SeychellesTax Obligations Detailed

In Seychelles, employers have various tax obligations related to their employees' salaries and benefits. These obligations involve deducting specific amounts from employee pay and contributing additional sums on their behalf. It is crucial for employers to understand these requirements to ensure compliance with Seychelles tax laws.

Employer Contributions and Deductions

• Social Security Contributions: Employers contribute 10% of each employee's salary to the Seychelles National Provident Fund (SNPF). Employees also contribute 3% of their salary to the SNPF. These contributions fund social security benefits for employees.
• Income and Non-Monetary Benefits Tax (INMBT): Employers deduct 15% of employee emoluments for income tax. This rate applies to both Seychellois and non-Seychellois employees, regardless of their salary level. The tax on non-monetary benefits is also withheld by the employer at 20% for the value of the benefit, for example, housing or transportation provided by the company. This 20% rate applies to both Seychellois and non-Seychellois employees.
• Payroll Tax: There is no specific "payroll tax" outside of the categories of Social Security and INMBT outlined above.

Tax Rates and Thresholds

• Income Tax: For Seychellois citizens, the individual income tax rates are progressive, meaning different portions of income are taxed at different rates. These rates are 0% for income up to SCR 8,555.50, 15% for income between SCR 8,555.51 and SCR 10,000, 20% for income between SCR 10,000.01 and SCR 83,000, and 30% for income above SCR 83,000. For non-monetary benefits, a flat rate of 20% is applied to their value.
• Value Added Tax (VAT): While VAT is a consumption tax and not directly an employer obligation in the context of payroll, it's important to be aware of it. The standard VAT rate is 15%, applying to most goods and services. Certain essential goods and services are either zero-rated or exempt. Businesses with a turnover between SCR 100,000 and SCR 2,000,000 can voluntarily register for VAT. Businesses with a turnover exceeding SCR 2,000,000 must register for VAT.

Filing and Payment Deadlines

• INMBT: Employers must remit withheld income tax and non-monetary benefits tax to the Seychelles Revenue Commission (SRC) within 21 days after the end of the month the tax was withheld.
• Business Tax Return: All businesses, regardless of tax liability, must file an annual tax return by March 31st of each year unless an alternative tax year is approved by the Commissioner General.
• Presumptive Tax: Small businesses with an annual turnover below SCR 1 million are subject to presumptive tax at a rate of 1.5% of their turnover. The presumptive tax return and payment are due by March 31st each year.

Other Important Information

• Payroll Reporting: Even if no income tax is due (for example, if employee earnings fall below the taxable threshold), employers are still required to submit monthly payroll reports to the SRC.
• Record Keeping: Businesses must maintain records, including financial and payroll information, for seven years.
• Currency: The official currency in Seychelles is the Seychellois Rupee (SCR).
• Tax Year: The fiscal year in Seychelles runs from January 1st to December 31st.
• Minimum Wage: As of April 2016, the minimum wage for a 35-hour week is SCR 5,050 monthly, or SCR 26.70 per hour for continuous employment.

Note: This information is current as of February 5, 2025, and might change due to legal and regulatory updates in Seychelles.

In Seychelles, employee tax deductions primarily consist of income tax and social security contributions.

Income Tax

• Tax Rates for Citizens: A progressive tax system applies to Seychellois employees:
  • SCR 0 to 8,555.50: 0%
  • SCR 8,555.51 to 10,000: 15%
  • SCR 10,001 to 83,000: 20%
  • Above SCR 83,000: 30%
• Tax Rates for Non-Citizens: Non-citizen employees do not benefit from the tax-free threshold:
  • SCR 0 to 10,000: 15%
  • SCR 10,001 to 83,000: 20%
  • Above SCR 83,000: 30%
• Non-Monetary Benefits: Taxed at 15%. This includes benefits such as accommodation and utilities. Meal allowances are exempt. The tax is calculated based on the actual cost of the benefit.
• Tax Withholding: Employers withhold income tax from employee salaries and remit it to the Seychelles Revenue Commission (SRC) within 21 days of the end of the month.

Social Security Contributions

• Employee Contribution: 6% of the employee's gross monthly salary is deducted and remitted by the employer to the Seychelles Pension Fund.
• Employer Responsibility: Employers are responsible for deducting the employee's contribution and making the payment to the Seychelles Pension Fund along with their own employer contribution (employer contribution rate not provided).

General Information

Seychelles offers a relatively streamlined tax system, simplifying compliance for both employees and employers. The system ensures transparent deductions with mechanisms for employees to verify their contributions. It is crucial for employers to stay updated on the specific rates, thresholds, and regulations by regularly consulting official resources like the Seychelles Revenue Commission. This is crucial for accurate payroll calculations and compliance with the relevant tax laws. Staying informed on the specific rates, thresholds, and regulations pertaining to both income tax and social security is also essential for maintaining compliance with Seychellois employment regulations and tax laws.

