Guernsey ‘stronger’ as updated economic substance guidance is published

27 November 2019

Guernsey’s position as a jurisdiction of economic substance has again been reinforced by the publication of updated guidance by the island’s tax authorities.  

Guernsey was placed on the whitelist at the earliest opportunity in the process in March 2019.  

All Guernsey tax-resident companies need to confirm that they meet updated substance requirements, in line with directives from the EU Code of Conduct Group, demonstrating that profits generated by companies falling within the scope of the requirements are commensurate with their economic activities and presence in Guernsey.  

Among the requirements to be demonstrated include that companies are “directed and managed” in Guernsey in relation to the substance activity; have adequate employees, expenditure in the island and physical presence; and that core income-generating activities (CIGA) undertaken are carried out in Guernsey.  

The Guernsey guidance was published jointly alongside guidance from fellow Crown Dependencies Jersey and the Isle of Man. It updated original guidance from April 2019. It expands previous guidance to now cover insurance, intellectual property and shipping, and updates advice previously given for some other sectors.  

Dr Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance, said: “As we have said many times, Guernsey emerges from this process stronger and more competitively placed for financial services business.  

“Over the past few years economic substance has emerged as a key industry issue, and firms and fund managers today should look to jurisdictions that can and have met these new global standards.  

“Guernsey has always had genuine substance in financial services. Our whitelisted position genuinely sets us apart from other jurisdictions which have not met this criteria, and we will continue to build on this position of strength.”

See published updated guidance here.

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