Seychelles is an insular state with attributes of a reliable offshore jurisdiction. The tax regime attracts foreigners in setting up all sorts of companies and businesses in complete privacy and with the guarantee that their assets are protected. There are though a few business structures where a corporate tax is imposed, but if you would like to know information in this sense and in matters of company registration, you may talk to our company formation consultants in Seychelles.
If you need information about Seychelles and the corporate tax rate applicable on a case-to-case basis, our agents are at your service.
Taxation in Seychelles
The Seychelles taxation system is made of direct and indirect levies just like in the case of most countries in the world. It implies the imposition of taxes on natural persons and companies on the incomes they make, but also on the goods and services purchased.
The following taxes need to be considered in Seychelles:
- the personal income tax which imposed on the earnings obtained by natural persons,
- the corporate which is the most important levy applied to companies,
- the branch tax which is imposed to foreign companies with operations carried out through branch offices in Seychelles,
- the value added tax which is imposed just like in other countries on the sale of goods and services,
- the trade tax which is an import duty applied to the goods entering the country,
- the immovable tax which is levied on property ownership in Seychelles and is paid by both natural and corporate persons.
No matter the type of taxes to be paid in Seychelles, these will be levied based on the residence of a natural person or company.
Out of all these, for companies in Seychelles, the corporate tax rate is the most important.
For questions about the taxation of companies, you can rely on the support of our company formation advisors in Seychelles.
What to consider about the Seychelles corporate tax
The corporate tax in Seychelles is also known as the business tax and it is imposed on the taxable profits of a company. For this purpose, a business is assessed on the income it generates and the corporate tax is then computed. It is worth noting that deductions are not taken into consideration upon the calculation of the business tax.
There are several aspects that apply to certain businesses paying the Seychelles corporate tax and the rate it is applied at. Special requirements apply to sole traders and partnerships registered in the insular state. These will be imposed with the tax only if they exceed a 150,000 SR income in a calendar year. With respect to sole proprietorships and partnerships, the following requirements apply:
- – a 0% tax rate is applied for the first 150,000 SR;
- – a 15% tax rate is applied for the next 850,000 SR;
- – the standard 33% applies for amounts exceeding 850,000 SR.
Compared to these, any other domestic business is subject to the corporate tax on their entire net profits generated in a year. The financial year in Seychelles starts on January 1st and ends on December 31st. However, it is possible for corporate income taxpayers to apply for a different tax year, in accordance with Section 26 in the Business Tax Code.
If you need any advice with respect to the corporate tax and its calculation, our specialists are at your disposal with detailed information.
Corporate taxation based on residency in Seychelles
If we are to consider Seychelles and the corporate tax rates, given the fact that branch offices of foreign enterprises are levied at different rates, residency is one of the most important aspects when it comes to taxation in the insular state.
In order to be deemed a resident company, a business entity must have a legal address or a management place in Seychelles in order to be deemed a domestic company. Then, there is the case of offshore companies that are registered in the insular state but offer their services exclusively outside it.
When it comes to the corporate tax rate in Seychelles, domestic businesses are imposed on their worldwide profits, while those registered in other countries but with operations here will be taxed on the profits they generate in Seychelles.
Should you need details on the taxation of companies in Seychelles and the corporate tax rate applied to them, the standard one ranges between 25% and 33%.
Opening an offshore company in Seychelles is the attention of our local representatives and if you need information or assistance in setting one up, do not hesitate to ask for our support.
Payment of the business tax in Seychelles
The Seychelles corporate tax rate is set at 33% and the payment of the levy can be done in two ways:
- – through the Pay As You Go (PAYG) Installment;
- – through the Pay As You Go Withholding system.
Most domestic companies choose to file annual returns based on which they are considered to have made self-assessments and pay their tax on a monthly basis. This is the PAYG Installment, and it implies splitting the corporate tax into smaller fixed amounts paid once a month. This system enables such companies to avoid large sums of money being paid at the end of the financial year.
For this purpose, the corporate tax is computed based on an estimated income. In most cases, a provisional income relies on the profits generated by the company in the previous years. The monthly installment is due on the 21st of the month.
The second option for paying the corporate tax is the Pay As You Go Withholding system which is usually available for businesses in certain industries. Among these are the construction and maritime sectors. In their case, the tax is deducted from the gross payments made by the clients hiring these companies to complete various works. Under this system, the PAYG must be remitted to the Revenue Commission within 21 days of the following month since the money was withheld.
