05.13.15

Seychelles and Qingdao promoting mutual trade and investment

Posted in Bilateral Treaties, Business and Economy, Double Taxation Agreements, Financial Services, Foreign investments, International Organisations, International relations, Seychelles infrastructure, Seychelles offshore jurisdiction at 1:16 pm by Robert Klien

Seychelles and Qingdao, a major port city of China’s eastern province of Shandong, have widely discussed trade and investment opportunities between entrepreneurs from both jurisdictions.

A 1-day business forum was held on May 12 in the northern part of the Seychelles main island of Mahé, where about 30 local companies and representatives of some 20 businesses from Qingdao could have business-to-business meetings and discuss the possibilities for cooperation in infrastructure, banking, import and export, shipping, and construction.

According to the Seychelles Investment Board (SIB), it had responded to the Qingdao delegation’s proposal to organise the forum as the group are currently on a tour of the Indian Ocean to establish business contacts and develop partnerships.

SIB’s Chief Executive, Rupert Simeon, told SNA that the Qingdao delegation have already been to Mauritius and are now heading to Sri Lanka.

It should be noted that a Double Taxation Avoidance Agreement (DTA) already exists between Seychelles and China allowing businessmen operating in the two countries to pay tax in one of the jurisdictions and avoid taxation in the other, aiming to encourage trade and investment between the two jurisdictions. Also, Seychelles is a member of both the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) trade alliances and was recently welcomed as the 161st member of the World Trade Organisation. So, there should be much interest from Chinese businesses especially in the offshore sector that are using the tax structures in place to invest in the region.

03.13.15

Seychelles Confirms Tax Amnesty

Posted in Business and Economy, Financial Services, Seychelles legislation, Seychelles offshore jurisdiction at 2:49 pm by Robert Klien

The availability of an amnesty on penalties and interest for businesses that have outstanding tax debts and returns has been confirmed by the Seychelles Revenue Commission (SRC).

Further to measures to boost tax compliance announced in the 2015 Budget, the Commission has implemented a debt recovery plan. This plan will apply to business tax arrears for tax years up to 2013 (for amounts payable in 2014), and for withholding tax, duties, and all other taxes, for payments due for tax years up to 2014.

To settle their outstanding tax as at December 31, 2014, or to submit outstanding returns, taxpayers have 3 options. The program offers:
a) a 100% waiver of penalties and interest on arrears cleared by May 31, 2015;
b) a 50% waiver of penalties and interest on arrears cleared by August 31, 2015;
c) a 25% waiver of penalties and interest on arrears cleared by October 31, 2015.

The Seychelles Revenue Commission is urging taxpayers to take advantage of the amnesty and settle their tax liabilities.

In order to complement the arrangements, there will also be a more aggressive stance on debt collection.

02.26.15

Multilateral Tax Cooperation Treaty signed by Seychelles

Posted in Double Taxation Agreements, International Organisations, International relations, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 7:28 pm by Robert Klien

On February 24, Seychelles became the 85th signatory of the Organisation for Economic Co-operation and Development’s (OECD’s) Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The Convention is a comprehensive multilateral instrument to tackle tax evasion and increase transparency. According to a statement made by the OECD, the signing therefore represents another important step in Seychelles’ efforts to improve its legal framework and practices as regards the exchange of information for tax purposes.

The Convention provides for all forms of administrative assistance, in tax matters, including the exchange of information on request and automatically; in tax examinations abroad and in plurilateral investigations; and in tax collection.

The OECD added that it has repeatedly called on all jurisdictions to sign the Convention and has asked the Global Forum on Transparency and Exchange of Information for Tax Purposes to report on progress made by its members in that respect.

02.14.15

Seychelles Climbs 7 Places in Press Freedom Index

Posted in International Organisations, Seychelles offshore jurisdiction, Seychelles' statistics at 7:37 pm by Robert Klien

Seychelles has climbed 7 places in the latest edition of the annual World Press Freedom Index. This index was released by the international organization called Reporters sans Frontiéres (Reporters Without Borders), RSF.

However, media experts say there is still much to be done to improve media freedom in the country.

Seychelles ranked 96th on the 2015 index, which examined incidents of reporters being killed, censored and harassed in a total of 180 countries around the world between October 15, 2013 and October 14, 2014.

In 2014, the jurisdiction was ranked only 103rd.

