01.02.18

Tax Law changes approved in Seychelles

Posted in Business and Economy, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 8:33 pm by Robert Klien

At an extraordinary meeting of the Seychelles Cabinet in December, a number of legal and tax policy proposals were approved, continuing the jurisdiction’s progress in reforming its tax regime and bolstering its economy.

According to a Ministry of Finance statement that was released following the meeting: “Cabinet approved policies relating to the Progressive Income Tax Law. The aim of these policies are to simplify income tax collection. Cabinet also approved the amendment to the Excise Tax Bill. The amendments would harmonize the categories of business and persons entitled to fuel concessions under the Excise Tax Act 2009.”

Also, administrative changes were approved to the Seychelles Revenue Commission Act and the Customs Management Bill with a view to allow for the renaming of certain posts, as well as to allow for the creation of a Revenue Commission Board.

On December 13, 2017, the Executive Board of the International Monetary Fund (IMF) approved a new Policy Coordination Instrument (PCI) for Seychelles. The 3-year arrangement with the IMF will allow the Government of the Seychelles to receive intensive support with regard to developing and implementing pro-growth economic policies.

The previous review of the economy held by the IMF in October 2017 said that while the Seychelles has made remarkable progress on enhancing its finance and economy, it still faces vulnerabilities and pressures, as a small island economy in a challenging global economic environment.

11.26.17

Tax settings overhauled in recent Seychelles’ 2018 Budget

Posted in Business and Economy, Seychelles legislation, Seychelles offshore jurisdiction, Tourism industry at 8:39 pm by Robert Klien

The Seychelles Budget included numerous proposals to change the jurisdiction’s tax settings, including new corporate tax reliefs and the settings for a progressive personal income tax regime.

According to the Government of Seychelles, its proposals for a progressive income tax will mark the 3rd phase of reform efforts that began in April 2016, with the introduction of a higher personal income tax exemption, for those earning less than SCR8,555 (USD618) a month.

Under the new changes, the threshold will remain the same, but income up to SCR10,000 will be subject to a 15% rate; income up to SCR83,333 will be subject to a 20% rate, and a 30% rate will be levied on income above that threshold. Foreign individuals will not benefit from the tax exempt threshold which will be applicable on a monthly basis, in a move said to be to reduce the tax compliance burden.

Also, an alternative for small businesses from being taxed under the business tax regime was proposed. They can be subject instead to a flat fee of SCR3,000, for businesses with a turnover of not more than SCR500,000; or a flat percentage of 3% for those businesses with turnover between SCR500,000 and SCR25m. Those with a turnover greater than this will not be eligible. In addition, it was noted that Seychelles has offered a presumptive tax with a 1.5% rate since 2013.

In the Budget, it is proposed that the following businesses will no longer have 5% tax deducted at source (DAS): building contractors, maintenance contractors, mechanics, hirers or operators of plant and equipment, or hirers of buses.

Amendments are proposed to the Business Tax Act to clarify, first, that Seychelles will have a territorial tax regime and, second, tax on depreciable assets will be limited to the original cost of the asset.

From 2019, the following tax concessions for the tourism sector will be repealed:

  • accelerated depreciation and the 200% allowable deduction for marketing and promotion costs. Instead the Government is considering offering a 200% allowable deduction for employing a qualified Seychellois graduate holding a Certificate, Diploma, or Degree or higher from an institution endorsed by Seychelles Qualification Authority (SQA); a 150% deduction for emoluments paid by an employer to a Post-Secondary or Tertiary, who is in full-time education and in part-time employment, and 150% for a business paying for training endorsed by the Agency of National Human Resources Development (ANHRD).
  • for the maritime industry, “artisanal and semi-industrial fishermen” will no longer be included in the scope of the business tax regime; instead they will play a fee in addition to current license and registration fees.

The Government has proposed to amend the tax rules for landlords of residential buildings to replace the current 15% tax with a 3% tax on gross rental receipts.

These business tax reform proposals are proposed to be effective from January 2019.

In addition, the Government is to reintroduce legislation to establish an immovable property tax, having earlier shelved plans to introduce this tax from July 2017. Under the levy, a rate of 0.25% will be charged on the capital-improved value of property owned by all foreigners as from January 2018. The tax will be applicable for all foreign-owned residential, company-owned, and leased properties of more than 25 years. Owners must make a declaration between January and June 2018, with collections expected to start from October 2018.

