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Business Tax

What is Business Tax?
Business tax is generally a tax levied on the taxable income of a business; i.e., its assessable income less any allowable deductions.
Click here to get a copy of the Business Tax Act, 2009.

Who Pays Business Tax?
Generally, the owners of businesses are liable to pay business tax if their taxable income exceeds SR 150,000 for a particular tax year in respect of sole trader and partnership. Whereas a company is liable to pay business tax on any net profit that it derives. A Seychelles taxation year runs from 1 January to 31 December. However, taxpayers may request to have an alternative tax period apply to their business under Section 26 of the Act.

Types of Business Tax
Depending on your circumstances, business tax may be remitted in different ways. Most businesses will lodge an annual return for a tax year and this is treated as having made a self-assessment under Section 58. Some businesses must pay their tax as they go (PAYG) on a monthly basis or for some specified businesses the tax may be withheld before they receive payment from their business customers. These methods of payment are known as Pay As You Go Instalment and Pay As You Go Withholding respectively.
  1. Pay As You Go Instalment

    Pay As You Go Instalment is business tax paid “as you go” at a fixed monthly instalment and is designed to relieve taxpayers from the burden of a large tax bill at the end of the tax year.

    The tax is calculated on a provisional taxable income estimated to be derived in a tax year. In many cases, the provisional taxable income is based on previous years.

    The due date for PAYG instalments is the 21st of the month.

  2. Pay As You Go Withholding

    Pay As You Go Withholding is applicable mostly to specified businesses such as businesses in the construction industry (e.g. building contractors, carpenter, mason etc...)
    See full list of specified businesses to which Pay As You Go Withholding applies.

    The tax is deducted from the gross payments made to a specified business by Government, a public body or business that have engaged them to do the work. You must remit PAYG withholding amount to the Revenue Commission within 21 days of the month following the month in which you withheld the amount.
For example, XYZ Pty Ltd engages a maintenance contractor for SR 30,000 to repair a broken drain. XYZ pays the contractor on 2 February 2009 in satisfaction of the job. Because “maintenance contractors” are listed as a Specified Business @ 5%, XYZ is required to withhold 5% of the gross payment (SR 30,000 x 5% = SR 1,500). Furthermore, XYZ must remit the SR 1,500 to the Revenue Commission before 21 March 2009 which is 21 days after the month the withholding occurred.

Entities that do the following may also have withholding obligation:
  • Making payments to non-resident in respect of dividend, interest, royalty, natural resources amount, insurance premium or technical service fee.
  • Paying remuneration to a non-resident.
Except for payments to non-residents, both monthly Pay As You Go Instalment and Pay As You Go Withholding are accumulated as a credit and held by the Revenue Commission on behalf of the taxpayer. The credit is used to offset any business tax assessed in respect of that particular year. Any excess credit will be refunded to the taxpayer.

Annual tax return
An annual payment must be made (if a tax liability arose) together with the business tax return lodgement. Meaning, the business tax payable by a person for a tax year in respect of a business carried on by the person is payable by the date that the business tax return of the business for the year is due.

Withholding tax
Withholding tax is an amount withheld by the party making payment (the payer) to another (the payee) and paid to the Revenue Commission. The amount the payer deducts may vary, depending on the nature of the product or service being paid for. The payee is assessed on the gross amount, and the tax to be withheld (the withholding tax) is computed in that assessment. The purpose of withholding tax is to facilitate or accelerate collection, by collecting tax from payers rather than a much greater number of payees, and by collecting tax from payers within the Seychelles jurisdiction rather than payees who may be outside our jurisdiction.

Business Tax Rates
As from 1 January 2011, the Business Tax rate is 0% on the first SR 150,000 of taxable income in respect of a sole trader and a partnership business, 15% on the next SR 850,000 of taxable income and 33% on the remainder. Companies do not have a tax free threshold. The Business Tax rate is 25% on the first SR 1,000,000 of taxable income and 33% on the remainder.
For more business tax rates, click here.

Concessions on Business Tax
There may be concessions on business tax depending on the industry you are in. Concessions may apply if you hold
  • a Tourism Incentive Act (TIA) Certificate
  • an Investment Promotion Act (IPA) Certificate or
  • an Agricultural and Fisheries Act Certificate
  • a license as an importer/retailer operating an Exclusive Shop Outlet as authorized by the Government
  • a license as an importer/retailer operating as a Duty Free Shop as authorized by the Government
  • a registration under the International Corporate Service Providers Act 2003
  • a Company’s Special License under the Companies Special Licenses Act 2003
Find out more about business tax concessions.

The Self-Assessment System – Assessing your own tax liabilities
The Seychelles Tax System has since 1 January 2010 moved to Self-Assessment for the business tax return. This means that at the end of each business year, all businesses should complete a Self-Assessed Business Tax Return which was introduced in line with the Business Tax Act 2009 (Section 58). The Self-Assessment system gives taxpayers greater equity and fairness, increased certainty and simplicity. It places greater responsibility on the taxpayer to assess their tax debt or refund. It is therefore very important that all businesses are well acquainted with the system.

For more information on the Self-Assessment System, click here.

Self-Assessment for Business Tax
Upon setting up a business, either as a sole trader, partnership or company, all businesses in Seychelles need to register with Seychelles Revenue Commission (SRC) to become a registered taxpayer.

In 2010, SRC moved from the traditional way taxpayers was assessed (Business Tax Assessment) to a more modernized, simple and fair manner of assessing their return. This was done by introducing the Self-Assessed Tax system allowing all taxpayers to make their own assessment of their business and reporting their taxable income for the relevant tax period covered by their business, with permitted deductions and exemptions and calculations for their tax liability payable or net loss for the year.

For more information on Self-Assessment for Business Tax, click here.

Know more about
Exchange Of Information
Self-Assessment for Business Tax
The Self-Assessment System – Assessing your own tax liabilities
Value Added Tax
The Tax and Customs Agent Board (TACAB)
Lodgment of Partnership Business Tax Return
Read More>>
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