02.08.15

Fitch Affirms Seychelles at ‘B+’/’BB-‘; Outlook Stable

Posted in Business and Economy, Seychelles offshore jurisdiction, Seychelles' statistics at 7:32 pm by Robert Klien

Fitch Ratings has affirmed Seychelles’ Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘B+’ and ‘BB-‘ respectively. The Outlooks are Stable. The issue ratings on Seychelles’ unsecured foreign currency bonds have also been affirmed at ‘B+’. The Country Ceiling has been affirmed at ‘B+’ and the Short-term foreign currency IDR at ‘B’.

The affirmation and the Stable Outlook reflect the following key rating drivers: the rating balances Seychelles’ recent default history, fairly high public debt burden, a large current account deficit and limited economic diversification against high level of GDP per capita and standards of governance.

The current account deficit widened to an estimated 22% of GDP in 2014, from 15.5% in 2013, albeit primarily financed by foreign direct investment (FDI).

Imports rose sharply owing to a marked increase in public sector wages, an acceleration in private sector credit growth on the back of government programmes to support lending to households and SMEs, and higher FDI.

At the same time, foreign currency earnings weakened as tourism arrivals declined and tuna exports fell.

01.21.15

Seychelles provides Presumptive Tax Opt-Out Deadline

Posted in Business and Economy, Seychelles government, Seychelles offshore jurisdiction at 7:23 pm by Robert Klien

The Seychelles Revenue Commission (SRC) has provided a public ruling, effective for the 2015 tax year, to provide a deadline for businesses wanting to exercise their new right to opt out of the presumptive tax regime.

The presumptive tax regime was introduced from January 1, 2013. It aims to make it easier and less time-consuming for businesses to comply with their tax obligations. The new presumptive tax regime removes all obligations related to business tax and value-added tax (VAT).

Any business, including sole traders, partnerships, and companies, that is not voluntarily registered for VAT and has an annual turnover of less than SCR 1 million (USD 71,260) during a tax year is liable for a 1.5% presumptive tax based on that turnover.

However, a business now has the choice to opt out of the presumptive tax regime and instead be assessed under the normal business tax regime. According to the Seychelles Revenue Commission, businesses wishing to opt out should formally notify the SRC by April 30, 2015.

12.19.14

Seychelles Budget Increases Taxes

Posted in Business and Economy, Seychelles offshore jurisdiction, Tourism industry at 7:18 pm by Robert Klien

In his 2015 Budget Speech on December 15, Seychelles Minister for Finance, Trade, and Investment Pierre Laporte has had to announce further tax-raising measures, in order to ensure future fiscal sustainability.

The Government’s medium-term fiscal strategy, first put in place in 2008 following a default in debt payments and including an International Monetary Fund-agreed target to cut its debt-to-gross domestic product (GDP) to below 50% by 2018, has been thrown off course by global economic uncertainties.

As a result of those external pressures, both of Seychelles’ 2 major industries – tourism and manufacturing (canned tuna and brewing) – suffered slowdowns and provided lower business tax revenues. However, eventual tax collections have been rescued in 2014 by higher value-added tax (VAT) and import duty receipts held up by increased retail sales and domestic construction activity.

The Government’s revised projection for total revenue, excluding grants, in 2014 is USD 414.5 million, which is 7.6% higher than in 2013. Given the global economic situation, this is much more favorable fiscal outcome than could have been expected, Laporte said.

To bolster tax revenue, while also reducing excessive alcohol and tobacco consumption, Laporte is to hike excise duties by 20% on all drinks with an alcohol content in excess of 16%, and by 50% on all tobacco products. This is applied on both imported and local products.

Also, the Minister increased the levy on privately registered motor vehicles by 50% and doubled vehicle testing fees, while also raising road tax.

Furthermore, to facilitate payment of taxes, online tax services will be expanded in 2015 to include the submission of business tax and presumptive tax returns. Taxpayers will be able to register their businesses and update their business status and contact details online.

The Government will allow small businesses to choose either the presumptive tax system (based on 1.5% of their turnover), which was introduced in 2014, or follow the normal business tax system.

Laporte also announced changes to VAT for 2015.

Finally, the Government considers the international financial services sector as having significant potential. Laporte’s Ministry has recently initiated consultations with key stakeholders to develop a Financial Strategy for Seychelles. Progress has also been made in assessing the feasibility of introducing a framework for Islamic finance in Seychelles, with recommendations due in early 2015.

Laporte noted that the tougher stance of the OECD on offshore financial centers does not appear to have had a significant negative impact on Seychelles in 2014. The Government’s most immediate priority for the financial sector, however, is to restore Seychelles’ compliance with OECD standards on tax information exchange by mid-2015.

