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5.1. Tax Base for Resident Entities

Resident entities are subject to corporate tax on their worldwide income earned from sources within and outside Guernsey. There are certain companies engaged in the financial sector and CIS activities which are eligible for tax exempt status subject to certain conditions, see Sec. 10.

Capital gains are not taxable in Guernsey. Hence, any type of capital gain is not included in the ordinary income.

Dividends paid to resident shareholders are subject to withholding tax which can be reduced if the distributed profits have already been taxed in the hands of the company.

Companies providing preferential loans to the beneficial members of the company are required to withhold tax on such loans subject to certain exemptions.

Stock dividends are treated as ordinary income.