Seychelles News

  • Seychelles Encouraged To Hike Taxes On Tourism Services Firms 22nd June 2017

    Seychelles has scope to further increase its tax revenue despite having a relatively high tax-to-GDP ratio already, the International Monetary Fund (IMF) has said.

    The fund said that while Seychelles collects more in tax than other tourism-dependent island countries, its business tax-to-GDP ratio has been hovering around 4.25-5.5 percent, down from a peak at 7.1 percent in 2011.

    It indicated that the country should limit tax incentives for tourism-related companies, saying that the policies including taxing businesses in the sector at a rate of 15 percent, compared with 30 percent to 33 percent for other companies, had reduced tax collections by 0.5 percent of GDP.

    Elsewhere the IMF welcomed the country’s plans for a property tax but said that it should be “non-discriminatory and should minimize distortions.” Seychelles is also considering the introduction of a sugar tax in its November budget and has delayed the introduction of a progressive personal income tax until January 1, 2018.

    Seychelles announced significant reforms in its December 2016 Budget, including the introduction of a new property tax will be introduced on land ownership in Seychelles, to be levied only on foreigners, and purchases of private land by foreigners will also attract a high stamp duty. There were also comprehensive changes proposed covering the personal and corporate income tax regimes.

  • 68 Jurisdictions Sign BEPS Multilateral Instrument 9th June 2017

    68 countries have signed the OECD’s Multilateral Convention, designed to swiftly implement a series of tax treaty-related measures proposed in the OECD’s base erosion and profit shifting project into these countries’ double tax agreements.

    The signing ceremony for the Convention took place on June 7, 2017, in Paris. The multilateral instrument (MLI), developed by the OECD under Action 15 of the BEPS project, will transpose BEPS recommendations into over 1,100 tax treaties worldwide. The Convention will strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration (which has been adopted by 25 signatories), to reduce double taxation and increase tax certainty for businesses.

    Eight additional countries and jurisdictions have signed a letter expressing their intent to sign the Convention and additional countries and jurisdictions are actively working to prepare for signature in the near future. The position of each signatory under the Convention is now available on the OECD’s website. The OECD said it will provide a database and additional tools on its website by the end of the year, to support taxpayers and tax administration with understanding and applying any potential changes.

    The OECD has released a toolkit, which intends to further develop, which currently includes a legal note on the functioning of the MLI under public international law, a step-by-step overview on the application of the MLI, and a flowchart on the application of MLI provisions. It has also released answers to a total of 41 frequently asked questions.

    The first modifications to bilateral tax treaties are expected to enter into effect in early 2018.

    OECD Secretary-General Angel Gurria commented: “The signing of this Convention marks a turning point in tax treaty history. We are moving towards rapid implementation of the far-reaching reforms agreed under the BEPS project in more than 1,100 tax treaties worldwide, and radically transforming the way that tax treaties are modified. Beyond saving signatories from the burden of re-negotiating these treaties bilaterally, the new Convention will result in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of our citizens.”

  • Seychelles Confirms Penalties For Late Business Activity Statements 31st May 2017

    As of June 1, the Seychelles Revenue Commission is applying penalties for late submission of business activity statements (BAS).

    Through the BAS, businesses must report and pay a number of taxes, such as goods and services tax, pay-as-you-go (PAYG) tax installments, PAYG withholding, excise tax for locally manufactured goods, and income and non-monetary benefits tax.

    Following the entry into force of Statutory Instrument 1 of 2017, the following penalties apply from June 1:

    • SCR500 (USD36) in the case of a small business, plus SCR50 for each week or part of a week that the form is not furnished;
    • SCR1,000 for medium businesses, plus SCR100 for each week or part of a week; or
    • SCR5,000 in the case of a large business, plus SCR500 for each week or part of a week.