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Simplified Tax for Small Businesses - The Presumptive Tax

Improving voluntary compliance through simplification of the tax regime is a major objective of the Seychelles Revenue Commission. We want to make it easier and cheaper for businesses to comply with their obligations as taxpayers with a system that reduces compliance burden in terms of time, money and effort required. With this in mind, effective January 1 2013, a Presumptive Tax Regime has been introduced for small businesses with an annual turnover that is below SR 1 million. This includes sole traders, partnerships and companies not registered for VAT.

While the presumptive tax removes all obligations related to Business Tax and VAT, those related to employment (employers’ obligations under the Income and Non-Monetary Benefits Tax) still remain.

Frequently Asked Questions - The Presumptive Tax

Download
  1. Electronic Presumptive Tax Return Form
  2. Manual Presumptive Tax Return Form
  3. Presumptive Tax Guide
What is the rate of the Presumptive Tax?
The presumptive tax rate is 1.5% of the business’ annual turnover.
For Example:
  1. If a business makes an annual turnover of SR 750 000, the tax payable will be RS 11 250 (750 000 x 1.5% = 11,250)
  2. If a business makes an annual turnover of SR 1 million. The tax payable will be SR 15 000 (1,000,000 x 1.5% = 15 000)
How to determine the annual turnover of the business?
The annual turnover is determined on a cash basis. In other words on gross receipts derived from the activity. In Seychelles, the presumptive tax is based on the business annual turnover of the previous year. Example: the 2013 turnover is the tax base of the Presumptive tax 2014.

What are the benefits of the Presumptive Tax?
One of the main benefits of presumptive tax is that it reduces the taxpayer compliance burden.
  1. Easy to fill — The presumptive tax return is a simplified one-page return compared to the four-page Business Tax Return that other businesses have to submit along with their Profit & Loss Account and certified accounts if a company;
  2. Only one return — Small businesses are only required to file one single return per year. Due date is the 31st March;
  3. Only one payment — Small businesses are only required to make one payment per year, when they file their presumptive tax return. Due day is 31st March;
  4. Cheaper — No certification of account is required, unless the small business is a company;
  5. Simpler — The record keeping requirements are less burdensome for small businesses. Presumptive tax regime is based on cash accounting rules.
  6. Small businesses (other than ones listed below) no longer have to pay the Pay As You Go (PAYG) - Deduction At Source*, Business tax as well as VAT.
* Prior to 1 January 2013 (before the introduction of the Presumptive Tax) most of the small businesses (other than the ones listed below) were liable to the Pay As You Go (PAYG) - Deduction At Source system, where they had to use the DAS book each time they received a payment for their service. The recipient of these services had to deduct 5% from the payment of the service. Under the presumptive tax regime this is no longer necessary, except for the following categories of small businesses:
  1. Building contractor
  2. Maintenance Contractors
  3. Mechanics (either motor vehicle, marine or refrigeration)
  4. Hirers or operators of plant and equipment including sea vessels, Motor vehicle for transportation of goods or for towing
  5. Hirers of Public Omnibus
When is the first Presumptive tax payable and the Presumptive Tax Return due?
The first presumptive tax is payable on or before the 31st March 2014. This is also the date on which the presumptive tax return has to be filed.

Is it compulsory for all small businesses to pay the Presumptive Tax?
The presumptive tax is applicable for all businesses regardless of their activity and their status; provided their annual turnover is not above SR 1 million and that they are not registered for VAT. However, upon prior authorisation from the Revenue Commissioner if duly motivated, small businesses can opt to remain in the former business tax system whereby they will:
  • be liable to the normal rate of tax of 15% on their taxable income of between Sr150,000 to SR 1 million;
  • need to pay PAYG (Instalment) on a monthly basis based on forecasted revenue each year
  • have to lodge a self assessed business tax return by 31st March of each year together with Profit & Loss Account
  • have their accounts audited if a company
  • need to attach any amount of business tax due together with the business tax return when being lodged.
For more information
Please do not hesitate to contact our Advisory Centre on 4293741/4293742, Manager Provision of Advice on 4294937, Manager Registry on 4293726, Manager Returns and Payment Processing on 4294972 or Mrs Woodcock on 4293724.


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
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