The Government has strengthened cooperation with the country’s international partners, and, apart from signing the agreed Foreign Account Tax Compliant Act intergovernmental agreement with the United States, Seychelles also expects to sign the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters early next year, following parliamentary approval of an amendment to the Seychelles Revenue Commission Act.

12.15.14

Seychelles’ Membership approved by WTO

Posted in International Organisations, Seychelles offshore jurisdiction at 6:59 pm by Robert Klien

Following the adoption of its terms of entry at the General Council meeting on December 10, Seychelles’ Accession Protocol was officially signed. The document was signed by World Trade Organization (WTO) Director-General Roberto Azevêdo and Seychelles’ Minister of Finance, Trade, and Investment Pierre Laporte.

In his speech, Azevêdo expressed his gratitude to the Government of Seychelles for this “historic achievement” and for sending “a clear signal to all its trading partners that it is ready to engage fully in the multilateral trading system and in the global economy”. He said that “Seychelles’ accession is another sign of the continued importance of the multilateral trading system.”

To reply, Laporte declared that “WTO membership will bring immense benefits to our economy, from businesses to consumers. The Seychelles’ Government and its people have been looking forward for so long to be part of this international family.”

Seychelles originally applied for WTO membership in 1995. The jurisdiction completed its accession negotiations on 17 October 2014, when the Working Party adopted the accession package, ad referendum.

Seychelles has until June 1, 2015, to ratify the deal, and will become a WTO member 30 days after it notifies the WTO Director-General that it has completed its domestic ratification procedures.

11.05.14

Seychelles climbs 2 positions in 2015 Doing Business Report

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

Seychelles has been ranked 85th out of 189 countries in the World Bank’s 2015 Doing Business Report, climbing an effective two places.

The report was published on October 29, 2014.

Due to a change in the way the scores are calculated, the latest scores could not be compared to the previous year’s, which led to the World Bank re-calculating all the scores from the 2014 Doing Business report for comparison purposes.

Although the Seychelles was in 80th place last year, the recalculations placed the jurisdiction further down in 87th place, with a total score of 62.05 out of 100.

Seychelles’ 2015 score of 63.16 percent has bumped it up by two places to 85th in comparison to the re-calculated 2014 score.

Seychelles’ 85th position places the archipelago 6th in the Sub Saharan Africa region.

First in the region is Mauritius, which is ranked 28th globally, while South Africa, ranked 43rd, and Rwanda ranked 46th, are 2nd and 3d in the region respectively.

The 2015 Doing Business Report once again ranks Singapore in first position as the country with the most favourable business environment in the world, unchanged from last year’s position.

The Seychelles Minister for Finance, Trade and Investment has expressed disappointment with this year’s ranking, primarily because in his view “the latest ranking fails to take into account the important progress that Seychelles has achieved in many areas over the past year.” He said: “Despite the improvement of two places, we are obviously overall disappointed that yet another report by a major international organization has failed to capture the reality on the ground”.

According to the Chief Executive Officer of the Seychelles Investment Board (SIB), the World Bank correspondent was not up to date with changes happening in the Seychelles. He made examples where access to credit had been improved, such as loan schemes with attractive interest rates for small and medium-sized businesses. He also added that there had also been a measurable improvement in both the registration of businesses and the time taken to get a new electricity connection. However, Simeon acknowledged that there is work to be done to if Seychelles wants to further improve its ranking.

11.01.14

Seychelles Seeks OECD Tax Transparency Endorsement

Posted in Business and Economy, International Organisations, Seychelles legislation, Seychelles offshore jurisdiction at 3:54 pm by Robert Klien

With a view to communicate measures aimed to enhance how the jurisdiction exchanges tax information with other territories in practice, Seychelles is preparing to submit a supplementary report to the Organisation for Economic Co-operation and Development (OECD) Global Forum.

In 2013, during Phase Two of the Peer Review Group rating process, the OECD rated Seychelles as non-compliant in certain areas, raising concerns regarding Seychelles’s tax transparency rules.

The Seychelles Minister of Finance, Trade and Investment, Pierre Laporte, met OECD representatives on the sidelines of the 7th Global Forum in Berlin from October 28-29 in order to update them on the new measures put in place to address the areas of non-compliance, and prepare for the submission of a supplementary report to the Peer Review Group for re-assessment.

At the same time, the Organisation for Economic Co-operation and Development has stated that Seychelles became one of the “early adopters” (by end-September 2017) of the Multilateral Competent Authority Agreement on the implementation of a new automatic exchange of information standard.

In accordance with the new standard, jurisdictions are obliged to obtain information from their financial institutions and automatically exchange it with other jurisdictions annually.

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