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How will Value Added Tax (VAT) Work on Importation?

As a general rule, any imported goods to the Seychelles will be treated as taxable transaction under the VAT Act 2010 regardless of the status of the importer, (be it a business (VAT registered or not) or an individual) or the nature of the transaction (be it commercial or personal importation).

VAT on importation is assessed by the Customs Division of the Seychelles Revenue Commission which is paid at the point of entry at Customs and is payable together with Customs duties at Seaport, Airport and the Post Office.

However, there are some exceptions as specified under The First Schedule (parts 1 and 2) of the Value Added Tax Act 2010, which exempt certain goods and class and categories of persons from paying VAT at the point of entry.

Which goods are exempted from VAT at importation?
The following are some example of goods exempted at the time of entry:

Electric bulb (energy saving) Milk (powder) Fish (fresh, frozen, chilled, slated or smoked) Edible oil
Meat (fresh, frozen or chilled) Infant Formula Vegetables (fresh or chilled) Lentils
Prepared Animal Fodder Rice Fruit (fresh or dried) Salt
Sugar Flour Newspaper, Magazines, Journals, Periodicals (personal use only) Goods of a value not exceeding SR3000 imported for personal use excluding cigarette and alcohol

N.B: The above list is not an exhaustive one.

Which class and category of persons are exempted from VAT at importation?
The following class and category of persons are exempted from VAT on their importation:
  • Private Educational Institutions on their educational equipment excluding motor vehicles, construction materials and reference books not for resale as authorized by the Ministry of Education;
  • Registered Religious organization and churches and presbyteries;
  • Seychelles People Defense Forces, National Arts Council, National Sports council, Central Bank, Seychelles Petroleum Company, and Seychelles Pension Fund;
  • Diplomatic, consular, international organization and other foreign dignitaries as recognized by the Ministry of Foreign Affairs;
  • Foreign government and International organizations on materials and equipment under and approved a technical assistance and programmes;
  • President and ex-presidents;
  • Farmers and fishermen (for specific items listed by the Ministry responsible for agriculture and/or fisheries);
  • Seychelles Agriculture Agency (only for imports meant in a requisite store), animal feed factory and persons importing goods for hatchery and abattoir purpose.
What is the time of importation?
An importation of goods occurs on the date the goods enter for home use (domestic market) under the Customs Legislation or on the date the goods are brought into the Seychelles whichever comes last. It is at this point that VAT will be collected at Customs.

What is the value of VAT on importation?
VAT on imported goods is applied on the value of import (Customs value) which is the CIF (Cost, Insurance, and Freight) + customs duties (trade tax and excise tax where applicable).

Example:
  • Customs value (C.I.F) = SR2 000
  • Custom duties (trades tax + excise) = SR 600
  • VAT base = (2000 + 600) = SR 2 600
  • (Customs value + Customs Duties & other applicable taxes ) x 15% = SR2 600 x 15% (VAT) = SR390
It is very important to note that levy is not included in the VAT base.

How will VAT apply on warehousing goods?
Goods entering a Bonded Warehouse are not subject to VAT. The VAT is due when the same goods leave the Bonded Warehouse. Customs warehousing delays the payment of import duties including VAT untill the goods are released for home use (to the domestic market). VAT is payable together with other Customs duties and other taxes at the time of release of the goods.
  • Bonded goods released for home use (domestic market) - are liable to VAT at 15% (if taxable).
  • Bonded goods released for exportation — are subject to VAT at 0%, as exports are zero–rated.
How will VAT apply on companies operating under the Seychelles International Trade Zone (SITZ)?
Companies operating under the SITZ are considered to be operating outside Seychelles, so they are out of the scope of the Seychelles VAT. But, in instances, when they sell taxable products on the domestic market, then the 15% VAT will be applicable, considering that an importation has taken place.

Example: Indian Ocean Tuna Ltd (IOT)

When IOT sells Tuna cans to local suppliers, it is considered as if the supplier has made an importation. Therefore, the supplier will have to prepare a bill of entry and pay the 15% VAT at Customs Division.

For more information
You can contact Seychelles Revenue Commission on hotline number 4293745 or email us at vat@src.gov.sc for more information about VAT.
The Value Added Tax Act, 2010 and all VAT related information is available here.


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