What is GST / VAT in Guernsey?
Guernsey has NO goods and services tax (GST) and NO value added tax (VAT). Unlike the UK, EU, Australia, and most other jurisdictions, Guernsey does not levy any general consumption tax. Businesses operating in Guernsey do not charge VAT on their sales, cannot recover input VAT, and have no VAT registration or filing obligations. This is a major commercial differentiator for Guernsey-based businesses and a key attraction for international structures.
Current Rate (N/A)
0% — there is no GST or VAT in Guernsey
Example
A Guernsey-registered software company invoices a client for £10,000 of services. The invoice shows £10,000 total — no VAT line, no GST charge. The client pays £10,000. The Guernsey company keeps £10,000 with no tax to remit to the government on this transaction.
How GST / VAT in Guernsey works in Guernsey
The absence of VAT or GST in Guernsey is a deliberate policy choice that distinguishes the island from its nearest neighbours and most global trading jurisdictions.
**Why does this matter for businesses?**
**1. No VAT compliance burden** Businesses based in Guernsey have no VAT registration requirement, no quarterly VAT returns, no input tax recovery system, and no VAT invoicing rules. This eliminates a significant compliance overhead.
**2. No cascading tax cost** Pure B2B service businesses that sell to non-Guernsey clients bear no hidden VAT cost in their supply chain that cannot be recovered. There is no reverse-charge mechanism for Guernsey businesses receiving foreign services.
**3. E-commerce and low-value imports (historical context)** Guernsey was historically a major hub for low-value goods exported to the UK, exploiting the 'Low Value Consignment Relief' (LVCR) VAT exemption. The UK closed this loophole in 2012. Since then, Guernsey has not attempted to introduce domestic GST/VAT, instead positioning itself as a zero-consumption-tax jurisdiction.
**Important distinction: UK VAT still applies in some cases** If a Guernsey company is also VAT-registered in the UK (because it makes taxable supplies in the UK), it will have UK VAT obligations on those UK supplies. But the Guernsey entity itself does not have UK VAT status by virtue of Guernsey incorporation alone.
**SEO note: searches for 'Guernsey VAT' are common** Many searchers query whether Guernsey has VAT. The answer is unambiguously no — Guernsey is outside the UK and EU VAT areas and has not introduced its own equivalent.
**Channel Islands VAT position** Both Guernsey and Jersey are Crown Dependencies outside the UK and EU VAT areas. Neither has a domestic VAT or GST. This is distinct from the Isle of Man, which is inside the UK VAT area and applies UK VAT.
**Is Guernsey likely to introduce VAT?** The States of Guernsey has periodically considered introducing some form of consumption tax, but as of 2025 there are no active proposals to do so. The zero-tax-on-consumption status remains a core element of Guernsey's economic model.
Related terms
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.
The States of Guernsey Revenue Service (commonly called the Revenue Service or the States Revenue Service) is the government body responsible for administering income tax, document duty, and social insurance contributions in Guernsey. It is the equivalent of HMRC in the UK or the IRS in the US. It issues assessments, collects payments, and enforces compliance.
Document Duty is Guernsey's equivalent of stamp duty. It is charged on instruments effecting the transfer of property situated in Guernsey, including real property, shares in property-owning companies, and certain other transactions. Rates range from 0% to 2.5% depending on the type of transaction and the consideration paid.
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