Seychelles

Rates and scope

The standard VAT rate of 15% is levied on all taxable supplies that are not zero-rated, made by a taxable person and on taxable imports made by any person. A taxable person refers to a VAT registered person or a person required to be registered under the Act.

A taxable supply is a supply of goods (immovable or tangible movable property, including animals, but not including money) or services that are not exempt and is made in the course or furtherance of an enterprise carried on in Seychelles. This also includes a deemed taxable supply under this Act.

A supply of goods means a sale, exchange, or other transfer of the right to dispose of goods as owner, including under a hire purchase agreement. A supply of services means anything done that is not a supply of goods or money, including the grant, assignment or surrender of any right and the making available of any facility or advantage.

VAT registration

Compulsory registration

The registration threshold (in Seychellois rupee/ SCR) is SCR5m. If the value of a person’s taxable supplies has exceeded this threshold during the past 12 months, or there are reasonable grounds to expect that the threshold will be exceeded during the following 12 months, the person must apply for registration.

Any reference to a ‘person’ means an individual, entity, partnership, trust, estate, Government body, or public international organisation.

When determining whether a person has exceeded the threshold, the Revenue Commissioner will ignore the sale of any capital assets (tangible or intangible assets having a useful life of longer than one year, excluding trading stock) and taxable supplies made solely as a consequence of the person selling the whole or a part of their enterprise or permanently ceasing to carry on the enterprise.

The Revenue Commissioner may also treat the value of taxable supplies made by an associate of the person when determining whether the threshold has been exceeded, if the commissioner is satisfied that it is appropriate to do so having regard to - 

• the enterprises carried on by the persons

• the way in which those enterprises are carried on

• the connections between the persons and their enterprises 

• any other relevant matter. 

The application for registration must be lodged in the prescribed form within 14 days of the person becoming required to apply for registration. Where a person is required to be registered, but has not yet lodged an application, the Revenue Commissioner may register such person from the beginning of the first period in which they were required to be registered.

Voluntary registration

Branch registration

Non-residents’ registration

Where a non-resident person meets the compulsory registration requirements but does not carry on their enterprise through a fixed place in Seychelles, the non-resident must appoint a VAT representative in Seychelles and may be required to lodge security, by bond, deposit, or otherwise, if required by the commissioner.

The VAT representative would be a person controlling the person’s affairs in Seychelles, including a manager of any business of such person, and is responsible for doing all things required of the non-resident person under the VAT Act, including applying for registration, the furnishing of VAT returns, and the payment of VAT.

Deregistration

A registered person who ceases to make taxable supplies must apply to the Revenue Commissioner for cancellation of their registration within seven days of the date on which the person ceased to make taxable supplies. A registered person who continues to make taxable supplies but no longer exceeds the threshold, may also apply to the commissioner for cancellation of their registration.

Where a person has not furnished regular and reliable VAT returns or has not complied with its obligations under other revenue laws and there are reasonable grounds to believe that the person will not keep proper records or furnish regular or reliable VAT returns in future, the Revenue Commissioner may cancel the person’s registration without application.

The person must pay output VAT on any goods on hand, other than capital goods, at the time of deregistration where the person was allowed an input tax credit on such purchases. The disposal is deemed to take place immediately before the person’s deregistration.

Output tax

Calculation of VAT

Exempt supplies

The following is a selection of supplies of goods or services that are exempt. The full list can be found in Part II of the First Schedule to the VAT Act:

• an import of goods if their supply in Seychelles would be an exempt or zero-rated supply

• certain listed food, medicine and other items imported or locally produced (e.g. meats, fish, fruit and vegetables)

• financial services by a person carrying on a business as a financial institution

• educational services including any textbooks or stationery supplied in relation to such services

• internationally donated goods or services to a non-profit body

• life insurance premiums, health insurance premiums, marine cargo insurance premiums, insurance premiums under the agriculture disaster and fisheries insurance scheme or a reinsurance contract by a person carrying on the business of a licensed insurer or reinsurer

• government hospital, medical and dental services including government ancillary services

• public utility services

• services for construction of residential dwellings, including renovation and extensions of such dwellings as well as the leasing or renting of such premises

• broadcasting services by a licenced service provider

• the transfer of land and rights therein

• the leasing of an asset subject to a financial lease as defined under the Financial Leasing Act, 2013.

