Seychelles: Double Tax Treaties
Table of Treaty Rates
According to the Seychelles International Business Authority, the Seychelles has Double Tax Agreements in force with the following countries: Bahrain, Barbados, Botswana, China, Cyprus, Indonesia, Malaysia, Mauritius, Oman, Qatar, South Africa, Thailand, the United Arab Emirates, Vietnam and Zambia.
Double Tax Agreements with the following countries have been signed but are not in force: Belgium, Bermuda, Ethiopia, Kuwait, Lesotho, Luxembourg, Malawi, Monaco, Sri Lanka and Zimbabwe.
Negotiations have been concluded with Egypt, Kenya, Morocco, Mozambique, Namibia, Pakistan, Portugal, Tunisia and Swaziland.
The Government sees such treaties as being an important part of its scheme to develop as a key financial hub in the Indian Ocean, and is actively seeking to expand its tax treaty network.
In August 2010, the Seychelles signed its first Tax Information Exchange Agreement, with the Netherlands which entered into force on May 14, 2012, along with TIEAs with Denmark, Guernsey, Iceland, Norway, Sweden and the Faroe Islands.
After Indonesia threatened to abrogate its DTA with the Seychelles, alleging 'round-tripping' by Indonesian companies, in March, 2006, the Seychelles Association of Offshore Practitioners and Registered Agents (SAOPRA) said that Indonesia had no legal grounds to do so, at least until 2010.
SAOPRA contended that by virtue of Article 29 of the Indonesia / Seychelles DTA, the DTA is legally binding and could not be ended until 2010 at the earliest. SAOPRA further stated that, notwithstanding inferences to the contrary by the Indonesian Tax Office, Seychelles companies can be resident (and have permanent establishment) in Indonesia (such as if managed by Indonesian residents) and so step outside the terms of the DTA and become fully taxable in Indonesia.
On the other hand, if persons are using Seychelles tax resident companies to hold shares in Indonesian companies and, apart from that, the Seychelles companies conduct no activities in Indonesia (and have a permanent establishment in Seychelles), then the Seychelles companies can lawfully access and rely on the DTA benefits (including reduced Indonesian withholding tax on repatriated dividends and avoidance of Indonesia capital gains tax on sale of the shares).
The Seychelles / Indonesia DTA sets a cap of 10% Indonesian withholding tax on repatriated dividends, interest and royalties (instead of usual rate of 20%). More particularly Article 13(4) provides that no Indonesian capital gains tax applies on disposal of shares in Indonesian companies held by the Seychelles company (ie. gains are taxable in Seychelles, but no tax applies as there is no CGT in Seychelles).
The Seychelles / Indo DTA also offers a fiscal advantage over the Singapore / Indo DTA. The principal difference lies in the treatment of the proceeds from the sale of shares in a private Indonesian company. Under the Seychelles DTA, the gain is exempt from tax; there is no exemption under the Singapore DTA. Therefore, if a Singapore company sells the shares of a private Indonesian company, a 5% tax is levied on the gross sales proceeds. This tax is particularly painful if the shares are being sold at a loss since the tax is levied on gross proceeds, not the gain.
Latest Seychelles Treaty Updates
Treaty Update: India - Seychelles
04 September, 2015
India and Seychelles signed a TIEA on August 26, 2015.
Treaty Update: Seychelles - Guernsey
16 April, 2015
The Seychelles has adopted legislation ratifying the DTA signed with Guernsey.
Treaty Update: Seychelles - Various
05 March, 2015
Legislation to ratify the Seychelles' DTAs with Singapore and Kenya was tabled in the National Assembly on March 2, 2015.
Treaty Update: Seychelles - Singapore
11 July, 2014
The Seychelles and Singapore signed a DTA on July 9, 2014.
Treaty Update: Switzerland - Seychelles
04 June, 2014
Switzerland and the Seychelles signed a TIEA on May 26, 2014.
Treaty Update: Ghana - Seychelles
23 May, 2014
Ghana and the Seychelles signed a DTA on May 20, 2014.
Treaty Update: Seychelles - Georgia
06 May, 2014
The Seychelles and Georgia are to launch negotiations towards a DTA, authorities in the Seychelles confirmed on April 29, 2014.
Treaty Update: Seychelles - Kenya
18 April, 2014
The Seychelles and Kenya signed a DTA on March 19, 2014, the Seychelles Government has announced. The agreement was initialed in July 2011.
Treaty Update: Seychelles - Isle of Man
27 December, 2013
The DTA signed between the Seychelles and the Isle of Man entered into force on December 16, 2013.
Treaty Update: Denmark - Seychelles
01 August, 2013
According to preliminary media reports, the TIEA signed between Denmark and the Seychelles entered into force on July 28, 2013.
Treaty Update: Isle of Man - Seychelles
17 April, 2013
The Isle of Man Government on April 11, 2013, confirmed the signing of a DTA with the Seychelles on March 25, 2013, by the Isle of Man, and by the Seychelles on March 28, 2013, by post.
Treaty Update: Seychelles - Various
22 November, 2012
According to preliminary media reports, the Seychelles signed a DTA with Swaziland, and initialled a DTA with the Isle of Man, both on October 16, 2012.
Treaty Update: Seychelles - Finland
21 November, 2012
According to preliminary media reports, the TIEA signed between Finland and the Seychelles on March 30, 2011, is to enter into force on November 22, 2012.
Treaty Update: Malawi - Seychelles
14 September, 2012
Malawi and the Seychelles signed a DTA and two accompanying Protocols on September 6, 2012, Malawi's Ministry of Finance has announced.
Treaty Update: Armenia - Seychelles
22 August, 2012
Armenia and the Seychelles initialed a DTA during five days of meetings which concluded on August 17, 2012.
Treaty Update: Seychelles - Ethiopia
24 July, 2012
According to preliminary media reports, the Seychelles and Ethiopia signed a DTA on July 14, 2012.
Treaty Update: Seychelles - Luxembourg
10 July, 2012
According to preliminary media reports, Luxembourg and the Seychelles signed a DTA on July 4, 2012.
Treaty Update: Seychelles - South Africa
13 June, 2012
According to the South African Revenue Service, the DTA signed between the Seychelles and South Africa entered into force on May 15, 2012.
Treaty Update: Pakistan - Seychelles
29 May, 2012
According to preliminary media reports, Pakistan's Cabinet approved the signing of a draft DTA between Pakistan and Seychelles on May 23, 2012.
Treaty Update: Sri Lanka - Seychelles
09 November, 2011
According to preliminary media reports, the DTA between the Seychelles and Sri Lanka, which was initialled in December 2008, was signed on November 7, 2011.
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Treaty Update: Seychelles - Kenya
28 July, 2011
According to preliminary media reports, the governments of the Seychelles and Kenya have initialled a double tax avoidance agreement.
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