Guernsey, Channel Islands

Taxable period

The tax year runs from 1 January to 31 December, although companies can adopt a year-end of their choice.

Investment companies are now required to compute their income and file their tax returns on a calendar year basis and not accounting year-end basis.

Tax returns

The Guernsey Revenue Service has decided to initiate steps to reinstate the original annual filing deadline of 30 November as follows:

• Year of charge 2023: 31 January 2025
• Year of charge 2024: 30 November 2025
• Year of charge 2025 onwards: 30 November

It is compulsory for all Guernsey companies to file their tax returns online.

The format of the Guernsey income tax return was altered in respect of the accounting periods commencing on or after 1 January 2019 to allow the incorporation of the Economic Substance Regulations. 

Companies are 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.

Should a company meet the conditions below, a simplified return may be filed without a computation. 

In order to qualify for a simplified return, a company must have none of the following:

• Guernsey employees (other than Directors).
• Guernsey resident beneficial owners.
• Income from utilities (e.g. Guernsey water or electricity companies).
• Income from Guernsey properties.
• Income generated from the licensed cultivation of cannabis plants, including income from the use of those plants for the production of products such as hemp, supplements, and cannabidiol.
• Income from the licensed production of controlled drugs and their licensed usage.
• Income from banking business (with the exception of bank interest), regulated fiduciary activity, licensed insurance business (with respect to domestic insurance business), provision of fund administration services to unconnected third parties, investment management services, licensed insurance intermediary business, licensed insurance manager business, operating an investment exchange under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, compliance and other related activities provided to regulated financial services businesses, or the activity of operating an aircraft registration service within the Bailiwick.
• Loans to Guernsey participators.
• Made a request under Section 62AB (1) of the Income Tax (Guernsey) Law, 1975 in relation to treating dividends received by the company as belonging to the company and not deemed to the beneficial members (individual shareholders) for tax purposes.

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.

Partnerships have an annual filing requirement along with submission of financial statements.

Payment of tax

The Guernsey Revenue Service issues interim assessments with tax payable in four instalments due by the 15th day after the end of the relevant quarter in the year of charge (i.e. 15 April, 15 July, 15 October, and 15 January). 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 Revenue Service 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 Revenue Service 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 Revenue Service 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

Guernsey passed regulations requiring certain legal entities carrying on relevant activities to demonstrate the existence of adequate economic substance on the Island. The legislation came into force on 1 January 2019 and for partnerships from 1 January 2022 (though partnerships that were established on or after 1 July 2021 are in scope from the date of establishment). The Regulations require companies and partnerships that are tax resident and carry on relevant activities in Guernsey to demonstrate that they each have a substantive presence in Guernsey commensurate with their level of activities in Guernsey.