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Consultation on the introduction of substance requirements for Companies tax resident in Guernsey

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The Policy and Resources Committee ("PRC") is seeking feedback and comments on the outline proposals contained within this consultation.

The proposals relate to the introduction of legislation which will require companies tax resident in Guernsey, undertaking specific income generating activities, to demonstrate that they have sufficient substance in Guernsey.

Relevant activities include:

The substance requirements vary for each key activity to reflect the different needs of the companies involved. They are designed to be fair and proportionate while ensuring that there are sufficient activities undertaken in Guernsey to reflect the amount of profits accounted here.

The proposed new requirements follow the screening of a large number of non-EU jurisdictions undertaken by the European Commission Code of Conduct Group in 2017 to assess standards of tax transparency, fair taxation and compliance with measures to prevent base erosion and profit shifting. Guernsey and the other Crown Dependencies were re-affirmed as co-operative jurisdictions in December 2017, but the European Commission highlighted concerns about the ability of the Crown Dependencies to demonstrate that the companies tax resident in their jurisdictions operated with sufficient substance to justify access to the Islands' corporate tax regimes.

Guernsey and the other Crown Dependencies made a commitment to the European Commission to address these concerns in November 2017. The three jurisdictions have worked closely together to develop proposals which will enable them to meet this commitment by 31 December 2018. These proposals will require companies that are tax resident in Guernsey and engaged in key activities identified by the EU to demonstrate that they meet minimum substance requirements as part of their annual tax return.

This consultation sought to get feedback on the outline proposals to inform drafting of the relevant laws and allow government to ensure a smooth transition for companies carrying on relevant activities.

This consultation closed on Friday 31st August 2018, the results will be published on this page during November 2018. If you would like any further information please contact us on email: eoi@gov.gg or phone: 01481 717168.

 

Closed: Friday 31st August

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