GUERNSEY Law and Practice Contributed by: Matthew Brehaut, Carey Olsen
and services tax (GST); however, no decision as to the introduction of GST has been made. Under current Guernsey tax law, there is no liability to capital gains tax, wealth tax, capi - tal transfer tax or estate or inheritance tax on the issuance, transfer or realisation of units in Guernsey funds (save for registration fees and ad valorem duty for a Guernsey grant of rep - resentation when the deceased dies leaving assets in Guernsey which required presentation of such a grant). Guernsey has a wide-ranging anti-avoidance provision. This provision targets transactions where the effect of the transaction or series of transactions is the avoidance, reduction or deferral of a tax liability. At their discretion, the Director of the Revenue Service will make such adjustments to the tax liability to counteract the effect of the avoidance, reduction or deferral of the tax liability. Guernsey is committed to adopting the base erosion and profit shifting (BEPS) minimum standards. Guernsey implemented country- by-country reporting in respect of account - ing periods commencing on or after 1 January 2016, and has also adopted the spontaneous exchange of tax rulings with other jurisdictions. On 7 June 2017, Guernsey, along with over 60 other jurisdictions, signed the OECD’s Multilat - eral Instrument to Implement Tax Treaty-Related Measures to Combat BEPS and Treaty Abuse. Like other offshore jurisdictions, Guernsey implemented legislative economic substance requirements, effective from 1 January 2019, to address concerns raised by the EU’s Code of Conduct Group on Business Taxation that Guernsey’s corporate tax system could facilitate offshore structures aimed at attracting profits
which do not reflect real economic substance. Guernsey tax-resident companies and limited partnerships registered in Guernsey will be sub - ject to substance requirements where and to the extent that they carry on a relevant activity. For the funds industry, the most relevant of the above activities will be: • fund management; • financing; • headquartering; and • distribution and service centres. However, collective investment schemes (oth - er than self-managed collective investment schemes) are not within the scope of substance requirements, and nor are trusts (although a cor - porate trustee may be). Guernsey does not specifically offer retail funds other than Class A funds, which have largely been superseded by the AIFMD regime. Other - wise, all fund types are open to retail investors, subject to the relevant rules specific to each fund type (other than Class Q funds, QIFs and PIFs, which would not be suitable for retail investors). Subject to those considerations, the previous - ly discussed responses regarding alternative investment funds apply equally to retail funds. 3.1.2 Common Process for Setting Up Investment Funds See 2.1.2 Common Process for Setting Up Investment Funds . 3. Retail Funds 3.1 Fund Formation 3.1.1 Fund Structures
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