SCHEDULE
Article 2
EXCHANGE OF LETTERS
BETWEEN HER MAJESTY’S GOVERNMENT AND THE STATES OF GUERNSEY CONCERNING AN AGREEMENT BETWEEN THE TWO GOVERNMENTS FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE
Deputy Gavin St Pier
President, Policy & Resources Committee
Sir Charles Frossard House
La Charroterie
St Peter Port
Guernsey
GY1 1FH
Dear Gavin,
I have the honour to propose to you the AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE STATES OF GUERNSEY FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE (the AGREEMENT), at Appendix 1 to this letter, and the PROTOCOL, at Appendix 2 to this letter, which shall form an integral part of the AGREEMENT, and that both shall together have effect in accordance with Article 28 of the AGREEMENT.
I have the further honour to propose that, if the above is acceptable to the States of Guernsey, this letter and Appendices 1 and 2 together with your reply will constitute our mutual acceptance of the provisions of the AGREEMENT and PROTOCOL.
Mel Stride
The Rt Hon Mel Stride MP
Financial Secretary to the Treasury and Paymaster General
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ
Dear Mel,
I have the honour to acknowledge receipt of your letter of 2 July 2018, which reads as follows
“I have the honour to propose to you the AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE STATES OF GUERNSEY FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE (the AGREEMENT), at Appendix 1 to this letter, and the PROTOCOL, at Appendix 2 to this letter, which shall form an integral part of the AGREEMENT, and that both shall together have effect in accordance with Article 28 of the AGREEMENT.
I have the further honour to propose that, if the above is acceptable to the States of Guernsey, this letter and Appendices 1 and 2 together with your reply will constitute our mutual acceptance of the provisions of the AGREEMENT and PROTOCOL.”
I am able to confirm that the States of Guernsey is in agreement with the contents of your letter of 2 July 2018 and this letter will constitute our mutual acceptance of the provisions of the AGREEMENT and PROTOCOL.
Yours sincerely,
Deputy G A St Pier
AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE STATES OF GUERNSEY FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE
The Government of the United Kingdom of Great Britain and Northern Ireland and the States of Guernsey,
Desiring to further develop their economic relationship and to enhance their co-operation in tax matters,
Intending to conclude an Agreement for the elimination of double taxation with respect to taxes on income and on capital gains without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Agreement for the indirect benefit of residents of third States or territories),
Have agreed as follows:
1. This Agreement shall apply to persons who are residents of one or both of the Territories.
2. For the purposes of this Agreement, income derived by or through an entity or arrangement that is treated as wholly or partly fiscally transparent under the tax law of either Territory shall be considered to be income of a resident of a Territory but only to the extent that the same income is treated, for purposes of taxation by that Territory, as the income of a resident of that Territory.
3. This Agreement shall not affect the taxation, by a Territory, of its residents except with respect to the benefits granted under paragraph 3 of Article 7, paragraph 2 of Article 9 and Articles 18, 19, 22, 24, and 25.
1. This Agreement shall apply to taxes on income and on capital gains imposed on behalf of a Territory or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
2. There shall be regarded as taxes on income and on capital gains all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property.
3. The existing taxes to which the Agreement shall apply are in particular:
(a) in Guernsey, the income tax (hereinafter referred to as “Guernsey tax”):
(b) in the United Kingdom:
(i) the income tax;
(ii) the corporation tax; and
(iii) the capital gains tax;
(hereinafter referred to as “United Kingdom tax”).
4. The Agreement shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Territories shall notify each other of any significant changes that have been made in their taxation laws.
1. For the purposes of this Agreement, unless the context otherwise requires:
(a) the term “Guernsey” means the States of Guernsey and, when used in the geographical sense, means the islands of Guernsey, Alderney and Herm, and the territorial sea adjacent thereto, in accordance with international law, save that any reference to the law of Guernsey is to the law of the island of Guernsey as it applies there and in the islands of Alderney and Herm;
(b) the term “United Kingdom” means Great Britain and Northern Ireland but, when used in a geographical sense, means the territory and territorial sea of Great Britain and Northern Ireland and the areas beyond that territorial sea over which Great Britain and Northern Ireland exercise sovereign rights or jurisdiction in accordance with their domestic law and international law;
(c) the terms “a Territory” and “the other Territory” mean Guernsey or the United Kingdom, as the context requires;
(d) the term “person” includes an individual, a company and any other body of persons;
(e) the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes;
(f) the term “enterprise” applies to the carrying on of any business;
(g) the terms “enterprise of a Territory” and “enterprise of the other Territory” mean respectively an enterprise carried on by a resident of a Territory and an enterprise carried on by a resident of the other Territory;
(h) the term “international traffic” means any transport by a ship or aircraft, except when the ship or aircraft is operated solely between places in a Territory and the enterprise that operates the ship or aircraft is not an enterprise of that Territory;
(i) the term “competent authority” means:
(i) in Guernsey, the Director of Income Tax or his delegate;
(ii) in the United Kingdom, the Commissioners for Her Majesty’s Revenue and Customs or their authorised representative;
(j) the term “business” includes the performance of professional services and of other activities of an independent character; and
(k) the term “pension scheme” means any scheme or other arrangement which:
(i) is generally exempt from income taxation; and
(ii) operates to administer or provide pension or retirement benefits or to earn income for the benefit of one or more such arrangements.
2. As regards the application of the Agreement at any time by a Territory, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that Territory for the purposes of the taxes to which this Agreement applies, any meaning under the applicable tax laws of that Territory prevailing over a meaning given to the term under other laws of that Territory.
1. For the purposes of this Agreement, the term “resident of a Territory” means any person who, under the laws of that Territory, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature, and also includes that Territory and any political subdivision or local authority thereof. This term, however, does not include any...
