In 2017, the EU Code of Conduct Group (the Group) reviewed the
tax policies of various non-EU countries, including Guernsey. The
Group deemed Guernsey a cooperative jurisdiction but concerns were
raised due to a lack of statutory substance requirements which may
result in the profits registered in Guernsey not accurately
reflecting the economic activities being undertaken.
RESPONSE
The States gave a commitment to address the Group's concern
by the end of 2018 and, after close engagement with the other Crown
Dependencies and international bodies, published the Income Tax
(Substance Requirements) (Implementation) Regulations, 2018 (the
2018 Regulations). The legislation is effective
for accounting periods commencing on or after 1 January 2019.
