Guernsey, Channel Islands
Value-added tax (VAT)
Guernsey does not operate a VAT or goods and service tax (GST).
Customs and excise duties
In accordance with the European Community (EC) Customs Code and the Implementing Regulation, Customs Import Duty is liable on all goods arriving in the Customs territory of the Community. The rates of duty are set by the European Community and are the same in all countries of the European Community.
The rates vary according to the commodity. Some may be as high as 22%, while, for other goods, the rate may be free.
The Channel Islands are not within the fiscal territory of the European Union, and, as such, the Community Regulations that concern excise duties do not apply. Excise duty is classed as an internal tax.
The rates are reviewed annually by the States of Guernsey and set at budget time, which is usually in November. These cover Guernsey and Alderney, while Sark has its own rates set by the Chief Pleas.
An additional 15% rate of duty is applicable on some goods originating in the United States (US).
Income from Guernsey land and buildings is subject to Guernsey income tax at 20%. No other property taxes apply.
Guernsey does not levy transfer taxes.
Document duty is payable in respect of ‘chargeable transactions’ of real property in Guernsey.
Document duty is paid on a graduated-rates basis and ranges from 2.25% to 5.5%. This is applied depending on the value of transfers in interests in Guernsey property conveyed and on the registration of bonds securing loans on real property.
For 2023, a down-sizing incentive has been introduced to charge 0% document duty on the first GBP 400,000 of a replacement principal private residence, subject to meeting certain conditions. This is expected to end on 31 December 2024.
In addition, an additional document duty of 2% on each bank will be charged on all residential properties that are not the principal private residence of the purchaser or a family member.
Document duty may also apply in respect of the transfer of shares in which the underlying company holds Guernsey situs real property.
Document duty is payable by the purchaser of the real property.
There are several exemptions available for certain categories of transactions. Please contact a member of the PwC Guernsey Tax Team for further advice.
Guernsey does not levy any stamp duties.
The Employee Tax Instalment (ETI) Scheme is a scheme whereby the employer deducts income tax from its employees and pays this over to the Guernsey Income Tax Office.
The ETI Scheme applies to all employees. For the purposes of the ETI scheme, an employee is an individual holding or exercising an office or employment, including a company director, part-time workers, casual workers, and sub-contractors.
The ETI Scheme operates on a quarterly basis. Throughout each quarter, the employer should deduct tax from their employees on each payday. Details of the gross weekly or monthly wage and deductions made must be recorded and returned with the relevant remittance by the 15th day of the month following the end of the relevant quarter (e.g. tax deducted during the first quarter needs to be submitted by 15 April).
Social security contributions
An employer, for the purposes of Social Insurance, is anyone who has employees. An employee is anyone who is gainfully occupied in employment under a contract of service in Guernsey or Alderney.
In general, contributions are required from both employer and employee in respect of any employed person who is over school-leaving age and under 65. Social security contributions are levied on the gross employment income of the employee at 6.8% for the employer and 7.0% for the employees from 1 January 2023.
Employer social security contributions for 2023 are calculated on a monthly lower earnings limit of GBP 706.33, which is the level of earnings at which an employer becomes liable for the payment of contributions. The upper limit for 2023, which is the highest level of earnings on which contributions are calculated, is GBP 14,040 per month.