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Seychelles

General Information

Country Name: Seychelles
Currency: Seychellois Rupee (SCR)
Primary Tax Authority: Seychelles Revenue Commission (SRC)
Key Legislation:

  • The Business Tax Act 2009
  • The Value Added Tax Act 2010
  • The Income and Non-Monetary Benefits Tax Act 2010

Fiscal Authority Allocation

Centralized Fiscal System:
Seychelles operates a centralized tax system where all tax revenue is collected and managed by the national government through the Seychelles Revenue Commission. There are no regional or local tax authorities.

Corporate Income Tax (CIT)

Standard Rate: 15% – 33%
Seychelles applies a progressive corporate income tax rate, depending on the level of taxable income:

  • 15% on the first SCR 1 million of taxable income
  • 33% on taxable income exceeding SCR 1 million

Corporate Forms and Taxation:

  1. Domestic Companies: Subject to the progressive CIT rates on worldwide income.
  2. International Business Companies (IBCs): Tax-exempt on income derived from outside Seychelles. However, IBCs cannot operate within the domestic economy unless they change their tax status.
  3. Special License Companies (CSLs): Subject to a preferential 1.5% CIT on foreign-sourced income, making them attractive for international business and financial services.

Exemptions and Incentives:

  • Tax Holidays: Certain industries, such as agriculture and fisheries, may benefit from tax holidays for up to 10 years, depending on the investment size and contribution to the economy.
  • Free Trade Zones: Companies operating in designated free trade zones are exempt from CIT for up to 10 years.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 15%
Seychelles implemented VAT in 2013, replacing the previous GST. The standard VAT rate is 15%, applying to most goods and services, including imports.

Exemptions:
Certain essential goods, such as basic food items, education services, and healthcare, are VAT-exempt. Additionally, exports of goods and services are zero-rated.

Personal Income Tax (PIT)

Flat Rate: 15%
Seychelles imposes a flat personal income tax rate of 15% on all taxable income. Employers are responsible for withholding and remitting the tax on behalf of their employees.

Exemptions:

  • Income up to SCR 8,555 per month is exempt from PIT, providing tax relief to low-income earners.

Additional Mandatory Contributions

Social Security Contributions:
Both employers and employees contribute to the Seychelles Pension Fund:

  • Employer Contribution: 3% of gross salary
  • Employee Contribution: 2% of gross salary

Self-employed individuals are required to contribute 5% of their income to the fund.

Withholding Taxes

  • Dividends: 0% (for non-residents), 15% (for residents)
  • Interest: 15%
  • Royalties: 15%
  • Payments to non-residents: 15% withholding tax applies to fees for services rendered by non-residents.

Transfer Pricing Rules

Seychelles has recently introduced transfer pricing regulations in line with international standards, particularly the OECD guidelines. These rules require related-party transactions to be conducted on an arm’s-length basis, ensuring tax compliance.

Special Tax Regimes

  • Seychelles International Business Companies (IBCs): IBCs are tax-exempt for foreign-sourced income but are subject to a USD 100 annual license fee.
  • Companies with Special Licenses (CSLs): These companies enjoy a reduced CIT rate of 1.5% on foreign-sourced income and access to Seychelles’ extensive network of double tax agreements.

Other Taxes

  • Business Tax: In addition to CIT, certain businesses (e.g., banks, insurance companies) may be subject to specific business tax regimes.
  • Property Tax: No property taxes are levied in Seychelles.
  • Stamp Duty: Stamp duty applies to certain transactions, such as property transfers and leases, at varying rates.

Double Taxation Agreements (DTAs)

Seychelles has established double taxation agreements (DTAs) with over 20 countries, including major trading partners such as China, South Africa, and Mauritius. These treaties aim to prevent double taxation on income and provide reduced withholding tax rates.

Local Taxes

There are no regional or municipal taxes in Seychelles. All taxes are administered at the national level by the Seychelles Revenue Commission.

Compliance and Reporting

Annual Filing:
Corporations must file annual tax returns within four months of the end of their financial year. The tax year runs from January 1st to December 31st. Individuals are generally not required to file personal income tax returns, as taxes are withheld by employers.

Penalties for Late Filing:
Penalties for late filing or payment of taxes include a fixed percentage of the overdue tax amount and daily interest charges.

Recent Developments

Tax Policy Reform:
Seychelles has been actively revising its tax laws to comply with international standards, particularly those of the OECD. This includes the introduction of new transfer pricing rules and the reduction of tax incentives that may be considered harmful by international standards.

Digital Taxation:
Seychelles is exploring the possibility of introducing digital taxes to address the challenges of taxing the digital economy, though no formal measures have been enacted yet.

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