In accordance with the Budget, changes to the International Trade Zone Act, 1995, will be considered for inclusion in the 2019 Budget. The rate of tax on plug-in hybrid vehicles will be lowered from 15 to 10%. The Budget also exempts from VAT funeral services and reduces customs duty on dietary supplements from 25 to 0%.

Finally, it was announced in the Budget that the Seychelles Revenue Commission’s (SRC’s) organization structure will be re-organized in 2018.

05.15.17

Seychelles alters Tax Exemption for 13th month salary

Posted in Business and Economy, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 7:16 pm by Robert Klien

The Seychelles Government has recently published legislation in the Official Gazette to amend the jurisdiction’s individual tax regime.

Published in the Official Gazette on April 13, 2017, the Income and Non-Monetary Benefits Tax Act (Exemption) Order, 2017, sets the value of 13th month pay that an employee can receive tax-free at SCR10,000 (USD733).

Payments in excess of this amount will be subject to tax at 15%.

04.06.17

Transparency Initiative Seychelles to fight corruption

Posted in Business and Economy, International Organisations, Seychelles offshore jurisdiction at 6:04 pm by Robert Klien

Transparency Initiative Seychelles was officially launched in the beginning of April. This is a new non-governmental organisation, a part of the global entity Transparency International (TI).

Chrystold Chetty, the chair of Transparency Initiative Seychelles, said that the group joined the international organisation as people in Seychelles are asking for more transparency.

The launch of Transparency Initiative Seychelles was done at the end of a 2-day workshop hosted earlier this week on illicit financial cash flows from Africa. Participants were from TI members from the region such as Nigeria, South Africa and Mauritius. The workshop countries explored ways to resolve the issue of money that comes illegally from African countries and how as members of TI they can lobby their respective governments to put in place measures and structures to stop the illicit financial flows.

Transparency International (TI) is working in 35 countries in Africa. Transparency Initiative Seychelles was set up in October 2016 as the newest member of the organisation.

At the opening of the workshop, the founder of TI Peter Eigen, said that the “TI was set up about 25 years ago with the idea to help stop international corruption.” He noted: “We have seen that many countries, in particular in Africa, suffer from systemic bribery by companies from Europe and the United States. We have to stop these companies from bribing the decision makers in Africa, in Asia and in Latin America.”

11.06.16

Seychelles’ financial survey reveals more education is needed

Posted in Seychelles offshore jurisdiction at 6:03 pm by Robert Klien

In accordance with the Seychelles’ first financial literacy survey, the majority of people in Seychelles know about financial products and services and have access to them, but do not know about how to use and evaluate these services.

The findings of the baseline survey were presented by Abel Motsomi of FinMark Trust, an independent organisation based in South Africa, which carried out the survey along with the Central Bank of Seychelles (CBS) and the local Financial Services Authority.

The objective of the study which was recommended as part of the Financial Sector Development Implementation Plan was to measure and provide credible benchmarks on financial literacy and capability.

Beggita Vital, the Payment Systems officer at CBS, said 562 interviews were conducted on Mahe, Praslin and La Digue, the three most populated islands in Seychelles.

The study showed that 94% of the participants have transacted with a bank and most knew about financial products and services available and had access to them. However, they were not necessarily knowledgeable about how to evaluate and use these services.

“Another common complaint that we receive at CBS by customers is that they were not aware that as guarantor of a loan, they are responsible to repay the loan in the event of a default by the borrower and this also came out of the study,” Vital said.

Other findings show that 94% of the people interviewed had transacted with a bank, and 87% wanted to improve their financial situation while 46% did not have a plan of what to do.

On the need for financial information, 38% felt they wanted to know more including how to save, invest and budget. While 83% of the people interviewed knew how much they earned or received, only 14% kept track of how much they lend.

The results of the study will be used to develop a national strategy for financial education in Seychelles.

09.20.16

Seychelles and India to exchange Tax Information

Posted in Seychelles offshore jurisdiction at 2:51 pm by Robert Klien

Signed last year, the tax information exchange agreement (TIEA) between India and Seychelles has entered into force.

The TIEA entered into force on June 28, 2016, following the completion of domestic ratification procedures by both countries.

