Seychelles News

  • 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.

  • Seychelles Brings Tax Perks Into Line With Int'l Standards 4th February 2019

    The Seychelles says that the OECD has found the territory to have made sufficient reforms to comply with its BEPS Action 5 standard on harmful tax regimes.

    In late January, the OECD announced that 44 jurisdictions had newly delivered on commitments to eradicate harmful elements in their tax regimes, either by abolishing them or making satisfactory amendments.

    The Ministry of Finance said: “The Progress Report shows that Seychelles meets the requirements of Action 5 of the BEPS standard, following the assessment of eight of our preferential tax regimes by the Forum on Harmful Tax Practices (FHTP).”

    The regimes reviewed in the Seychelles were: International Business Companies (IBC), Companies (Special Licenses) (CSL), export services under the International Trade Zone (ITZ), offshore banking (Segment 1 banking license), non-domestic insurance business, reinsurance business, securities business under the Securities Act, and fund administration.

    “In order to meet the BEPS Action 5 recommendations, several fundamental legislative amendments had to be made to these regimes, which also necessitated redefining of the Seychelles tax system,” the Ministry said.

    For instance, the Business Tax Act was amended to move towards a territorial tax system. Further, the three percent concessionary tax rate for offshore banking business was removed. The tax exemption for reinsurance businesses was also abolished.

    Additionally, the International Business Companies Act was amended to allow IBCs to carry on business in Seychelles, and the tax exemption clause under the IBC Act was removed.

    Further, the Companies (Special Licences) Act has been amended to remove the 1.5 percent business tax concession and withholding tax exemptions applicable to CSLs. However, CSLs incorporated on or before the October 16, 2017, may still be able to enjoy these tax concessions and exemption until the June 30, 2021.

    “In view of these amendments, Seychelles remains committed to uphold its adherence to international norms and best practices and will continue to monitor and supervise the new regimes in line with its mandate,” the Ministry stated.