Seychelles is preparing a global tax reform. This was stated by the head of the Ministry of Finance and Economic Planning of the Republic Maurice Lusto-Lalanne. The official noted that the authorities intend to revise tax rates for the main areas of business in the state. The government has already turned to the OECD for help in developing new rules.

What taxes have been in action in Seychelles?

Maurice Lusto-Lalanne said that Seychelles has a significant variation in taxation across sectors. This makes the state system unfair to certain areas of the economy.

Indeed, taxes for the tourism sector, agriculture and fisheries are quite low. The level of business activity in the areas is only 15%. Companies operating in these sectors have the option to not pay taxes if their profit does not exceed 250,000 Seychelles rupees (SCR), which is equivalent to 18,000 USD. Organizations operating under the Presumptive Tax regime with a profit of up to 1,000,000 SCR or 78,000 USD pay only 1.5% of the turnover. But the companies working according to the general system are forced to pay 30% of the sales tax with a similar profit.

Hi-tech companies, as well as financial institutions and insurers, suffer from high taxation. If their income does not exceed SCR 1,000,000, they are forced to pay 25% of the tax. If it exceeds, the rate rises to 33%. Corporate tax in Seychelles is 18.5% of total taxation.

What do they want to change?

Secretary-General for Financial Affairs of Seychelles Damien Tisse said that the republic plans not to raise tax rates, but to make them balanced. In particular, the official noted that companies that pay too low taxes may face higher rates. However, if organizations pay too much, for example, 30% of the turnover, the rate may be reduced for them.

Damien Tisse said that the OECD recommended lowering rates to 15% for income not exceeding 1 000 000 SCR and setting the norm at 25% for companies whose income exceeds the established values. In addition, the OECD proposes to expand the tax base, but at the same time to increase the list of trade benefits. Tisse noted that there is no exact deadline for completing the development of new tax rules. The government is now consulting with the OECD, after which the work will begin.

Law & Trust Law Firm offers services for clients working in Seychelles. Our lawyers keep abreast of developments regarding tax rules and their changes throughout the world. We will tell in more detail what exactly the Seychelles authorities want to change, and who will be affected by the innovations. Law & Trust lawyers will also help register a company, choose a favorable tax system, open an account and start a business in Seychelles.