Guernsey, Channel Islands

Resident corporations are liable to tax on their worldwide income. Non-resident corporations are subject to Guernsey tax on their Guernsey-source income.

Companies pay income tax at the current standard rate of 0% on taxable income; however, income derived from certain businesses may be taxable at a 10% or 20% rate.

Income derived from the following business is taxable at 10%:

• Banking business.
• Domestic insurance business.
• Insurance intermediary business.
• Insurance management business.
• Custody services business.
• Licensed fund administration business.
• Regulated fiduciary activities.
• Regulated investment management services to individual clients (excluding collective investment schemes).
• Operating an investment exchange.
• Compliance and other related activities provided to regulated financial services businesses.
• Operating an aircraft registry.

'Banking business' is broadly defined as income that arises as a result of the provision of credit facilities by any type of company and the utilisation of customer deposits. Income derived from licensed fiduciaries (with regulated activities), licensed insurers (in respect of domestic business), licensed insurance intermediaries, and licensed insurance managers is also taxable at 10%.

Income derived from the exploitation of property located in Guernsey or received by a publicly regulated utility company is subject to tax at a higher rate of 20%. In addition, income from retail businesses carried on in Guernsey where taxable profits exceed 500,000 British pounds sterling (GBP) and income derived from the importation and/or supply of hydrocarbon oil and gas are also taxed at 20%.

Finally, income derived from the cultivation of cannabis plants and income from the use of those cultivated cannabis plants or parts of those cultivated cannabis plants or licensed production of controlled drugs is taxable at 20%.

Pillar Two

Guernsey has approved legislation to implement the OECD’s Pillar Two rules, effective 1 January 2025. Guernsey has implemented the Qualified Domestic Top-up Tax (DTT) and the Multinational Top-up Tax (MTT) for the Qualified Income Inclusion Rule, following the GloBE Model Rules with some modifications. Applying the rules and determining the impact are likely to be very complex and pose a number of practical challenges.

For registration and submission requirements, see the Tax administration section.

For more detailed information and the most recent updates, please visit PwC’s Pillar Two Country Tracker.

Exempt bodies

Certain collective investment schemes (CISs), unit trusts, and partnerships may qualify for exempt status, which will place them completely outside the Guernsey tax regime (though please note the Economic Substance Regulations in Guernsey may apply to certain bodies with exempt status). In addition, anybody that forms part of, or contributes to, the overall structure of a CIS may claim exempt status. This removes doubt in relation to the entities that are involved in the management or support of a CIS qualifying for exempt status. For each year for which exempt status is sought, a charge of GBP 1,600 is levied.

One of the following conditions, among others, must be met for the body to be considered exempt:

• The body is beneficially owned outside of Guernsey.
• No Guernsey-resident individual or company has a beneficial interest in the body (with the exception of shareholders, loan creditors, or nominees/trustees).

Loans to participators

If a company makes loans with preferential terms to an individual or entity connected with the company, this will be deemed to be income in the hands of the debtor, and the creditor company will be required to account for, withhold, and pay the tax. Certain exemptions apply.

Local income taxes

Guernsey does not operate any local government taxes.