Guernsey Accounting Questions Answered

Is Guernsey a tax haven?

Guernsey levies 0% corporate income tax on standard companies. It is a low-tax jurisdiction, not an opaque offshore secrecy haven. Guernsey meets OECD and EU standards on transparency and information exchange, and imposes economic substance requirements on companies earning passive income.

Does Guernsey have VAT?

No. Guernsey has no VAT and no GST. Businesses operating in Guernsey do not charge VAT on their sales, do not register for VAT, and have no VAT filing obligations. This is one of Guernsey's most distinctive commercial features.

What is the personal income tax rate in Guernsey?

Guernsey personal income tax is a flat rate of 20% on all income above personal allowances. There is no higher rate band, no capital gains tax, and no inheritance tax in Guernsey. The personal allowance is £15,000 for a single person (2025).

How does Guernsey tax compare to the UK?

Guernsey levies 0% corporation tax (standard), 20% flat personal income tax, and has no VAT, no capital gains tax, and no inheritance tax. The UK levies 25% corporation tax, up to 45% income tax, 20% VAT, up to 24% CGT, and 40% IHT.

What are social insurance contribution rates in Guernsey?

Guernsey social insurance contributions are 7% for employees and 6.5% for employers on earnings between the lower and upper earnings limits. Self-employed individuals pay approximately 11%. Contributions are collected through the monthly ETI system alongside income tax.

What is Document Duty in Guernsey?

Document Duty is Guernsey's equivalent of stamp duty. It is charged on the transfer of Guernsey property (real estate) and some other instruments. Residential property rates range from 0% on the first £250,000 to 2.5% on amounts above £1.5 million, applied on a banded marginal basis.

How do I set up a company in Guernsey?

To set up a Guernsey company, you instruct a licensed Guernsey corporate service provider (administrator) who prepares the incorporation documents, files with the Guernsey Registry, and provides the registered office. Incorporation typically takes 1-5 business days.

What are the substance requirements for Guernsey companies?

Guernsey companies earning income from 9 specified relevant activities must meet economic substance requirements: being directed and managed in Guernsey, having adequate employees and expenditure there, and conducting core income-generating activities on-island. Penalties for non-compliance reach £100,000.

What is the Guernsey financial services sector?

Guernsey is one of the world's leading financial centres, managing over £400 billion in investment funds, domiciling around 700 insurance entities (one of the world's top 10 captive domiciles), and operating a substantial private banking sector. The sector is regulated by the Guernsey Financial Services Commission.

How do Guernsey trust structures work?

A Guernsey trust is a legal arrangement where assets are held by trustees for the benefit of beneficiaries, governed by Guernsey's Trusts (Guernsey) Law. Guernsey trusts are widely used for succession planning, asset protection, and international wealth structuring. Guernsey has no inheritance tax on trust assets.