Prior to application IC's business plan is discussed with the Administrator of Income Tax (or communicated to him by way of correspondence) thereby enabling the rate of tax to be set.
The terms provisionally agreed between the applicant and the Administrator of Income Tax are subject to ratification by the Income Tax Authority at the time of formal application for IC Status.
DISCLOSURE OF BENEFICIAL OWNERSHIP DETAILS
Before a formal application for IC status is made, beneficial ownership details must be disclosed to the Commission. Information must also be provided thereafter on the occurrence of any change in beneficial ownership. The Commission may also require other information in particular cases.
TIMING OF APPLICATION
An applicant for IC status is made as follows:
- Guernsey companies: prior to the date of registration of its constitutive documents,
- in any other case: prior to commencement of its operations in Guernsey or the date of the first board meeting in Guernsey.
An application for IC status may be made by the applicant or its agent and will be made subsequent to the events dealt with in former paragraphs. The application:
1.Must be in writing to the Income Tax Authority. There is no official application form.
2.Must be accompanied by:
- a copy of the company's proposed or existing constitutive documents,
- declaration that the information required by the commission has been provided,
- Details of the IC's intended activities and the rate at which it is proposed it should be charged to tax.
- Any other information required by the Income Tax Authority.
There is no provisions in the Law for late application for IC status.
CERTIFICATE OF C STATUS
Once an application is approved the Income Tax Authority will issue a certificate of IC status. This will show:
- the name of the IC;
- the date with effect from which IC status is to apply (this date cannot be earlier than 1st January in the year in which the application is granted);
- the date on which IC status expires - this will be no later than five years after the date with effect from which IC status is granted;
- the specified tax rate at which the IC is to be charged.
GRANT OF IC STATUS CONDITIONAL ON REGISTRATION
Where the Income Tax Authority grants an application prior to the registration of an IC's constitutive documents, the granting of this status is conditional on such registration taking place within three months. The certificate referred to above is issued upon such registration. This condition does not apply to any existing eligible companies.
RENEWAL OF IC STATUS
IC status may be renewed either at the specified tax rate or at a different rate for any period up to five years upon application being made during the currency of that status.
The procedures and requirements are identical to those made by new applicants. An IC that does not renew its status will be liable to tax at the standard rate of 20%.
Each year, by 31st May, an IC will make a declaration to the Income Tax Authority that its beneficial ownership has not changed since the date this information was last disclosed to the Commission.
REFUSAL OF APPLICATION
If the Income Tax Authority decides, for some reason, to refuse an application it must notify the applicant but need not give the reason for refusal. There is no right of appeal against the decision of the Income Tax Authority not to grant IC status.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Peter Crook on Tel: +44 (0) 1481 712706 or visit the Guernsey Financial Services Commission Web Site at: