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Tax Haven Guernsey

The island of Guernsey forms part of British overseas region and is situated in the English Channel. Together with Jersey, Guernsey forms the Channel Islands. The Republic of Guernsey includes several other smaller islands. Guernsey depends heavily on its tourism, manufacturing and financial services sector for continuance of its strong economy.

Offshore services provided in tax haven Guernsey includes fund management, offshore banking, and the incorporation of offshore companies, insurance, and the formation of trusts among other services.

Tax haven Guernsey can be classified as one of the pioneers of offshore/non-resident regimes as in 1950 it introduced laws for offshore companies that were owned by non-residents under the Corporation Tax (Guernsey) Law. Then these offshore companies were taxed a fix rate of £500 per year.

Fast forward many years and many repeals and amendments later, now Guernsey Company laws have transformed all offshore companies into resident corporations that are subject to full taxation. However, in tax haven Guernsey, offshore companies could receive full tax exemptions if they meet certain conditions set out in the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989, the new Act.

To qualify for the exempt Company status the following conditions must be met. The Application for exempt status must be made no later than March 31 in the year of assessment. A fee of £500 has to be paid each year. No resident of Jersey or Guernsey can have an interest in the exempt company other than as a shareholder in, or debenture holder of, a body corporate, which has a beneficial interest in the company; and is listed on a stock exchange. There must be full disclosure of beneficial ownership made to the Commercial Relations Department to the satisfaction of that department.

Like the CTC, the exempt company provides a convenient tax-free vehicle for the private investment holding of stocks, bonds, real estate, private yachts, patent rights, etc.

Tax haven Guernsey companies complying with these conditions, are referred to as Exempt Companies and do not pay any taxes on income generated in a foreign jurisdiction. Unlike the old repealed laws, offshore corporations can now freely invest in Guernsey to establish branch business, management offices and the like.

As a tax haven Guernsey has a wide range of benefits for offshore business and investment. It classifies itself as a tax haven with low taxes, but there are other advantages offered by tax haven Guernsey, confidentiality laws. It is a tax haven within the same time zone or within a compatible time zone as Western Europe and the United Kingdom and tax haven Guernsey close to major London and European markets.

Tax haven Guernsey is politically and economically stable. The country has excellent reputation for its offshore company formation and banking services.

In Tax haven Guernsey, Non-Resident Foreign Companies (i.e. those companies that are not managed and controlled from Guernsey) will be charged with income tax at 20% only on income from Guernsey sources (other than bank interest, by concession); a Guernsey registered company cannot be non-resident – it is either resident or it is exempt or it is an International Body.

Exempt Private Limited Companies pay a fee of GBP500 along with their annual application for exemption and also a fee of GBP100 payable when dealing with an Application for Exempt Status and filing the Annual Return. Generally the Exempt Company does not trade locally, but will pay income tax at 20% on local income if there is any (except bank interest, by concession).

Guernsey is an offshore jurisdiction which appeals to investors internationally because of the large number of high-end offshore services available.