Guernsey: Offshore Legal and Tax Regimes
Tax Treatment of Offshore Operations
See Domestic Corporate Taxation for the general principles of Guernsey corporate taxation, which also apply to offshore entities except as indicated below.
Offshore Guernsey entities are taxed as follows:
- Non-Resident Foreign Companies (ie those not managed and controlled from Guernsey) will be charged with income tax at 20% only on income from Guernsey sources (other than bank interest, by concession); a Guernsey registered company cannot be non-resident - it is either resident or it is exempt or it is an International Body.
- Exempt Private Limited Companies (Category D Bodies) pay a fee of GBP600 along with their annual application for exemption and also a fee of GBP100 payable when dealing with an Application for Exempt Status and filing the Annual Return (in duplicate). Generally they do not trade locally, but will pay income tax at 20% on local income if there is any (except bank interest, by concession).
- Exempt Investment Schemes (Category A, B or C Bodies) pay a fee of £600 along with their annual application for exemption. Income tax at 20% is deducted from dividends paid to Guernsey investors, but there is no deduction from dividends paid to non-residents.
- Exempt Insurers (Category E Bodies) pay a fee of GBP3,380 along with their annual application for exemption. Generally they do not trade locally, but will pay income tax at 20% on local income if there is any (except bank interest, by concession). Cells of Protected Cell Companies pay GBP1,100. Insurance managers pay according to the number of companies managed, from GBP3,000 for 1 - 10 companies, up to GBP10,000 for over 100 companies.
- International Bodies (Companies or Partnerships) negotiate a rate of tax between nil and 30% (typically 2%) to be paid on their international income. An application is made to the Income Tax Authority, which considers eligibility, the nature of trading activities conducted, and the economic interests of Guernsey before issuing a certificate of International Tax Status, which is usually valid for 5 years at the specified rate. The intention is to help companies, particularly investment companies, conform to minimum tax requirements imposed by other jurisdictions.
- Branches are subject to tax (income tax at 20%) only on income from Guernsey sources (other than bank interest, by concession).
- Trusts with non-resident beneficiaries are taxed only on Guernsey-sourced income (other than bank interest, by concession), and the assessment is made on the trustee.
- Trust management (Fiduciary) companies pay an application fee of GBP1,071 plus GBP107 for each entity managed; Personal Fiduciary Licences cost GBP536. Annual fees depend on the volume of trust business managed: GBP2,678 for up to GBP250,000; GBP5,356 for up to GBP1m; GBP13,000 for up to GBP2m; GBP15,080 thereafter.
- Trust management (Fiduciary) companies pay an application fee of GBP1,125 plus GBP112.50 for each entity managed; Personal Fiduciary Licences cost GBP565. Annual fees depend on the volume of trust business managed: GBP2,810 for up to GBP250,000; GBP5,615 for up to GBP1m; GBP13,625 for up to GBP2m; GBP15,805 thereafter.
- Non-resident partners in a Guernsey partnership or Limited Partnership are liable for tax only on Guernsey-derived income (with the usual concessions regarding bank interest), and then as individuals (see Personal Taxation).