Value Added Tax (VAT) in Seychelles is a consumption tax levied on most goods and services.

VAT Rates and Scope

• Standard Rate: 15% (effective since January 1, 2013) applied to most goods and services.
• Zero Rate: 0% applied to specific goods and services, primarily exports and certain essential items. This includes goods manufactured or imported for export, services tied to temporarily imported goods, certain telecommunications services to non-residents, and goods/services by petroleum product manufacturers.

VAT Registration

As of January 1, 2025:

• Compulsory Registration: Businesses with a taxable turnover exceeding SCR 5 million annually.
• Voluntary Registration: Businesses with a taxable turnover between SCR 100,000 and SCR 2 million annually.

A taxable person must notify the Seychelles Revenue Commission (SRC) of any changes in name, address, or business nature within 21 days of the change.

Filing and Payment

• Returns: VAT returns and Business Activity Statements (BAS) must be filed monthly for compulsory registered businesses and quarterly for voluntary registered businesses.
• Deadlines: Monthly returns are due by the 21st of the following month. Quarterly returns are due by the 21st of April, July, October, and January.
• Method: Returns can be filed electronically through the SRC e-service platform with a signed hard copy submitted.
• Payment: VAT payments must be made by the filing deadline. For imports, VAT is paid at the time of import.

VAT Refunds

• Mandatory Refund: Effective January 1, 2025, a mandatory VAT refund must be claimed if a VAT credit exceeds SCR 10,000:
  • for compulsory registered businesses if it's carried forward for two consecutive VAT periods and exceeds the threshold at the end of the third period, or
  • for voluntary registered businesses if a credit exceeding the threshold is reported on their quarterly return.
• Standard Refund: Businesses can also claim a refund if the credit on a VAT return is at least SCR 10,000 and supporting documents are available upon SRC request. Claims must be filled within the designated box of the VAT return and can not exceed the calculated credit. Refunds are processed within 45 days.
• Method: Refunds are typically issued via check or bank transfer.

Exempt and Zero-Rated Supplies

• Exempt Supplies: These are not subject to VAT. Examples:
  • Certain basic foodstuffs (e.g., rice, flour, lentils, local fish, salt, sugar)
  • Medicines and pharmaceuticals
  • Educational services and related materials
  • Financial services
  • Government hospital services
  • Imported periodicals not for resale if the value does not exceed SCR 1000.

Please note that this information is based on available resources as of February 5, 2025, and may be subject to change.

Seychelles offers a range of tax incentives for businesses across various sectors.

Corporate Tax Rates and Deductions

• Standard Corporate Tax: A progressive system is in place: 15% for taxable income up to SCR 1 million and 25% for income exceeding SCR 1 million. Certain sectors like banking and insurance have a higher rate of 33%.
• Tax Holiday for Emerging Businesses (2025-2029): A five-year tax holiday is available for new businesses in priority sectors like manufacturing, blue economy, and digital economy.
• Allowable Deductions: Various deductions exist for expenses like losses, repairs, depreciation, bad debts, contributions to the Seychelles Pension Scheme, and more.
• Special Deductions: Additional deductions are available for marketing and promotion expenses, up to 5% of taxable income, for registered agricultural and fisheries businesses.
• Accelerated Amortization on Software (2025-2029): Businesses can benefit from accelerated amortization on software acquisition costs, supporting digital transformation initiatives.

Sector-Specific Incentives

• Tourism: Incentives are offered under the Tourism Incentive Act 2003, though specific details are currently unavailable.
• Agriculture: Incentives are available under the Agriculture Incentive Act 2005, though further specifics need to be confirmed.
• Fisheries: Incentives are provided for the fisheries sector, but details are not readily accessible.
• Industries and Artisan: Incentives exist for these sectors, but further details require clarification.

Value Added Tax (VAT)

• Standard Rate: 15%.
• Zero-Rated Exports: Exports are zero-rated for VAT purposes.
• Exempt Supplies: Certain essential goods (e.g., pharmaceuticals, basic food items) and services (e.g., education, health, financial services) are exempt.
• Voluntary Registration: Businesses with taxable supplies between SCR 100,000 and SCR 2,000,000 can voluntarily register for VAT.

Other Tax Considerations

• Capital Gains Tax: Seychelles does not impose capital gains tax.
• Withholding Tax: Rates vary based on income type and recipient residency status. Further details require additional research.
• Individual Income Tax: A progressive system is used. Seychellois employees have a tax-free threshold of SCR 8,555.5 per month, while foreign individuals do not.
• Double Taxation Agreements: Seychelles has several Double Taxation Agreements (DTAs). It's advisable to consult official sources for an updated list of treaty partners and their provisions.

Please note that this information is current as of February 5, 2025, and is subject to change. Always refer to official government sources or consult with a tax advisor for the latest details.