The Seychelles Tax System
The Republic of Seychelles is one of the countries belonging to the Caribbean and Pacific Group of States. Traditionally, the economy of the Seychelles was based on agriculture. The major cultivated plants include bananas, cinnamon, vanilla, and other exported tropical fruits. Besides, the poultry breeding industry is also an actively developing economical sector.
The Seychelles jurisdiction is of a great interest for international business representatives and investors. This is due to the fact that the applicable corporate legislation of the Seychelles provides for the possibility of registering international companies, which are subject to the preferential tax schemes.
Seychelles Islands – taxation structure
The local tax legislation envisages two ways of levying state taxes, in particular:
- Taxation of local companies, which are engaged in commercial and economic activities on the territory of the state;
- Taxation of international companies, which operate outside of the state.
Features of the tax system and a set of governmental tools
The Seychelles jurisdiction, as well as any other international offshore area, features a specific regime of state taxation. The tax policy of the state is conducted basing on the fact that the fiscal legislation differentiates between the local and offshore subjects of taxation. Control and supervision in the field of taxation is performed by the Seychelles Specialized Incomes Commission.
Taxation of international offshore companies
The companies registered in Seychelles and possessing an offshore status (i.e. not carrying out any commercial or economic activity on the territory of the state) enjoy a zero rate of taxation. Such offshore companies have to pay only the annual fixed fee.
The amount of annual fees depends directly on the size of the authorized capital of an offshore company. In particular, the annual fees for offshore companies are calculated as follows:
- The amount of the authorized capital of the offshore company does not exceed 5 thousand dollars – the annual fee is $ 100;
- The company’s authorized capital is up to $ 50.000 thousand dollars – the annual fee is $ 300;
- The amount of the authorized capital of the company exceeds $ 50.000 – the annual fee is $ 1.000.
Taxation of the firms that possess a resident status
The income taxes, which are levied on the resident legal entities are charged in two ways, respectively:
- At the end of the relevant financial year, taking into account the incomes received at the source (in practice it is used, for example, when taxing companies, which are involved in construction). The amount of taxation is calculated based on the overall profitability of the company.
- With the use of a prepayment taxation scheme, which requires making fixed monthly payments. This scheme contributes to the optimization of taxation.
VAT or GST
In fact, GST is a tax on the generated revenues. The tax may be levied on the following activities:
- Provision of the professional services (legal support, accounting consulting, medical assistance, etc.);
- Selling imported products on the territory of the state, as well as selling certain domestic products (alcohol, tobacco products, etc.);
- Services provided in the tourism sector (restaurants and cafes, hotels and entertainment venues, car rental, etc.);
- The provision of transport and telecommunication services as well as the sale of water, electricity, etc.
The tax system of the Seychelles provides unlimited possibilities for organizing international offshore business. A favourable tax climate, which allows to optimize taxation and derive maximum benefits from carrying out business, serves the main incentive that attracts new offshore companies into the jurisdiction.
Visit other sections of the website and learn more about the other benefits of registering an offshore company in Seychelles. We possess many years of experience in dealing with this and other jurisdictions and we are ready to provide you with all the necessary assistance while registering a company in Seychelles.