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Tax Receipts
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Why do we need them?
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Tax receipts are key integrity measures under our taxation system. They form
an essential part of the audit trail and are important evidence that sales
have been made and expenditure has occurred.
Businesses are required to keep sufficient records so that assessable income
and allowable deductions of the business can be readily identified. Without
these records, a business cannot deduct any expenses from their assessable
income to derive at a taxable income.
Having no records to substantiate business expenses, or having incomplete
records, will lead to a higher taxable income and therefore more business
tax may be due.
To avoid disallowing business deductions, business will be required to adhere
to minimum record keeping standards.
Download BTR 2009-1 Recordkeeping - Tax Receipts
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Quick reference
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Tax receipts are only required for business to business transactions
and where the value of the supply is more than SR 2,500.
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Suppliers' obligation to provide tax receipts
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Suppliers of goods or services will be obliged to issue tax receipts
to recipients within 14 days after the recipient requests them.
Suppliers who fail to issue a tax receipt as required are liable to a
penalty. If a tax receipt is not provided by the supplier as a normal
incident of the transaction, the recipient should make a reasonable attempt
to request one.
If a tax receipt is not received within 14 days after the request, the
recipient should contact the Seychelles Revenue Commission for assistance,
providing details of the transaction and any attempt(s) to request the
document. Suppliers do not need to issue tax receipts if the value of the
supply is SR 2,500 (including GST) or less.
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Obtaining a tax receipt for your purchase
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If you want to claim your business purchase as a deductable expense
but your supplier does not give you a valid tax receipt within 14 days,
you can seek our permission to claim the expense by providing us with the
following information:
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your name and contact details
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documents relating to the purchase
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the name and address of the supplier
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the nature, purpose and quantity of the purchase
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the amount paid or payable
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the steps you have taken to obtain a tax receipt
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The Commissioner's discretion to treat a particular document
as a valid tax receipt
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If a particular document does not meet the requirements of a valid tax receipt,
subsection 181(3) of the Act give the Commissioner discretion to treat the
document as a valid tax receipt.
The discretion must be exercised in a balanced way that is consistent with
the Taxpayers' Charter and should give due weight to the importance of tax
receipts as key integrity measures. The discretion is not intended to allow
taxpayers to repeatedly avoid complying with clear requirements if they have
already been made aware of those requirements.
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What is meant by 'a reasonable attempt to request a
tax receipt'?
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The Commissioner will use his judgment in deciding what is reasonable after
considering all the circumstances of the case. Generally the Commissioner expects the recipient
to make a genuine attempt to contact the supplier and request the tax receipt.
However, the recipient is not expected to go to extraordinary lengths or great
expense to pursue the supplier for the document.
The Commissioner may need to make enquiries of the supplier or other parties in
order to obtain the necessary information about a transaction.
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Tax receipts for sales of more than SR 2,500
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Tax receipts for sales that total more than SR 2,500 (including GST)
must include:
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the words “tax receipt” stated prominently
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the date of issue of the tax receipt
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the name of the seller
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the business telephone number of the seller
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the name of the buyer
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the business telephone number of the buyer
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a brief description of the things sold
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the price of the sale
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What if you claimed a deductable expense without
having a valid tax receipt?
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If you claimed a deductable expense without having a valid tax receipt,
you can write to us explaining your circumstances and ask that the
invoice or receipt be treated as a valid tax receipt.
If we discover a claim of this nature, for example during an audit, we
will usually treat the invoices or receipts as a valid tax receipt and
allow its deductibility if you:
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are entitled to the deduction, and
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have made a genuine attempt to comply
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Do I require any documentation for purchases of
SR 2,500 or less?
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If you claimed a deductable expense of SR 2,500 or less you are still
required to keep records. However, these records do not have to comply with
the same criteria governing valid tax receipts.
For expenses of SR 2,500 or less, you are still required to keep records that
show a clear audit trail if you want the expenses to be deductable. The
required audit trail could be satisfied by, for example:
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dockets, receipts or invoices which fall short of satisfying the criteria
of a valid tax receipt, and in limited circumstances
- contemporaneous notes, or
- diary entries
Nevertheless, any audit trail must as a minimum be able to identify the
supplier, the date of issue of the goods or services and a description of the
goods or services purchased. It is unlikely that any expense will be deductable
under Section 40 (the allowable deductions provision) if these elements cannot be readily verified.
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When does this start?
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The rules surrounding valid tax receipts will come into effect on 1
July 2009. This will give time for suppliers to organise their stationary
and other requirements.
Any expenses incurred after the date of effect will be subject to these new
rules.
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More information
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You are encouraged to contact the Revenue Commission if you require more
information in relation to this Public Ruling. You may also download the full
ruling here.
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