Guernsey: local rules

Guernsey has no specific transfer pricing legislation, no statutory arm's length rule and no formal adoption of the OECD Guidelines. Under the Income Tax (Guernsey) Law, 1975 most company income is taxed at 0%. A 10% rate applies to banking, insurance, fiduciary, fund administration, investment management and some other regulated activities. A 20% rate applies to income from Guernsey land and property, regulated utilities, large Guernsey retail businesses, hydrocarbon oil and gas imports and supply, and cannabis cultivation. Related-party pricing is policed through the Law's general anti-avoidance provisions and, in tax treaties, the arm's length article.

There is no transfer pricing documentation requirement, no master file or local file and no filing threshold. A company should still be able to show, if the Revenue Service asks, that related-party dealings were at arm's length. Guernsey follows the OECD Country-by-Country standard for groups with consolidated revenue of EUR 750m or more. Economic substance rules apply to resident companies carrying on relevant activities and are reported on the company tax return.

No local methods are set. In practice the OECD Guidelines methods are used as the benchmark, but this is not required by law.

There are no transfer pricing penalties. A late company tax return gets an automatic GBP 300 penalty. If the return is still not in within 30 days of that penalty, further penalties of GBP 50 a day apply until it is filed. A service provider reports Pillar Two penalties of up to GBP 20,000 for failing to register and up to GBP 1,000 a day for late returns after 30 days, but these were not checked against the Regulations. CbC penalty amounts were not confirmed.

Enacted. The Income Tax (Approved International Agreements) (Implementation) (OECD Pillar Two GloBE Model Rules) Regulations, 2024 create a Domestic Top-up Tax (DTT, a qualified domestic minimum tax) and a Multinational Top-up Tax (MTT, the income inclusion rule) for fiscal years starting on or after 1 January 2025. Both received transitional qualified status from the OECD in 2025. There is no UTPR. Groups with revenue of EUR 750m or more in at least two of the four prior years are in scope. Each group appoints a Domestic Filing Entity, which registers the group by the end of its first in-scope year (12 months from its start), or within 6 months of an entity joining the group if later. Under Regulation 27 the GloBE Information Return, the DTT return, the MTT return and below-threshold notifications are due within 15 months after the fiscal year end, or 18 months for the group's first in-scope year, and the top-up tax is payable by the same date. An amending regulation was made in 2026; its text could not be read.