Learn Everything There Is To Know About The Taxation System In The Seychelles 2022
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Table of Contents
Introduction
Learn Everything There Is To Know About The Taxation System In The Seychelles—When looking for a place to start a business, foreign investors look at taxation as one of the most significant factors to consider. The offshore company, commonly known as the IBC, is one of the many benefits offered by the Seychelles in this regard (international business company).
The business tax, often known as the corporate tax, is imposed on the profits of a firm. After any deductions (if any) have been made, this is the assessable income.
The Seychelles tax system is based on tax residency, which means that an individual or company must have a physical address, such as a registered address or a management address, in the country. Our Seychelles business formation advisors can provide detailed information on the country’s tax laws.
Taxation System In The Seychelles Most Important Taxes
Seychelles, like other countries, imposes direct and indirect taxes on persons and businesses. Seychelles, on the other hand, is known for the tax benefits it provides, particularly to international investors who set up offshore firms here.
The primary taxes levied in Seychelles are listed below.
the Seychelles income tax that is levied on natural people
Onshore companies in Seychelles are subject to a corporate tax.
the trades tax levied on goods imported into the Seychelles
The most major indirect tax in this country is the value added tax (VAT).
Real estate is subject to an immovable property tax.
In the Seychelles, there are additional other taxes to consider. The excise and presumption taxes, as well as the corporate and social responsibility tax (CSR) and the tourism marketing tax, are among them (TMT).
Determining Tax Liability In Seychelles
Even though the Seychelles is renowned as an offshore location with tax exemptions in many circumstances, taxes occurs in the same manner it does in onshore jurisdictions, with specific legislation governing the application of various levies. One of these rules deals with determining tax due prior to any levy being imposed.
Residents of the Seychelles, both individuals and businesses, will be taxed on their international income. Individual tax residence occurs when a person spends more than 180 days in the Seychelles in a calendar year. Corporations must be registered as onshore companies in order to pay corporate tax in the insular state; nevertheless, offshore companies established here are subject to various restrictions.
Individuals should be aware that foreign citizens will not be taxed on dividends, interest, or royalties generated in the Seychelles. This is frequently related to Seychelles’ double tax treaties.
The business tax on net income will be applied on natural people acting as sole traders or self-employed in Seychelles. Members of partnerships registered in this state are subject to the same tax requirements as individuals. In the Seychelles, income earned outside the country is not taxed. Income earned in the Seychelles that was subject to withholding tax at the source will not be subject to extra taxes.
Companies in Seychelles pay a variety of taxes
The tax rates imposed by the Seychelles government may appear excessive at first glance; nonetheless, it is important to note that the local taxation system offers numerous benefits.
Seychelles’ taxation system is made up of the following key taxes:
the company tax, which is levied at various rates ranging from 0% to 33%.
the personal income tax, which applies to employees and other individuals and has a set rate of 16 percent.
Value Added Tax (VAT): This is based on the same principles as VAT in other jurisdictions across the world, and it has a standard rate of 15%.
Other taxes: these include withholding taxes on profits, interest, and royalties, among others.
If a partnership’s or solo trader’s taxable income exceeds 150,000 SR in a given tax year, they are subject to business tax. Any net profit generated by a company in this jurisdiction is liable to taxation. In terms of taxation, however, a fundamental distinction is established between the International Business Company and other forms of businesses. Our staff, who specialises in Seychelles business formation, has outlined the tax benefits below.
The Seychelles has also signed a number of double tax treaties, lowering the corporation tax rate. Our Seychelles company registration agents can provide more information on the taxes that apply to individuals and businesses operating in the country.
Seychelles Corporate Social Responsibility Tax
The CSR tax, or corporate social responsibility tax, was incorporated into the Seychelles’ taxation system in 2013. It is taxed at a rate of 0.5 percent on monthly turnover by businesses that are not VAT registered but meet specific criteria. The CSR is levied at the same rate to VAT-registered businesses, but only on the turnover charged as VAT on invoices issued within a month.
A corporation must meet the following two standards in order to pay the CSR:
It must have a 1 million SCR turnover.
It must not be listed in the Business Tax Act of 2009’s Second Schedule.
The CSR was created with the goal of ensuring that businesses adhere to ethical standards and promoting corporate responsibility in order to make a positive impact on the communities and markets in which they operate.
More information on the CSR tax in Seychelles can be obtained from our local advisors.
Seychelles Has Tax Advantages
As previously stated, the Seychelles taxation structure offers various benefits to businesses. One of the better examples is the IBC form, which has a 0% corporate tax rate and is exempt from dividend withholding taxes. Foreign investors can also repatriate income earned through an offshore company in Seychelles tax-free.
Other peculiarities in Seychelles’ taxes of qualifying companies necessitate
a tax rate of 1.5 percent for special licence enterprises
a 25 percent company tax on the first 1,000,000 SCR and a 33 percent business tax on every sum above that
Capital gains are exempt from taxation.
There isn’t any stamp duty to pay.
a zero-percentage-point VAT rate
Seychelles Tax Requirements
The following considerations concerning taxation must be considered by Seychelles business owners:
the tax year: the tax year is usually the same as the calendar year, which runs from January 1 to December 31.
the mode of payment: corporations may be subject to one of two methods for remitting business taxes, as outlined below by our Seychelles company formation experts.
the yearly tax return: a payment that must be made on the same day as the business tax return is filed.
concessions: in some areas, such as farming, fishing, or tourism, investors may gain from concessions (for the construction or renovation of a hotel).
