2027 before ‘GloBE’ millions come rolling in

If the Assembly backs proposals from the Policy & Resources Committee, multinational corporates with a global annual turnover of more than 750m. euros will be caught by an Income Inclusion Rule and a domestic ‘top-up tax’ under the Pillar 2 Global anti-Base Erosion, known as GloBE rules, taking them to an effective domestic minimum tax of 15% from January 2025.

P&R hopes that this tax will net the States an extra £30m. a year, but it has warned that this will not be realised until 2027 at the earliest.

‘There remains some uncertainty around the estimate of additional revenue which may be raised, because it is dependent not only on how the legislation is applied in Guernsey, but also how it is applied in countries where those same entities might also face tax, or in jurisdictions where business might relocate if they feel there is an advantage to doing so,’ the committee said.

The committee said that it would develop local laws in conjunction with stakeholders and industry bodies and would focus on continuing to offer ‘an attractive and globally competitive investment environment for business, so as to retain our tax base, while maintaining Guernsey’s position as a responsible international finance centre, meeting international tax standards and best practices’.

It believes that the implementation of the GloBE rules is fully compatible with the island’s existing domestic company income tax regime, as it has been designed as a global set of rules to be targeted at large multinationals and will overlay the domestic regime of a jurisdiction.