If you need accounting services, our specialists are at your service. They can help you compute the Seychelles corporate tax at the specific rate applicable to your line of business.
How are business tax self-assessments made in Seychelles
In order to pay the corporate tax in Seychelles, a business must register for taxation with the Revenue Commission. This also applies to sole traders and partnerships which, as seen above, must submit tax returns if they exceed 150,000 SR in revenue. However, after the new Business Tax Law enabled in 2009, the tax authorities have also modernized the tax registration system which is now simple and easy to use.
Through this system, businesses would be able to submit their own tax returns and report the taxable income for a specific period of time. Through the PAYG system, business owners can also access the tax deductions and exemptions they qualify for.
There are also other things to consider when preparing and filing tax assessments in Seychelles. One of the exceptions refers to companies that have been inactive but remain registered with the Companies House during a financial year. These are required to file their tax returns with a letter attesting to the reason of inactivity.
Tax returns must be filed within 3 months from the end of the financial year, thus the last day to lodge them is March 31st. However, in the case of companies requesting for a different calendar year, the date can be different (this is usually the case of new companies in their first year of activity).
Foreign investors who open onshore or offshore companies in Seychelles and who do not want to spend time with tax administrative aspects can rely on the services provided by our company formation consultants.
Corporate tax for Seychelles limited liability company
Limited liability in Seychelles are known as proprietary companies and can be established by any nonresident investor who provides a minimum share capital of 1 USD. This type of structure can operate in any field in Seychelles as long as it respects the rules and regulations imposed in the chosen business. As for the corporate tax for a proprietary company in Seychelles, this is set at 33%.
Branches and the corporate tax in Seychelles
If you are looking for a fast incorporation and business development, you can direct your attention to a branch set up in Seychelles. Besides the formation process of a branch for which two registered agents are necessary, the owners must observe the corporate tax which at the moment is set at a rate of 33%. As for the special license company in Seychelles, these are subject to a 1.50% corporate tax rate. More information in this direction can be obtained from our company incorporation specialists in Seychelles who can also provide you with the essential assistance and details about the time of company registration with the authorities in charge.
Special considerations for the taxation of companies in Seychelles
When it comes to Seychelles and the corporate tax rate, it is levied differentiated as it follows:
- – for the first 1 million SCR a rate of 25% is available,
- – the 33% rate is applied for profits starting with 1 million SCR,
- – in the case of special license companies, a 1.5% rate applies,
- – small enterprises with a turnover below 1 million SCR, a 1.5% rate applies.
Small domestic companies can also opt for a shared taxation regime with both the low and the standard corporate tax rate in Seychelles.
Withholding taxes applied to companies in Seychelles
Part of the Seychelles corporate taxation system are also the incomes derived from dividend and royalties payments. Also, interest payments are also subject to withholding taxes in Seychelles.
These are levied based on the residence of the shareholders and are influenced on the double tax treaties signed by Seychelles.
The following rates apply in the case of withholding taxes levied in this insular state:
- – dividends are imposed with a rate of 15% when paid to non-residents,
- – interests are imposed with a rate of 15% when paid to non-residents, while other rates are available to Seychelles residents,
- – royalties are subject to a 15% withholding tax rate.
When it comes to interest payments to residents, these can be taxed at rates of 0%, 15% or 33% depending on the provisions of Seychelles double tax agreements.
If you need any legal services, our specialists in Seychelles are at your disposal for immigration or property purchase procedures.
Offshore companies are exempt from the corporate tax rate
Offshore companies or IBCs (International Business Companies) as they are called, are the preferred business entities for foreigners who want to protect their assets because there is a special tax regime imposed and several exemptions. It is good to know that Seychelles enforces no corporate tax for offshores registered in the insular state. There is no need for audit requirements or annual tax returns, and the offshore company in Seychelles can run easily on the market, supervised by the shareholder outside the country.
Assistance in corporate taxation matters in Seychelles
If you have a company or want to start a business in Seychelles and wonder about the corporate tax rate, our experts are at your service with information, but also with accounting services such as financial statement preparation and filing and tax optimization solutions.
If you want to invest in Seychelles, it is useful to note that the country ranked 100th in the World Bank’s Doing Business Report in 2020.
For a better understanding of the company formation in Seychelles and the tax regime for the available structures, we invite you to contact our team of company incorporation agents in Seychelles.