On
this Page:
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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. There is no taxation of individual
income, but social security contributions are
payable which amount to an income tax - see Personal
Taxation.
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 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 are the same for corporate and non-corporate
businesses. The following rates apply:
| Insurance
Threshold (SR) |
Rate |
| Nil
- 250,000 |
0% |
| 250,001
and over |
15% |
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, but only if social security
contributions have been deducted; 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);
- 10%
on interest paid to non-residents other than
financial institutions (for whom a nil rate
applies); this is a final tax;
- 40%
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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