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6.1. Main Rules Governing the Determination of Taxable Income

Taxable income is determined by adjusting the accounting / financial income for non-tax deductions, exemptions, etc. Companies in Guernsey can apply International Financial Reporting Standard (IFRS), UK GAAP, or US GAAP for preparing financial statements. On 30 November 2020, a circular is published in relation to IFRS16 concerning the treatment of leases for the accounting period commencing on or after 1 January 2019. Accordingly, the operating lease expense is deductible in tax computation for the lessee with the appropriate adjustment in the tax computation to add back the depreciation and interest.