Channel Islands: Initial Pillar Two guidance (Guernsey)

Main takeaways from the guidance

The government of Guernsey on October 1, 2025, issued the first set of Pillar Two guidance providing clarifications on the Pillar Two compliance obligations in Guernsey.

Guernsey has enacted both a multinational top-up tax (MTT) (equivalent to the income inclusion rule (IIR)), and a domestic top-up tax (DTT), applicable to financial years starting on or after January 1, 2025.

Main takeaways from the guidance include:

Both Guernsey’s MTT and DTT have been awarded transitional qualified status. Guernsey’s DTT is also considered eligible for qualified domestic minimum top-up tax (QDMTT) safe harbors.
The Guernsey Pillar Two law requires each in-scope group to register within 12 months from the start of the group’s ultimate parent entity’s (UPE’s) first accounting period in scope of Guernsey’s legislation or six months from the date that the entity becomes a member of the multinational enterprise (MNE) group (whichever of the periods is last to end). The registration must be done by the domestic filing entity.
The government is currently in the process of developing an online platform for registration and filing of Pillar Two taxes.
Each MNE group with constituent entities, joint venture, or joint venture subsidiary in Guernsey must appoint one domestic filing entity that is responsible for the registration and filing requirements of the group.
In-scope MNE groups having an entity that is intending to enter liquidation, dissolution, or any other form of winding up, or otherwise cease to be located in Guernsey for domestic top-up tax purposes, must complete the DTT Cessation Form, including notification and payment of the DTT, before its cessation.
The GloBE information return (GIR), a DTT return on the self-assessed amount of QDMTT due, and an MTT return on the self-assessed amount of IIR top-up tax due, all need to be filed within 15 months after the end of the reporting fiscal year (with an exception for the first year where the deadline is 18 months after the end of the first reporting fiscal year).

Read a November 2025 report prepared by KPMG’s EU Tax Centre

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Channel Islands: Initial Pillar Two guidance (Guernsey)

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