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Obligations of a VAT registered Business under the VAT Act 2010

Under the Value Added Tax Act, 2010, a VAT registered business will have certain obligations in their dealing with the Seychelles Revenue Commission. Under the VAT Act, 2010, a business will be mandatorily registered for VAT if its annual turnover is or is expected to be equal to or exceeds the VAT threshold of SR5million. It is the obligation of those businesses meeting this requirement to ensure that they are VAT registered when VAT becomes operational on 1 July 2012. The Revenue Commissioner has the power to register a business which qualifies for registration but fails to comply.

Businesses which do not meet this VAT threshold requirement may register voluntarily for VAT provided that they can meet the VAT obligations as stipulated under the VAT Act 2010. It is important to note that a voluntary registered business has the same obligation under the VAT Act, 2010 as a compulsory VAT registered business.

The obligations of a VAT registered Business
  1. Keeping and maintaining VAT records
    All VAT registered businesses must keep and maintain full and true records of all business transactions including invoices which affect their VAT liabilities. There is no set format for keeping records but they must be kept up to date, indicating the VAT invoice received and VAT invoice issued. They must be detailed to enable accurate calculation of liabilities or repayments. All records and accounts must be preserved for a period of 7 years from the date of the latest tax period to which they refer.

  2. Issuing of VAT Invoices, VAT Credit and Debit Notes
    A VAT registered business is obligated to issue a VAT invoice, VAT credit and debit note (if applicable) when supplying goods or services to another VAT-registered business and to ensure that it charges VAT at the right rate on all the taxable supplies. Note that only VAT registered businesses can issue valid VAT invoices, VAT credit and VAT debit notes.

  3. Disclosure of VAT information
    VAT registered businesses are under the obligation to disclose and produce all relevant information, records and documents when required by SRC in a timely and useful way. They must notify SRC of any changes affecting the registered business. They are also under obligation to maintain high levels of integrity in their dealings with

  4. Calculating VAT liability
    Under the self assessment system, A VAT registered business is responsible to determine its tax liability. The VAT registered business must take reasonable care to ensure that its calculation is genuine and accurate. It is the responsibility of VAT registered businesses to correctly determine the amount of tax that has to pay and to remit the correct amount to SRC on the due date.

  5. Submitting a VAT return
    Every VAT registered business will be obligated to ensure that it’s VAT return and declaration represent a full and true disclosure of its tax status. A VAT registered business must file a VAT return within 21 days following the tax period in which taxable transactions occurred. It is entirely the responsibility of the VAT registered business to ensure that correct details are given in relation to taxable supplies, exempt supplies and zero rated supplies and the records represent the correct value of all business transactions

Offences under VAT Act 2010
Below are some specific offences and, if committed will attract specific fines and penalties.
  • Failure to register when required by law and failure to inform SRC of any change impacting registration or VAT status
  • Failure to display a VAT certificate and failure to issue proper VAT invoices
  • Irregular issuance of VAT invoice, credit or debit notes and using of false invoice, credit and debit notes
  • Irregular invoicing and/or collection of VAT by non registered taxpayer
  • Failure to pay VAT and lodge a VAT return on time
  • Underreporting of VAT liability and over reporting of input credit
  • Failure to maintain proper records, book keeping and failure to submit records when required by SRC.
For more information
You can contact Seychelles Revenue Commission on 4293737 or email us at advisory.center@src.gov.sc.
The Value Added Tax Act, 2010 is available here.

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