SEYCHELLES TAX REGIME Prepared by: Mr. Rupert Simeon DG Policy and Strategy Ministry of Finance
CONTENTS This presentation will aim to give an over view of the Seychelles Tax System by focusing on the following: Concessions in the current tax regime The Reforms (2009-2012) Existing taxes and rates The forthcoming VAT Double Taxation Agreements Import Permits
PRIOR TO THE REFORMS There existed a series of Incentives Acts aimed at specific investment sectors such as: Tourism (TIA) Agriculture and Fisheries (AFIA) International Trade Zone (ITZ) Specific investment promotion areas (IPA)
BUSINESSES INELIGIBLE FOR CONCESSIONS All other businesses not covered by an Incentives Act were subject to full rates of: Business Tax SSF Trades Tax GST etc.
TAX POLICY IN PLACE The key objectives of the reform were to: Broaden the tax base Introduce uniform rates of tax for all businesses (by eliminating concessions and exemptions): Business Tax Trades Tax PIT GST
REFORM PROGRESS 2009-2012 January 2010 Introduction of new Business Tax Act Introduction of the Revenue Administration Act Introduction of the Seychelles Revenue Commission Act July 2010 Introduction of Income and Non-monetary Benefits Tax (PIT): to replace the SSF July 2012 Introduction of Value Added Tax (VAT) to replace GST
SELF- ASSESSMENT The new tax regime will be reliant on a process based on self-assessment : Under a self- assessment process the taxpayer is responsible for ensuring that the lodgment of returns is done on time; clearly identifying the extent of tax liability Payment of self-assessed tax liability is due and payable at the time of lodgment of return (assessment will no longer be issued by SRC)
EXISTING TAXES AND RATES Business Tax Sole Trader 0% on first R150,000 15% between R150,001 and 1,000,000 33% on remainder Company/ Trust 25% on first R1,000,000 33% on remainder Personal Income Tax Cash emoluments(deducted from employees salary) 15% Non-Monetary Benefits (levied on employee) 20%
EXISTING TAXES AND RATES CONT D Trades Tax 0% on most imported items 25% on motor vehicles SR 2 per litre on fuel Excise Tax Fuel- SR6 per litre Tobacco SR 2.5 per cigarette Alcoholic Beverages various specific rates Motor Vehicle (between 0% -75% depending on category and engine capacity) GST 15% on imported goods 15% on turnover for professional services and telecoms 12% for the Tourism sector 15% on residential dwelling rental income
VAT VAT legislation was approved by the National Assembly in December 2010 VAT will replace the Goods and Services Tax VAT Threshold (to be determined) VAT Rate (to be determined)
DOUBLE TAXATION AGREEMENTS Currently, Seychelles has 19 signed DTA s and are negotiating a further 11 The main benefits of DTA s for businesses are: Certainty as to tax obligations in either jurisdiction Elimination of potential Double Taxation Potential availability of concessionary withholding tax rates in respect to dividends, royalties and interest
Country DOUBLE TAXATION AGREEMENTS Withholding Tax Dividends Interest Royalties Bahrain N/A N/A 5% Barbados Not exceed 5% Not exceed 5% Not exceed 5% Belgium 5% if beneficial owner is a company holding at least 10% of the company issuing the dividends or 15% in other cases Not exceed 10% Not exceed 5% Botswana 5% if the beneficial owner is a Not exceed 7.5% Not exceed 10% company which holds at least 25% of the capital of the company paying the dividends 10% in other cases China Not exceed 5% Not exceed 10% Not exceed 10% Cyprus N/A N/A Not exceed 5% Indonesia Not exceed 10% Not exceed 10% Not exceed 10% Kuwait N/A N/A Not exceed 5% Malaysia Not exceed 10% Not exceed 10% Not exceed 10% Mauritius N/A N/A N/A Monaco Not exceed 7.5% Not exceed 5% Not exceed 10% Oman Not exceed 5% Not exceed 5% Not exceed 10% Qatar N/A N/A N/A South Africa Not exceed 5% N/A N/A Thailand Not exceed 10% 10% if by financial institution otherwise 15% Not exceed 15% UAE N/A N/A Not exceed 5% Vietnam Not exceed 10% Not exceed 10% Not exceed 10% Zambia 5% if the beneficial owner is a Not exceed 5% Not exceed 10% company which holds at least 25% of the capital of the company paying the dividends 10% in other cases Zimbabwe Not exceed 10% Not exceed 10% Not exceed 10%
IMPORT PERMIT REQUIREMENTS An import permit is required for the importation of certain goods for different reasons; for example: Health and Safety Pharmaceuticals and Veterinary products Certain specified weapons, alcohol and tobacco (in commercial quantities), Pyrotechnics and blasting explosives Specified dangerous chemicals Insulated wires (standards) Aircrafts Ships and Vessels Meat and Fish, Fresh Fruit, Vegetables
IMPORT PERMIT REQUIREMENTS CONT D Environmental and Economic reasons Plants and Plant products Fertilisers Articles of plastic Mineral Fuels Wood (treated or untreated) Motor vehicles Animals and untreated animal by-products
Thank you!