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Introduction of substance requirements for certain Guernsey tax resident companies

Introduction of substance requirements Guernsey

The Income Tax (Substance Requirements) (Guernsey) (Amendment) Ordinance 2018 Lodged for Debate


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The draft Income Tax (Substance Requirements) (Guernsey) (Amendment) Ordinance 2018 (“SRL” or “Substance Requirements Law”) provides detail as to which companies are affected, how the substance requirements will be applied and the penalties for failure to apply.Among the propositions within the draft law, we highlight the following:

  • detailed definitions are provided in order to assess whether a company carries on a “relevant activity”;
  • the requirements to satisfy the economic substance test;
  • penalties for non-compliance which could be as high as £100,000 and, ultimately, the company being struck off;
  • in relation to ‘high risk IP companies’, there is a rebuttable presumption that the economic substance test is not met;
  • certain information may be exchanged by the Comptroller with other competent authorities in the EU.

Please find below a copy of our SRL document with a summary of the measures that are being proposed under the draft SRL, which deserve special reflection and analysis.

As always, KPMG will be assisting its clients in getting ready for what is to come.

If you would like to discuss the above, please contact us.


Download the SRL document 

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KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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