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What Passengers need to know about Value Added Tax (VAT) when they travel?

Generally, Value Added Tax (VAT), which will come into force on 1 January 2013, is a tax charged on the sale of goods and services at a standard rate of 15 %, and also on the importation of goods, except those exempted under the VAT Act, 2010. This applies to businesses (VAT registered or not) as well as to private individuals importing for personal use or when travelling.

How will VAT apply on goods brought into the country when you travel?
Every passenger traveling with their purchases in their luggage (accompanied goods) are entitled to a duty free allowance when travelling either by air or sea. When VAT becomes operational in January 2013, this will not change. There will be no tax, including VAT, on the following accompanying goods as per the duty free allowance provided that the goods are not for commercial purposes:

  • 200ml of Perfume and Eau de Toilette;
  • 2 litres of alcoholic beverages containing less than or equal to 16% alcohol (such as beer, wine and sparkling wine);
  • 2 litres of alcoholic beverages containing more than 16% alcohol (such as whisky, rum, gin and fermented or distilled liqueur);
  • 250 grams of tobacco product or 200 cigarettes. Tobacco product includes but is not limited to cigars, cheroots, smoking & chewing tobacco and snuff; and
  • SR 5,000 worth of other goods.
  • 200ml of Perfume and Eau de Toilette; and
  • SR 3,000 worth of other goods.

What happens if a passenger brings goods in excess of the duty free allowance?
If a passenger brings accompanied goods in their luggage in excess of the tax free allowance, it is very important to note that the 15 % VAT will become liable on the excess goods. For example, if a passenger brings 4 bottles of alcoholic beverages of more than 16% alcohol content, then VAT, along with the other applicable taxes/import duties, will apply on the excess of the two bottles.

How will importation of commercial goods in luggage be treated?
Passengers, being engaged in a licensed business activity, who carry goods for commercial purposes in their luggage will be liable to the standard rate of 15 % VAT and the other applicable taxes/duties, unless the goods are exempted from VAT and the other taxes/duties even if those goods fall within the tax free allowance. Private individuals are not allowed to bring in goods for sale without a license.

How will goods sent as cargo / courier / parcel be treated under VAT?
Goods sent by cargo or courier/parcel either by air, sea or post (unaccompanied goods) which are for personal use only, excluding alcoholic beverages and tobacco, are exempted from VAT up to a Customs value of SR3000. The standard rate of 15% VAT will apply to any unaccompanied good valued in excess of the SR 3000 limit unless it is VAT exempt under the VAT Act.
If the accompanied goods are for commercial purposes then the standard VAT rate of 15% will apply.

What are some other types of exempted imports under VAT?
1. Personal effects for returning residents and graduates:
Importation of personal effects by returning residents or graduates is exempted from VAT. Personal effectsinclude clothing or other articles, but excludes alcoholic beverages, tobacco and vehicle.

2. Re-imported goods after repair:
In some instances, goods have to be sent overseas for repair, renovation or improvement and then re-imported. When the form and character of the goods have not been substantially changed by the process applied to them, the 15 % VAT will be charged only on the increase in the value of the goods after repair or renovation. The owner of the goods has to declare to Customs Division the nature and cost of the repair, renovation and improvement.

3. Imported goods under warranty:
Imported goods which have been supplied free of charge under warranty arrangement to replace imported goods, which have proved faulty or unsuitable for the purpose originally warranted are exempted under VAT. This is so, provided there is enough evidence of exportation of the faulty item and evidence to support the importation of the goods being supplied free of charge.

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

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