Guernsey: Domestic Corporate Taxion
Scope of Income Tax
Guernsey income tax is based on the Income Tax (Guernsey) Law 1975 as amended. The States Income Tax Authority (a permanent committee) controls income tax, through the Administrator, who assesses and collects tax. Appeals on income tax matters are heard by the Guernsey Tax Tribunal. Until 1990, corporation tax (which amounted to an annual fixed charge) was payable by limited liability companies registered in but not managed and controlled from Guernsey. Such companies were still liable to Guernsey income tax on income from Guernsey sources. The tax was abolished after exempt status was introduced for companies in 1989. Income tax is now payable by all companies resident in Guernsey or Alderney on income arising from 'business' widely defined but excluding income chargeable to Dwellings Profits Tax :
- Resident 'income tax' companies pay full income tax on their world-wide income
- Foreign companies controlled by individuals resident but not principally resident in Guernsey pay income tax only on Guernsey source income (excluding bank interest)
- International Companies pay income tax at the specified (negotiated) rate on their world-wide income
- Exempt companies pay full income tax on their income arising in Guernsey (excluding bank interest)
- Guernsey branches of foreign corporations pay full income tax on income arising in Jersey if they are managed and controlled outside the island; otherwise they are treated as Guernsey-resident 'income tax' companies.