On
this Page:
-
SEYCHELLES
SCOPE OF BUSINESS TAX
- SEYCHELLES
BUSINESS TAX RATES
- SEYCHELLES
CALCULATION OF TAXABLE BASE
- SEYCHELLES
FILING REQUIREMENTS AND PAYMENT OF TAX
- SEYCHELLES
WITHHOLDING TAX
Special
rules apply to offshore entities and Special License
Companies
The
Seychelles has a territorial basis of taxation;
that is, profits are taxed only if they are derived
or deemed to be derived from a source in the Seychelles.
There is no capital gains tax; interest, dividends
and other payments received from abroad are likewise
not taxed. A withholding tax on individual emoluments
from employment was introduced in July, 2010.
Government policy is to broaden the application
of the income tax to other sources of domestic-sourced
income (for example, dividends and interest on
savings) once the PIT becomes established and
the new system has been assessed.
Discussions
between the government and the International Monetary
Fund in July and September 2008 culminated in
the abolition of all exchange restrictions and
prompted a tightening of fiscal policy and a broadening
of the tax base.
Seychelles
Scope of Business Tax
The
Business Tax Act 1987 as amended governs company
taxation in the Seychelles. The Act states that
resident, non-resident corporate and non-corporate
businesses are liable to pay business tax on their
income derived from the Seychelles. A company
is considered resident if it is incorporated in
the Seychelles. A company not incorporated in
the Seychelles that conducts business there is
resident if its central management is located
in the Seychelles or if its voting power is controlled
by shareholders who reside there.
Income
is defined as all income received by a sole trader,
partnership, trust estate or company, less a number
of types of exempted income of which the following
are some of the main headings:
- the proceeds
of rental properties other than dwellings;
- profits from
dealing in or selling property;
- royalties;
- fees and commissions
in respect of the sale of property or the
processing of money loans;
- lease premiums;
- income on which
a final withholding tax has been levied (see
Withholding Tax
below - the 10% and 40% rates are considered
to be 'final').
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Seychelles Rates of Business Tax
Tax
rates for sole traders and partnerships are as
follows:
| Insurance
Threshold (SR) |
Rate |
| Nil
- 150,000 |
0% |
| 150,001
to 1m |
18.75% |
| Over
1m |
33% |
For
companies and trusts, the following rates apply:
| Insurance
Threshold (SR) |
Rate |
| First
1m |
25% |
| Above
1m |
33% |
Note
that an entity with a Certificate of Approval
under the Investment
Promotion Act 1994 may be exempt from part
or all of the Business Tax, or may have special
deductions or tax credits. Companies in the International
Trade Zone also have tax privileges.
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Seychelles Calculation of Taxable Base
Allowable
expenditure is that incurred 'in the course of
carrying on business activities', excluding capital,
private and domestic expenses. A normal range
of expenses are deductible. The following list
gives some of the main additional deductions that
are permitted:
- Pension scheme
contributions;
- Professional
fees incurred in preparation of the tax return;
- Net salaries
and wages, owners and partners are not permitted
a deduction of their salaries;
- Royalties and
other payments made to non-residents from
which withholding tax has been deducted (see
below);
- Previous years'
losses, which can be carried forward only
for five years; losses cannot be carried back;
capital losses are not deductible;
- Non-capital
expenditure on repairs to premises, plant
and machinery;
- Losses incurred
in property dealing;
- Specific bad
debt write-offs; provisions for this or other
purposes are not deductible;
- Office buildings
are depreciated at a rate of 50% for the first
year and 25% for the second and third years;
hotels are depreciated at a rate of 20% for
the first year and 10% for the following eight
years; other buildings are depreciated at
a straight-line rate of 4%; other assets are
depreciated at conventional straight-line
rates;
- Interest on
borrowings made for the purpose of producing
assessable income; the rate of interest chargeable
is limited by reference to Central Bank rates.
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Seychelles Filing Requirements and Payment
of Tax
The
tax year is normally the calendar year, ending
31st December. A tax return must be submitted
by March 31st following the end of the tax year,
along with the signed-off accounts.
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Seychelles Withholding Tax
There
are the following withholding taxes in the Seychelles:
- 15% on dividends
paid to non-residents (this is a final tax);
- 15% on interest
paid to non-residents other than financial
institutions (for whom a nil rate applies);
this is a final tax;
- 33% on interest
payments by a Seychelles financial institution
at maturity of a bearer security issued by
that institution; this is a final tax;
- 15% on royalties
paid to residents;
- 15% on royalties
paid to non-residents on certain types of
royalty (copyrights, patent, design and trademark
royalties are exempt).
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