# What is Corporate Income Tax (Guernsey)?

Country: Guernsey

Guernsey operates a 0% corporate income tax rate for the vast majority of companies. Standard trading companies pay zero corporation tax on profits. Only specific regulated sectors face a 10% rate: banking businesses, domestic insurance licensees, insurance managers/intermediaries, fiduciaries, and fund administrators. The 0% rate is one of Guernsey's primary commercial attractions and applies regardless of the company's level of profit.

## Current rate (Calendar year (1 January to 31 December) or company's accounting period)

0% standard; 10% for regulated financial services businesses

## Example

A Guernsey-registered tech company generating £500,000 net profit pays £0 in corporate income tax under the standard 0% rate. A Guernsey-licensed bank generating the same profit pays £50,000 (10%).

## How Corporate Income Tax (Guernsey) works in Guernsey

Guernsey's zero rate of corporate income tax has been in place since the Zero-10 tax regime was introduced in 2008. It applies to the overwhelming majority of companies incorporated and operating in Guernsey.

**The 0% rate applies to:**
- Trading companies of all types
- Holding companies
- Property investment companies (with some nuances on Guernsey land)
- Companies carrying on business outside Guernsey
- International business entities
- Exempt companies (subject to annual fee)

**The 10% rate applies to:**
- Banking businesses licensed under the Banking Supervision (Bailiwick of Guernsey) Law
- Domestic insurance licensees (Class 1, 2, 3 insurers writing domestic risks)
- Insurance managers, brokers and intermediaries
- Fiduciary licensees (trust companies, corporate service providers)
- Fund administrators and investment managers

**Income from Guernsey land and property**
Income arising from land and property situated in Guernsey is taxed at 20%, even for standard 0% companies. This is a critical exception: if your company owns or rents out Guernsey real estate, that income is taxed at the personal income tax rate.

**Economic substance requirements**
Since 2019, the 0% rate comes with conditions for companies earning certain types of income (intellectual property, finance and leasing, headquarters, holding company, distribution and service centre, shipping income). These companies must meet Guernsey's economic substance requirements: real management, adequate employees and expenditure, and core income-generating activities conducted in Guernsey. Failure results in penalties and potential referral to the OECD.

**Controlled Foreign Company rules**
Guernsey companies that are subsidiaries of UK companies may be subject to UK CFC rules, pulling Guernsey profits into the UK tax base. This is a UK-side issue, not a Guernsey one, but needs planning for UK-owned Guernsey structures.

**Filing the corporate tax return**
Every company incorporated in Guernsey must file an annual company tax return (ET1 or ET3 for certain companies) with the States of Guernsey Revenue Service, even if the liability is nil. The return is due by 30 November following the year of charge. Late filing attracts penalties starting at £300.

Source: https://www.gov.gg/article/1757/Companies

## Related terms

- [Exempt Company (Guernsey)](https://accounts-os.com/gg/glossary/exempt-company-gg)
- [Principal Company (Guernsey)](https://accounts-os.com/gg/glossary/principal-company-gg)
- [Economic Substance Requirements (Guernsey)](https://accounts-os.com/gg/glossary/substance-requirements-gg)
- [States of Guernsey Revenue Service](https://accounts-os.com/gg/glossary/states-revenue-service-gg)