Guernsey has signed a new tax treaty with the UK. The new tax treaty replaces the one that has been in force since 1951.
The new tax treaty is based, broadly, on the OECD Model Tax Convention, which Guernsey has generally followed in its negotiations with other jurisdictions in recent years. The text of the tax treaty incorporates some of the recent international standards designed to prevent base erosion and profit shifting (BEPS).
The new tax treaty will also facilitate exchange of information between the two governments.
Guernsey’s Policy and Resources Committee President Gavin St Pier said: “While the previous double taxation agreement with the UK has served both sides well for more than 60 years, it was important that a new agreement was negotiated which reflected the changes in international taxation that have occurred since the 1950s, and the island’s commitment to meeting international tax standards including the most recent BEPS standards, set by the OECD.”
“Given how close our trading relationship with the UK is, ensuring that individuals and companies understand the way that they will be taxed by each government is hugely important.”