The Tax Treatment of Film Production in Guernsey

• A non-Guernsey company making a film in Guernsey will generally not be regarded as having a taxable presence in Guernsey and hence will not be liable to tax in Guernsey on profits made from the production or subsequent distribution of the film.
• A company incorporated in Guernsey but owned by non-Guernsey residents can enjoy the same treatment by applying for tax exempt status. In return for a fee of £600 such a company is treated as though it is not resident in Guernsey for tax purposes and thus can enjoy a similar freedom from taxation in Guernsey as a company incorporated elsewhere.
• If for any reason a company making a film in Guernsey wishes to be liable to tax in Guernsey but does not want to pay tax at the standard rate of 20%, it may be able to apply for international status. International status is available to companies that are owned by non-Guernsey residents and which do not trade with residents of Guernsey. Such a company is able to agree a rate of taxation at a level above 0% up to a maximum of 30%. Ordinarily, the rate agreed would be fairly nominal. Such a company is entitled to have a taxable presence in Guernsey and may be appropriate if, for example, the company concerned wished to establish a permanent office in guernsey.
• Self employed artistes working in Guernsey on the production of a film will generally not be regarded as carrying on a business in Guernsey and thus in the absence of taking up residence in Guernsey they will not be liable to taxation in Guernsey on their earnings.
• Work performed in Guernsey by employees of a non resident production company that does not have a taxable presence in Guernsey is regarded as part of an employment carried on outside Guernsey. Thus, provided that the individual concerned is not treated as resident in Guernsey for tax purposes, the remuneration from such work will not be liable to tax in Guernsey.
• Self employed artistes who are not resident in Guernsey and who work in Guernsey for less than six months are unlikely to become liable to social security contributions in Guernsey. The liability of employees will depend on a number of factors including whether or not they are paying equivalent contributions in another country that has a reciprocal arrangement with Guernsey.
• There is no value added tax or other comparable indirect tax in Guernsey.

For further details on the tax treatment of companies or individuals in Guernsey please contact:

Jonathan Hooley
KPMG
Orbis House
20 New Street
St Peter Port
Guernsey
Tel: +44 (0) 1481 721000 (Office)
Tel: +44 (0) 1481 719544 (Direct)
Telefax: +44 (0) 1481 722373