Seychelles's Tax Transparency Rating Upgraded
by Lorys Charalambous, Lowtax.net, Cyprus
12 November, 2015
The Seychelles has received praise recently for improving how it exchanges information with other jurisdictions' tax authorities in practice, with the OECD recently releasing a report that notes improved adherence with international standards.
In late October, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes approved supplementary reports for Cyprus, Luxembourg, and the Seychelles. The three jurisdictions, which had previously been rated non-compliant, were commended for making significant changes to their legal frameworks or practices, receiving new overall ratings of "Largely Compliant."
The earlier report identified gaps in respect of effective enforcement provisions and supervision to ensure that up-to-date ownership information in relation to international business companies (IBCs) will be available and in respect of transfer of bearer shares certificates. It also identified a lack of supervision particularly in the case of IBCs and lack of effective sanctions in situations where accounting data is not kept.
The OECD said, since the Phase 2 review, the Seychelles has (i) strengthened sanctions for non-compliance with legal requirements including broadening of possibility to strike off a company where the requested information is not provided; (ii) prohibited bearer shares; (iii) introduced requirement for IBCs to provide declaration of compliance with its ownership and accounting obligations whose breach can be sanctioned; (iv) introduced an obligation on corporate service providers (CSPs) to monitor compliance of their clients with record keeping obligations and periodically report results of this monitoring to the FSA; (v) introduced an obligation to maintain the share register at the corporate service provider's office in all cases; (vi) restructured the supervisory authority of the offshore sector and strengthened its supervisory powers; (vii) increased the number of inspections and the proportion of inspected IBCs; and (viii) increased the number of cases and level of sanctions applied including cases where an IBC was struck-off from the register.
Since the Phase 2 review, the Seychelles also signed the Multilateral Convention on mutual administrative assistance, which came into force in the Seychelles on October 1, 2015.
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