Seychelles News

  • Seychelles Enacts BEPS Legislation 27th December 2018

    Seychelles has enacted numerous legislative amendments that are intended to enable Seychelles to comply with the OECD’s base erosion and profit shifting (BEPS) minimum standards.

    The laws, which received assent from President Danny Faure on December 20, 2018, are:

    • The Seychelles Pension Fund (Amendment) Act, 2018;
    • The International Trade Zone (Amendment) Act, 2018;
    • The International Business Companies (Amendment) Act, 2018;
    • The Companies (Special Licences) (Amendment) Act, 2018;
    • The Securities (Amendment) Act, 2018;
    • The Insurance (Amendment) Act, 2018;
    • The Mutual Fund and Hedge Fund (Amendment) Act, 2018; and
    • The Business Tax (Amendment) Act, 2018

    The Government said all the laws, except the pension fund amendment, “will enable Seychelles to be compliant with the BEPS framework of the OECD, which will contribute to greater international confidence in the country’s financial risk assessment.”

    Back in March 2018, Ingela Willfors, a United Nations tax expert from the Swedish Ministry of Finance, warned that Seychelles was lacking the resources and capacity to effectively respond to the OECD’s recommendations. She recommended that authorities focus on those measures that must be implemented to meet international best standards – namely the BEPS minimum standards, on preventing treaty abuse, the introduction of country-by-country reporting rules, improving dispute resolution mechanisms, and tackling harmful tax practices.

    Seychelles signed up to the BEPS multilateral instrument to make changes to its tax treaties in June 2017. The Seychelles has for the past two years received support from Sweden on BEPS implementation, as part of a twinning program.

    Seychelles was this year to be peer reviewed on its compliance with the BEPS minimum standards on Action 5, Harmful Tax Practices, Action 6, Preventing Treaty Abuse, and Action 13, country-by-country reporting. In 2020, it will be reviewed on its implementation of recommendations on improving dispute resolution mechanisms.

  • Seychelles Supported To Implement BEPS Measures 14th December 2018

    Representatives from the OECD are in Seychelles until December 14 to support the territory to implement its recommendations to tackle base erosion and profit shifting.

    On December 13, 2018, the OECD is to host a technical workshop, which will explain to stakeholders the OECD’s minimum standards in the area of harmful tax practices, transfer pricing, and tax treaty abuse. There will also be a session on capacity building initiatives available to support countries in the implementation of the BEPS measures.

    Back in March 2018, Ingela Willfors, a United Nations tax expert from the Swedish Ministry of Finance, warned that Seychelles was lacking the resources and capacity to effectively respond to the OECD’s recommendations. She recommended that authorities focus on those measures that must be implemented to meet international best standards – namely the BEPS minimum standards, on preventing treaty abuse, the introduction of country-by-country reporting rules, improving dispute resolution mechanisms, and tackling harmful tax practices.

    Seychelles signed up to the BEPS multilateral instrument to make changes to its tax treaties in June 2017.

    The Seychelles has for the past two years received support from Sweden on BEPS, as part of a twinning program.

    Seychelles was this year to be peer reviewed on its compliance with the BEPS minimum standards on Action 5, Harmful Tax Practices, Action 6, Preventing Treaty Abuse, and Action 13, country-by-country reporting. In 2020, it will be reviewed on its implementation of recommendations on improving dispute resolution mechanisms.

  • UK Urged To Drop Plan To Extend Offshore Tax Limitations Period 29th November 2018
    The UK Parliament’s Economic Affairs Finance Bill Sub-Committee has proposed that provisions should be stripped from the Finance Bill that would extend the time limit on assessing offshore tax to 12 years. Currently the limit is four years. This can be extended to six years where a taxpayer has failed to take reasonable care, and to 20 years in cases where there is deliberately non-compliant behavior amounting to fraud. In a letter to the Chancellor on November 6, 2018, the chair of the Committee, Lord Forsyth of Drumlean, outlined the Finance Bill Sub-Committee’s interim conclusions on the draft Finance Bill 2018. It is due to table a report for parliamentary consideration shortly. In its letter to the Government, the Sub-Committee said: “There was deep and consistent opposition to this measure from witnesses to our inquiry, primarily because the impact would extend beyond the high net worth individuals at whom one might expect it was targeted. The Low Incomes Tax Reform Group were concerned that many individuals affected by clauses 33 and 34 would be elderly people on low incomes. They, together with several other witnesses, suggested the measure be withdrawn, or at least replaced by something more proportionate and targeted.” It noted that: “The only reason given for the extension in the consultation document was that offshore matters are complex and take a long time to resolve. Witnesses disagreed with this assertion.” “Pinsent Masons LLP noted that while a ‘complex offshore structure’ may cause delay, the powers would also apply where there was no complexity, or where only a small amount of tax is at stake.” It said: “‘Offshore’ does not equal complexity in the drafting of this measure: having a holiday home, shares in an overseas listed company, an overseas bank account, or small pension would be enough to bring a taxpayer within its scope.” “This could affect many thousands of taxpayers. Now that the Common Reporting Standard has been adopted by over 100 countries it should be more straightforward for HMRC to obtain any information it needs from overseas tax authorities. It is therefore difficult to understand why this proposal has been brought forward now.” “It is also unclear how the period of 12 years was arrived at. There was no consideration in the consultation of alternative time periods. […] The evidence we received emphasized that [existing] time limits should be sufficient in relation to both offshore and onshore matters.” “The draft prop …