In order to be deemed a registered taxpayer, every firm, whether it is a sole trader, a partnership, or a corporation, must be registered with the Seychelles Revenue Commission when it is incorporated. All taxpayers are subject to a simplified self-assessed tax system, in which they evaluate the taxes owing to their firm on their own and submit the taxable income for the tax year, as well as the exemptions, deductions, and obligations payable for losses experienced throughout the year. As previously stated, the tax year is normally the calendar year; however, under Section 58 of the Business Act, firms are permitted to choose and implement an alternative period.
The pay as you go instalment and the pay as you go withholding are two options for firms to pay their taxes. The payment is made on a monthly basis and has the advantage of being less taxing (investors do not pay one large amount at the end of the tax year). When the tax is withheld from the gross payments made to a public body or business, or when the government makes a specific payment to a specific business, the pay as you go withholding is most commonly used in certain commercial industries, such as construction. Building and labour contractors, carpenters, mechanics, welders, and other enterprises are among those included. The percentage is 5%. One of our agents can not only assist investors in forming a company in the Seychelles in these industries, but also provide more information on this particular taxation approach.
Seychelles Personal Taxation
Some entrepreneurs, not just those interested in company creation in Seychelles, may be interested in the Seychelles tax system for people. Natural persons are only taxed on the money they earn in this jurisdiction, regardless of where they live (whether or not they are a Seychelles resident). As previously stated, the personal income tax rate is 15%. Foreign nationals working in the United States are not required to file a tax return.
Investors in the Seychelles may be interested in the taxation of their investment income. Tax residents are exempt from paying taxes on income earned from investments made outside of the jurisdiction. Income tax is levied on investment income earned in the Seychelles. Rental income is taxed at a rate of 15% when received by an individual.
When a dividend is paid to a non-resident, a 15% withholding tax is applied. Royalties and capital gains are not subject to withholding taxes. There are no restrictions on the amount of money that can be exchanged.
Seychelles receives foreign direct investments in a variety of industries. The following figures show the evolution of both the investment and the trade:
In the second quarter of 2018, Seychelles saw a 3.70 million USD rise in foreign direct investment.
From 2007 to 2018, the country’s average foreign direct investment value was 44.03 million USD.
In 2016, the total value of domestic exports was 6,132.2 million SR, with France and the United Kingdom as the primary destinations.
Seychelles Trading And Excise Taxes
Trades and excise taxes are two of the most important customs obligations that must be paid in Seychelles. The first is imposed on items imported into Seychelles and is computed in accordance with the Trades Tax Law’s requirements. It is calculated using the items’ Cost, Insurance, and Freight (CIF) value.
On the other hand, the excise tax is imposed on a variety of commodities imported or manufactured in Seychelles. Cigarettes and tobacco, automobiles, alcohol, and petroleum-based items are among them. According to the provisions of the Excise Duty Law of 2009, the excise tax is levied.
A Seychelles firm must register with the Customs Authority in order to pay the excise tax.
In Seychelles, there is an immovable property tax.
The immovable property tax is Seychelles’ most recent charge. This fee, which went into force in 2020, applies to foreign citizens who own residential real estate in the Seychelles. This tax is calculated at 0.25 percent of the market value of the property and must be paid by December 31st of each year. A person must register with the General and Valuation of the Immovable Property Registry in order to pay it.
The Immovable Property Tax In Seychelles
The immovable property tax is Seychelles’ most recent charge. This fee, which went into force in 2020, applies to foreign citizens who own residential real estate in the Seychelles. This tax is calculated at 0.25 percent of the market value of the property and must be paid by December 31st of each year. A person must register with the General and Valuation of the Immovable Property Registry in order to pay it.
What Is The Tax Year In Seychelles
The tax year in Seychelles, according to the Business Tax Act 2009, is the one-year period (1 January – 31 December) required for taxpayers to comply with the laws in this regard and pay the imposed taxes for firms and businesses in Seychelles.
What Is The Seychelles Business Tax
Insurances, natural resources of the tax year, interests, royalties, and dividends registered by a non-resident firm in Seychelles are all subject to the business tax. There are also tax breaks available in this area, based on the amount of revenue generated by a company with permanent establishments in the Seychelles.
What Deductions Are Allowed In Seychelles
The costs of selling stocks within a year are acceptable deductions for firms in Seychelles, according to the Business Tax Act 2009. These are the following:
the losses incurred in generating taxable business income for a single tax year
A net loss on the sale of a business asset refers to the categorization of a business asset that differs from other trading shares within a taxable year.
the fee for trading stocks for the purpose of generating taxable company revenues over the course of a year.
the legal limit set by the provisions of the law.
For more information about taxable incomes of companies in Seychelles, please contact one of our Seychelles company incorporation agents. Our experts can also assist overseas investors in forming businesses in the Seychelles.
Seychelles Business Tax Returns
If a partnership or trust has incurred losses for one taxable year, they must file a business tax return in Seychelles. It is important to understand that the business tax assigned to a publicly traded firm is due on the day the business tax return for that year is prepared. A corporation must also obtain a VAT number and file VAT returns in Seychelles, according to the law.
The same Business Tax Act 2009 includes information on Seychelles’ double taxation agreements with a number of nations throughout the world, which aid businesses in avoiding double taxation.
Foreign investors interested in forming a company in the Seychelles are encouraged to contact our local company formation experts for help with the process. You may also count on us for more information on Seychelles taxation.
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