Guernsey Company Tax Residence

There have been dramatic changes to the previously long standing Guernsey definition to determine which companies are considered Guernsey tax resident from January 2019.

Up until that time any company will be treated as tax resident in Guernsey if:

(a) It has not been granted exemption from tax;

(b) It has to be recognised this has been an unusual set of criteria when compared to many other tax jurisdictions which had included the more traditional concept of management and control; or

(c) it is incorporated in Guernsey and has not been granted tax exempt status in Guernsey.

This then included any company incorporated outside of Guernsey but owned by Guernsey residents. Often this meant such companies were dual tax resident, in their country of incorporation or management and control, as well as Guernsey.

The change which came into effect on 1 January 2019 was for Guernsey to include such a management and control test as an additional determining factor as to whether a company is or is not tax resident in Guernsey. It thus extended the above to add:

(d) it is centrally managed and controlled in Guernsey in that year of charge.
Management and control for these purposes is based on the long established case law principals and tends to look at where the Board of the company meet and how it controls affairs.