Zero-rated supplies

The following is a selection of supplies of goods or services that are zero-rated. The full list can be found in the Second Schedule to the VAT Act:

• any goods manufactured in, or imported into, Seychelles for the purpose of export where the goods have actually been exported from Seychelles

• services supplied directly in connection with temporarily imported goods

• goods or services supplied by a business involved in the manufacture of petroleum products

• certain telecommunications services supplied to non-residents

• services supplied to a person who is outside Seychelles if: the services are directly related to land located outside Seychelles, the services are physically performed on goods located outside Seychelles or the services are advertising or electronic services in relation to an enterprise carried on by the person outside Seychelles

• a grant, transfer or assignment of a copyright, patent, licence, trademark or similar right for use outside Seychelles

• international transport services

• goods or services supplied as part of the transfer of an enterprise or part of an enterprise as a going concern by a registered person to another registered person under certain conditions

• transportation of cargo by sea to inner and outer islands

• port services, where the services are directly connected to international transport services or rendered to a non-registered person.

Input tax

Input tax allowed

A taxable person is allowed an input tax credit for the tax imposed on the acquisition of goods or services by the person to the extent that the acquisition was for the purposes of making taxable supplies.

The input tax credit is allowed in the VAT period in which the tax is paid, provided the taxable person holds the required documentation. Where the person does not yet have the documentation, the input tax credit is allowed in the first VAT period in which the documentation is obtained.

Input tax expressly denied

An input tax credit for the acquisition of the following items is not allowed:

• passenger vehicles, spare parts or repair services for such a vehicle, unless the person’s enterprise involves the dealing in or hiring of such vehicles and the vehicle was acquired for such purpose

• petroleum products, unless those products are wholly for use in the person’s enterprise

• items acquired for entertainment purposes, unless the entertainment was provided in the ordinary course of the enterprise carried on and was not provided to an associate or employee, or the entertainment was provided while the recipient was away from home for the purposes of the enterprise

• to the extent the acquisition is used to provide accommodation, unless:

  • the person’s enterprise involves providing accommodation and the accommodation was provided in the ordinary course of the enterprise or

  • the accommodation was provided while the recipient of the accommodation was away from home for the purposes of the enterprise

  • the acquisition provides membership or entrance for any person in a sporting, social, or recreation club, association or society.

Input tax denied based on supplies

Adjustments

Post supply adjustments are applicable if:

• a supply is cancelled

• the nature of the supply is fundamentally varied or altered

• the consideration for a supply is altered

• the goods (or part thereof) are returned to the supplier.

If the VAT properly chargeable exceeds the VAT actually accounted for by the supplier, the excess amount must be treated as output tax by the supplier. 

Where a debit note for the excess has been issued, the recipient must treat the additional VAT indicated as input tax paid in the period in which the debit note is received.

If the VAT actually charged by the supplier exceeds the VAT properly chargeable, the supplier is allowed an input tax credit for the excess amount unless the recipient is not a taxable person, in which case no input tax credit is allowed until the amount specified in the credit note is paid by the recipient. 

Where a credit note for the excess has been issued, the recipient must treat the additional VAT indicated as output tax paid in the period in which the credit note is received.

Preregistration and post-deregistration VAT

There are certain conditions under which a taxable person may claim an input tax credit for goods held, at the time of registration, for the purposes of making taxable supplies. 

The input tax may be claimed in the first VAT return furnished by the person after registration. 

If the person is not in possession of the relevant documentary evidence when the VAT return is to be furnished, no input tax credit is allowed in that period or any time in the future.

Post-deregistration, a person remains liable for any act done or omitted while they were a registered person in respect of the taxable supplies made by them.

International trade

Imports

Goods

Subject to certain exemptions, imported goods are subject to VAT at the standard rate of 15%. The value of an import is the sum of:

• the value of the goods for customs purposes, whether or not customs duty was actually paid

• the costs of insurance, freight and other ancillary or incidental services treated as part of the import, incurred in bringing the goods into Seychelles

• the amount of any customs duty, excise or other fiscal charge other than VAT or any fee or other charge paid in respect of the import.

If goods are reimported, after being exported, for the purpose of undergoing repair, renovation or improvement, the value of the import is the amount of the increase in the value of the goods as a result of the repair, renovation or improvement, provided the form or character of the goods has not changed and ownership of the goods has not changed since the goods were exported.

Services

An imported service is treated as a supply made by the taxable person themselves, but only to the extent that the input tax credit would be denied if the services had not been imported.

The taxable supply is made at the time the services are performed and is valued at either the fair market value, where the supplier and recipient are associates, or the value of consideration in any other case.

