies will also need to give an overall picture of their global business, aggregating data from all of the countries where one operates. In addition, companies will be required to report separately to each country where they operate with business and tax information about the local entities and operations in that country.

The disclosure of this business information will be accessible, through automatic information exchanges, to tax authorities wherever they have a presence (subject to certain conditions). Groups will need to consider how to explain their operational purpose of business arrangements, which may include tax advantages.

The deadline for submission of the CbCR report to the Guernsey tax authority is within 12 months of the end of the accounting period to which it relates.

Where there is no reporting obligation, there is a requirement to notify the Director of Revenue Service of the name of the entity that is undertaking the reporting and to provide certain other information. An entity must notify the Director by 30 November in the year following the last day of the accounting period if it is a constituent entity.

Thin capitalisation

Guernsey does not currently have specific thin capitalisation legislation in place. However, the general anti-avoidance provisions do apply.

Controlled foreign companies (CFCs)

Guernsey does not currently have specific anti-avoidance legislation in relation to CFCs. However, the general anti-avoidance provisions do apply.