- New CbC Reporting Obligations In Seychelles From 2020 5th June 2019
Seychelles has gazetted legislation for the introduction of new country-by-country reporting obligations that multinational entities will be required to comply with starting in 2020.
In line with the OECD’s recommendations in this area, multinational groups whose group gross consolidated turnover was EUR750m (USD843m) or greater in the preceding tax year must file a CbC report within 12 months of the end of any tax year ending December 31, 2019, or thereafter.
In addition, within three months of the end of that tax year, the group should report whether an entity resident for tax purposes in Seychelles is the ultimate parent entity of the group. If not, the entity must identify the UPE and the jurisdiction in which it is registered for tax and will file a CbC report.
A penalty of SCR20,000 (USD1,467) applies for those taxpayers who fail to comply with the new requirements. The penalty applies for wilful non-compliance, failure to correct errors or omissions in CbC reports filed, or for making false statements in CbC reports.
The regime has been transposed into domestic law via the Revenue Administration (Country-by-Country Reporting Multinational Enterprise Groups) Regulations, 2019 (Statutory Instrument 25 of 2019), published in the Official Gazette on April 23, 2019.
- Seychelles Introduces New Sugary Drinks Tax 16th April 2019
The Seychelles Revenue Commission has published the Excise Tax (Imposition of Sugar Tax on Drinks) Regulations, 2019, which provides for the imposition of a sugar tax on drinks effective April 1, 2019.
The levy does not apply to fresh local fruit drinks without any additives and plain milk.
It is levied on all other drinks listed in the regulations, including flavored milk, at a rate of SCR4 per liter if the sugar content of the drink exceeds five grams per 100 milliliters.
The Regulations were published in the Official Gazette on March 29, 2019.
- Seychelles Challenged On IBCs Tax Regime 14th February 2019
The EU’s Code of Conduct Group (Business Taxation) has written to authorities in Seychelles to warn that new provisions to the territory’s tax regime are considered harmful.
The letter, sent on February 1, 2019, notes the steps taken to bring the territory’s tax regime into line with international standards, taken in response to concerns earlier raised by the Group. It notes that Seychelles has delivered on its commitment to amend or repeal the following preferential tax measures for International Business Companies (IBCs), international trade zones, offshore banks, offshore insurance, special license companies, securities business under the Securities Act, and fund administration business.
However, the Code Group considers that changes to the tax settings for IBCs, which ensure that foreign income is exempt from tax, are equally harmful. Changes introduced from the start of this year provided that only Seychelles source income of a Seychelles IBC would be subject to tax; an IBC that earns only income overseas and derives no income from activities in Seychelles can avoid taxation entirely.
Challenging the provisions, the Code Group wrote: “Against this background, we would welcome to receive a commitment at a high political level that Seychelles will amend or abolish this regime by December 31, 2019, without any grandfathering mechanism.”
“Finally, the Code of Conduct Group would like to inform Seychelles that no further replacement with measures of similar effect or delays will be accepted when assessing at the beginning of 2020 whether the requested commitments will have been implemented.”
The letter to authorities in Seychelles was one of six addressed to offshore territories recently by the Code of Conduct Group, which was reviewing progress made by territories on reforming potentially harmful preferential tax regimes. Jurisdictions that fail to make the required changes may be placed on an EU list of non-cooperative tax jurisdictions.