If a taxable person carries on an enterprise both in and outside Seychelles, the part of the enterprise carried on outside Seychelles is treated as if it were carried on by a separate person (the overseas person), who is not a taxable person. An internal provision of services from the overseas person to the taxable person is treated as imported services.

Exports

Refunds to foreigners

A visitor may claim a refund, at the time of his or her departure from Seychelles, of the VAT paid on certain taxable goods purchased from VAT registered persons in Seychelles, such as:

• articles or jewellery of precious metals

• precious or semi-precious stones (natural or synthetic or reconstructed)

• articles of natural or cultured pearls

• carpets: silk, woollen, dhurries and chain-stitch

• crafted artefacts, arts or sculpture

• manufactured fragrance or perfume

• manufactured toiletries or fashion accessories

• cosmetic items

• accessories — handbags, sunglasses, hats/caps, backpacks and shoes

• technological and electronic devices — computers, laptops, tablets, mobile phones, music players, walkie-talkies and storage devices.

The visitor claiming the refund shall present to the customs officer the unconsumed purchased goods for inspection along with their foreign passport, flight ticket or a valid boarding pass and VAT invoice.

No refund will be granted where the aggregate amount refundable is less than the administrative charge of SCR150.

Place, time and value of supplies

Place of supply

VAT is levied on supplies of goods and services made in Seychelles. A supply of goods is said to have occurred in Seychelles if the goods are delivered or made available in Seychelles. 

A supply of services occurs in Seychelles if the enterprise of the supplier, from which the services are being supplied, is situated in Seychelles. There are also specific rules that deal with situations that are not covered by the above but are still considered to be a supply made in Seychelles such as services that are physically performed in Seychelles by a person who is in the country at the time of supply.

Time of supply

A supply of goods or services generally occurs on the date any payment or part payment for the goods or services is made or the date the invoice is issued.

A supply between associates or by way of a gift occurs on the day the goods are delivered or on the day the performance of the service is complete.

A supply by means of a vending machine, metre or other device operated by money, is the day the money is taken from the machine.

If services are supplied by way of leasing goods, or progressively by way of periodic payments, the supply is treated as a series of separate, successive supplies of services corresponding to each relevant period. Supply is deemed to occur at the earliest each payment is due or received.

Value of supply

The value of a taxable supply made by a taxable person is the consideration for the supply reduced by an amount equal to the consideration multiplied by the tax fraction.

The value of any other supply is the amount of consideration. A supply that is ancillary or incidental to a supply of another kind is treated as part of the principal supply. Likewise, a supply that is ancillary or incidental to an import of goods is treated as part of the import.

The sale of goods under a hire purchase agreement is treated as separate supplies of goods and credit under the agreement, provided the credit is specified as a separate charge and is disclosed to the recipient of the supply.

VAT compliance

Display of registration

A registered person must display, in a conspicuous place, the original copy of its VAT registration certificate at its primary place of business and a certified copy of the registration certificate at every other place of business, if applicable.

A registered person must notify the Revenue Commissioner, in writing, of any change in the name (including business name), address, place of business, or nature of the enterprise of the person within 21 days of the change occurring.

Returns and payment of VAT

The VAT return must be submitted and payment made within 21 days after the end of each VAT period (VAT period being a calendar month), except in the case of an importation, where the VAT is paid at the time of the import.

A taxable person who has filed for voluntary registration must file a VAT return and make payment no later than the 21st of the months of April, July, October and January of any year.

All registered persons must submit a return electronically via the e-service platform as well as submit a duly signed hard copy of the return.

Interest and penalties

Where a person has incorrectly treated a supply as zero-rated or exempt, the Revenue Commissioner may assess both the supplier and recipient of the supply for payment of the VAT due in respect of the supply and any interest and additional tax imposed as a result of the late payment. Any amount subsequently paid by the supplier will be offset against the recipient’s liability and vice versa.

Where a taxable person fails to pay their VAT liability by the due date, they will be liable for interest and additional tax. 

A person who, without reasonable excuse, fails to apply for registration as required under section 7 will be liable for additional tax equal to double the amount of VAT payable for the period commencing on the day on which the person was first required to apply for registration and ending on the earlier of the day the person lodges an application for registration or the person is registered by the Revenue Commissioner on the Revenue Commissioner’s own motion.

