Tapuriah Jain & Associates

Income Tax in Seychelles

Personal Income Tax

Who is liable. Seychelles nationals gainfully employed in the Seychelles are subject to income tax at the following rates on gross emoluments from such employment:

· Up to SCR8,555.50: 0%

· From SCR8,555.50 to SCR10,065.29: tax rate is calculated using the following formula:

Tax Rate = 0.15 - [8,555.50 - (Gross Emoluments × 0.85)] / (Gross Emoluments)

· Above SCR10,065.29: 15%

Non-Seychelles nationals gainfully employed in the Seychelles are subject to tax at a rate of 15% on gross emoluments from such employment.

Income subject to tax

Employment income. Under the Income and Non-monetary Benefits Act, 2010, individuals employed in the Seychelles are subject to tax at the rates mentioned above on their gross emoluments. Gross emoluments consists of cash remuneration received by an employed individual and includes salaries, wages, cash allowances, directors’ fees and work condition supplements. Non-monetary benefits, such as accommodation, utilities and in-house benefits, provided by employers to employees in the course of an employment contract are subject to tax at a rate of 20% of the taxable value of the non-monetary benefits. Employers bear this tax. The taxable value of the non-monetary benefit is reduced to the extent that the benefit is used by the employed person in the performance of his or her duties.

Self-employment and business income. Self-employed individuals carrying on a trade, business or profession are subject to business tax on their taxable profits. Expenses are deductible to the extent they are incurred in deriving taxable business income. For small businesses with annual turnover below SCR1 million, Presumptive Tax is payable at a rate of 1.5% of turnover.

Investment income. Withholding tax is imposed on dividends paid to nonresidents at a rate of 15%. The withholding tax is considered a final tax. Dividends paid to residents are not subject to withholding tax and are exempt from tax at the level of the recipient.

A withholding tax applies to interest paid to residents and nonresidents other than banks, finance companies and other enterprises that are principally engaged in the business of lending money. The withholding tax is considered to be a final tax for nonresidents. The withholding tax rate ranges from 5% to 33%.

· No withholding tax is imposed on royalties paid to residents. The rate is 15% with respect to royalties paid to nonresidents for the following:

· The use of, or right to use, copyrights, patents, designs, models or trademarks

· The use of secret formulas, processes or know-how

· Scientific, industrial or commercial knowledge, information or services

· The receipt of, or right to receive, visual images or sounds transmitted by satellite optic, optic fiber or similar technology

· The supply of technical, industrial, commercial or scientific equipment

· The use of, or right to use, industrial, commercial or scientific equipment

Capital gains. Seychelles does not impose a capital gains tax.

Corporate Income Tax

Corporate income tax. Under the Business Tax Act, resident and nonresident corporate and non-corporate businesses are subject to business tax on their income derived from the Seychelles.

A company is a resident of the Seychelles if it is incorporated there. In addition, a company not incorporated in the Seychelles that carries on business in the Seychelles is a resident if its central management and control are located in the Seychelles or if its voting power is controlled by shareholders who are residents of the Seychelles.

Rates of corporate income tax. Corporations and trustees are subject to business tax at a rate of 25% on the first SCR1 million of taxable income and at a rate of 30% on the balance.

For telecommunications service providers, banks, insurance companies, and alcohol and tobacco manufacturers, the rate of business tax is 25% on the first SCR1 million of taxable income and 33% on the remainder.

Companies listed in the Seychelles securities exchange are subject to business tax at a rate of 25%.

The Tourism Investment Act 2003 has been repealed. The Eighth Schedule to the Business Tax Act offers various tax incentives to certain businesses to encourage investment in the Seychelles. These incentives include reduced rates of business tax, tax credits, special deductions and accelerated depreciation. The businesses listed in the schedule include, but are not limited to, farming entities, agricultural processors, fisheries processors, boat owners and persons carrying on the businesses of hotels, guesthouses or self-catering. The rates of business tax for businesses under this schedule are 0% on the first SCR250,000 and 15% on the balance.

Capital gains. Capital gains are not taxable in the Seychelles.

Administration. The tax year is the calendar year. Annual tax returns are due on 31 March. The tax shown on the annual tax return is payable on submission of the return. Companies must make monthly provisional tax payments during the tax year, based on the income for the preceding year. The payments are due by the 21st day of the month following the month for which a payment is due. At the beginning of each tax year, the Revenue Commissioner issues a provisional tax assessment, which sets out the required provisional payments.

Dividends. Withholding tax is not imposed on dividends paid to resident persons. Dividends paid to nonresidents are subject to withholding tax at a rate of 15%. Dividends received from nonresident companies are not taxable.

Foreign tax relief. Seychelles does not grant relief for foreign taxes paid.