The agreement will enable the Competent Authorities of Seychelles and India to provide assistance through exchange of information relevant to the administration and enforcement of the domestic laws of the countries concerning taxes.

The information will be provided by each jurisdiction’s competent authority on request.

“India and Seychelles will ensure that its Competent Authority has the authority to obtain and provide “information held by banks, other financial institutions, and any persons acting in an agency or fiduciary capacity, including nominees and trustees; information regarding the legal and beneficial ownership of companies, partnerships, collective investment funds or schemes, trusts, foundations, ‘Anstalten,’ and other persons.”

The TIEA also provides for a Mutual Agreement Procedure for resolving differences as regards its implementation or interpretation.

09.16.16

Seychelles is 36th World’s Freest Economy

Posted in Business and Economy, International relations, Seychelles offshore jurisdiction at 6:47 pm by Robert Klien

Seychelles was ranked 36th out of 159 countries and territories in the Institute’s annual Economic Freedom of the World report.

Top position was occupied by Hong Kong which became the world’s freest economy for the 22nd consecutive year. It was followed by Singapore. The other nations in the top 10 are New Zealand, Switzerland, Canada, Georgia, Ireland, Mauritius, the UAE, and Australia and the UK.

The rankings of some other major countries are as follows: the United States was 16th, Germany was 30th; Japan was 40th; South Korea was 42nd; France was 57th; and Italy – 69th.

05.15.16

Seychelles ready to support Sri Lanka’s probe on offshore bank accounts

Posted in International relations, Offshore Banking, Offshore Services, Seychelles government, Seychelles offshore jurisdiction at 2:16 pm by Robert Klien

The government of Seychelles is ready to cooperate with the Sri Lankan government in its efforts to investigate into fraud and corruption, especially with regard to offshore bank accounts and assets in the Seychelles.

The Seychelles is already cooperating with the Sri Lankan government through the Finance Investigation Unit in Seychelles with regard to investigations into any fraud and corruption.

Seychelles Environment, Energy and Climate Change Minister Didlier Dogley said that Seychelles has signed the OECD guidelines for offshore banking to keep offshore dealings transparent. So, all information on transactions can be inspected and checked by authorized bodies. He noted that owners have to be declared for each account opened in Seychelles. Earlier in other jurisdictions, people were able to open a briefcase and didn’t have to declare ownership, while this is impossible today as all jurisdictions are reviewed. The minister said that Seychelles is “one of the countries that is clean” as it is abiding by all international rules.

The Seychelles is ready to help the Sri Lankan government in investigating fraud and corruption. “We have made sure that we are not allowing the wrong people into our country. So if there is any investigation, Seychelles will cooperate as long as it is reciprocal on both sides,” the minister added.

04.09.16

Norway says DNB Bank must explain Seychelles policy

Posted in Business and Economy, Offshore Banking, Offshore Services, Seychelles companies, Seychelles offshore jurisdiction at 2:24 pm by Robert Klien

Norway’s biggest bank DNB must provide a written explanation of its policy of helping clients register offshore companies in the Seychelles, the Norwegian industry minister said in a statement on April 4.

Trade and Industry Minister Monica Maeland said: “DNB says this should not have happened and that the bank should not have participated.”

The Norwegian government is the bank’s top owner with a stake of 34%. DNB’s Seychelles activities were first reported by daily Aftenposten, quoting leaked documents from Panama-based law firm Mossack Fonseca.

The leak involves more than 11.5 million documents from the files of the law firm, revealing details of hundreds of thousands of clients in multiple jurisdictions.

DNB said in a separate statement it regretted assisting about 40 customers in establishing the offshore companies between 2006 and 2010, and that the practice had ended.

11.03.15

OECD re-rates Seychelles as “largely compliant”

Posted in International Organisations, Seychelles offshore jurisdiction at 2:39 pm by Robert Klien

Sixteen peer review reports were released at the recent plenary meeting of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes on October 29-30, 2015. The release of the reports follows reviews of those territories’ legislation for the exchange of tax information and their frameworks for the exchange of tax information in practice.

Along with Cyprus and Luxembourg, the Seychelles had previously been rated “non-compliant.” Following significant changes to its legal frameworks or practices, the jurisdiction has been assigned a new rating of “largely compliant.”

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