Refunds

Where the total input tax credit exceeds the total output tax for the period, the excess may be carried forward to the next period. A refund may be claimed where:

• VAT credit has been carried forward to two consecutive VAT periods and exceeds SCRI0,000 at the end of the third VAT period by a compulsory registered taxable person

• a VAT credit exceeding SCRI0,000 is reported on the quarterly return by a voluntary registered taxable person

• unless otherwise applicable, a VAT credit exceeding SCR10,000 is reported on a monthly return by an exporter, supplier of zero-rated goods or services or investor during the commencement phase of the business activity

• the person is engaged in farming, fishing or operating supporting activities directly related to fishing and farming and is registered with either the Seychelles Agricultural Agency or the Seychelles Fishing Authority.

Subject to the above, a refund will be granted where a taxable person has claimed for a refund on a VAT return and has fulfilled all payment obligations.

Objections and appeals

A taxpayer dissatisfied with an assessment or revenue decision may serve the Revenue Commissioner with an objection, in writing, within 60 days of the notice of the decision. A taxpayer dissatisfied with an objection decision may then make an application to the revenue tribunal within 30 days of receiving notice of the decision.

Where a party to a proceeding before the revenue tribunal is dissatisfied with the tribunal’s decision on an objection decision, they may lodge a notice of appeal against the decision to the Supreme Court within 30 days of receiving notice of the decision.

Where a party is dissatisfied with a decision of the supreme court, an application to the court of appeal may be lodged.

VAT records

A taxable person who, for any reason, has not been issued with an original VAT invoice, VAT credit note or VAT debit note as required under the Act may make a written request to the supplier to issue the document.

The request must be made within 60 days of the date of the supply, in the case of a VAT invoice, or in the case of a debit or credit note, within 60 days of the date of the event that gave rise to the debit or credit note. Such a request must be complied with within 14 days of receipt.

The following documentation is required in order to claim an input tax credit:

• in the case of an import, a bill of entry or other documentation prescribed under the customs legislation

• in the case of a taxable supply, the VAT invoice for the acquisition

• in the case of an input tax credit allowed in terms of an adjustment, the debit note required to be issued

• in the case of an input tax credit allowed in terms of an adjustment, a copy of the credit note is required to be issued to the recipient.

VAT invoices

Amounts taken into account under the VAT Act must be expressed in rupees. Where an amount is expressed or paid in a currency other than rupees, the amount must be converted into rupees at the applicable exchange rate in terms of either the customs legislation, in the case of imports, or the Central Bank of Seychelles mid-exchange rate, in any other case.

The requirements of a VAT Invoice are as following:

• the words ‘VAT Invoice’ in a prominent place

• the name, address and the taxpayer identification number of the supplier

• the description of the goods (including quantity or volume) or services supplied and the date on which the supply was made

• the consideration for the supply and the amount of VAT charged

• the name of the recipient of the supply.

The original invoice must be issued to the recipient.

Credit notes and debit notes

A credit note must contain the following particulars:

• the words ‘VAT Credit Note’ or ‘VAT Debit Note’ in a prominent place

• the name, address and taxpayer identification number of the supplier

• the name, address and taxpayer identification number of the recipient

• the individualised serial number and the date on which the VAT credit note or debit note is issued

• a brief description of the circumstances giving rise to the issuing of the VAT credit note or debit note, including information sufficient to identify the taxable supply to which the VAT credit note or debit note relates

• where the debit note or credit note has been issued due to a supply being cancelled, the consideration for a supply being altered or the goods (or part thereof) being returned to the supplier: the consideration shown on the VAT invoice for the supply, the correct amount of the consideration, the difference between those two amounts and the amount of VAT that relates to the difference

• where the debit note or credit note has been issued because the nature of the supply has been fundamentally altered: the VAT originally paid, the VAT paid as a result of the circumstances giving rise to the issuing of the VAT credit note and the difference between those amounts.

An original credit note must be issued to the recipient.

Additional export documentation

The following documentary proof is considered sufficient evidence that goods have been exported, in the absence of proof to the contrary:

• the consignment or delivery of goods to an address outside Seychelles, or

• the delivery of the goods to the owner, charterer, or operator of a ship or aircraft supplying international transport services for the purposes of carrying the goods outside of Seychelles.

Record-keeping

The following documentation must be maintained by a taxable person for the purposes of the Act:

• original or copies of all VAT invoices, VAT credit notes and VAT debit notes received by the person

• a copy of all VAT invoices, VAT credit notes and VAT debit notes issued by the person

• documentation relating to imports and exports of goods by the person

• in relation to imported services, sufficient written evidence to identify the supplier and the recipient, and to show the nature and quantity of services supplied, the time of supply, the place of supply, the consideration for the supply and the extent to which the supply has been used by the recipient for particular purposes.

The documents must be maintained in chronological order.