Value Added Tax (VAT) is a tax that is levied on the value added at each stage of the production and distribution process. VAT registration in Seychelles is governed by the Value Added Tax Act, 2010, and is administered by the Seychelles Revenue Commission (SRC).
One of the best ways to invest in the island nation is by forming a company there. Refer to Seychelles company formation for more information. Seychelles is a popular destination for overseas businessmen interested in starting offshore companies because of its favorable tax laws.
The former Goods and Services Tax was replaced with the VAT (GST). The VAT is 15% at the moment. Any person or business that carries out taxable activities in Seychelles is required to register for VAT if their annual taxable turnover exceeds Seychellois Rupee (SCR) 1 million. Taxable activities include the supply of goods and services in Seychelles, imports, and certain exempt supplies.
VAT REGISTRATION REQUIREMENTS IN SEYCHELLES
When a company is initially founded in Seychelles, VAT registration is not required; however, there are circumstances in which both local and non-resident companies must register. An organization is regarded as non-resident when its legal seat is not in this nation. This is essential to understand how VAT registration for non-resident corporations in Seychelles operates.
The requirement for resident and non-resident businesses in the Seychelles to register for VAT refers to:
- businesses delivering taxable supplies that are not exempt from value-added tax;
- businesses anticipating yearly sales exceeding the 5 million rupee threshold for VAT registration;
- non-resident companies supplying goods and services to customers in the Seychelles; and
- non-resident businesses reaching the annual sales threshold for VAT registration.
STEPS FOR VAT REGISTRATION IN SEYCHELLES
The main steps for VAT registration in Seychelles are as follows:
- Determine if you are required to register for VAT – You will need to determine whether you are carrying out taxable activities in Seychelles and if your annual turnover exceeds the threshold of SCR 1 million. If so, you will be required to register for VAT.
- Obtain a tax identification number (TIN) – You will need to obtain a TIN from the Seychelles Revenue Commission (SRC) before you can register for VAT. You can do this by completing the TIN application form and providing the required supporting documents.
- Complete the VAT registration form – Once you have a TIN, you can complete the VAT registration form. This form requires you to provide information such as your business name, address, nature of business, estimated annual turnover, and details of any directors or owners.
- Submit the VAT registration form – You will need to submit the completed VAT registration form to the Seychelles Revenue Commission along with any required supporting documents.
- Receive your VAT registration certificate and number – Once your application is approved, you will be issued with a VAT registration certificate and a VAT number. You will also be required to keep proper records of your business transactions and submit regular VAT returns to the Seychelles Revenue Commission.
DOCUMENTS REQUIRED FOR VAT REGISTRATION IN SEYCHELLES
- copies of the company licence;
- details on the tax representative (if one was appointed);
- the National Identity Number for sole proprietors and shareholders in partnerships registered in Seychelles;
- a copy of the registration paperwork (depending on the kind of organization),
- a list of the employees (if necessary), and
- the Revenue Commission’s standard application form.
Tax registration is necessary for new businesses. The National Tax Identity Number will be granted during this time. The certificate of VAT registration will then be issued.
After submitting the required documents, the VAT registration certificate is issued within one week.
NON-RESIDENT COMPANIES REGISTERING FOR VAT IN SEYCHELLES
Foreign businesses with permanent establishments in Seychelles and those who supply VAT-taxable products and services must hire a VAT representative. The applicant must live in Seychelles.
The Revenue Commission may in some circumstances, demand foreign businesses to deposit security upon registration for the value-added tax.
The minimal tax requirements are just one of the many benefits that a Seychelles offshore company may offer to overseas businessmen. A minimum of one shareholder of any nationality or place of residence may establish the firm.
One director must be chosen, and the company’s Seychelles business address must be registered. One can form a legal organization for just $1, and the capital requirements are likewise quite minimal.
The Seychelles IBC is a corporation that may be established for the development of general business activities, and it offers very favorable tax advantages.
This entity is eligible for a full corporate tax exemption as well as any other tax related to the business’s income.
VAT-RELATED REQUIREMENTS IN SEYCHELLES
After receiving a Seychelles VAT number, the organization or entity acquiring it will be subject to certain requirements. Among these are the collection of value-added tax and the creation and submission of VAT returns in compliance with the regulations set by the Revenue Commission.
To be eligible for a VAT refund in Seychelles:
- A company must report a monthly or quarterly VAT credit of at least 10,000 rupees for 3 consecutive months.
- VAT tax returns must be filed no later than 28 days after the supply was made.
- The refund will be processed within 45 days after the return is filed.
- A company must have exported as its primary activity (at least 85% of its total VAT-related turnover must come from exports).
BENEFITS OF VAT REGISTRATION IN SEYCHELLES
There are several benefits of VAT registration in Seychelles, including:
- Compliance with tax laws – Registering for VAT ensures that your business complies with the tax laws in Seychelles. This helps to avoid any penalties or legal issues that may arise from non-compliance.
- Improved business reputation – Registering for VAT can improve your business reputation as it shows that you are a legitimate and law-abiding business.
- Ability to reclaim VAT – Once registered, businesses can reclaim VAT paid on goods and services purchased for use in their business. This can help to reduce costs and increase profitability.
- Enhanced cash flow management – VAT-registered businesses are required to charge VAT on their sales, which they then pay to the Seychelles Revenue Commission. This means that they can claim back any VAT paid on purchases, resulting in improved cash flow management.
- Access to larger customers – Many larger businesses and government entities require their suppliers to be VAT registered, so registering for VAT can open up opportunities to work with these customers.
What happens after submitting the VAT registration form?
The SRC will do the following once you submit your VAT registration form:
- Acknowledge receipt of your form;
- Get in touch with you if there are any issues that need to be rectified;
- Send you a letter assuring you that your registration is in good standing;
- Provide you with a VAT sticker and your VAT registration certificate.
What is counted towards the registration threshold for VAT purposes?
The value of all VAT-taxable products and services that your company sold throughout the fiscal year is compared to the threshold for VAT registration.
Your yearly turnover for VAT purposes does not include the sale of any assets you have or of any items and services that are exempt from VAT.
Who is required to register for VAT in Seychelles?
Any person or business that carries out taxable activities in Seychelles and has an annual taxable turnover of over SCR 1 million is required to register for VAT.
How do I register for VAT in Seychelles?
You can register for VAT in Seychelles by obtaining a tax identification number (TIN) from the Seychelles Revenue Commission (SRC) and then completing and submitting the VAT registration form.
What are the benefits of VAT registration in Seychelles?
Some benefits of VAT registration in Seychelles include compliance with tax laws, improved business reputation, ability to reclaim VAT, enhanced cash flow management, and access to larger customers.
What is the VAT rate in Seychelles?
The standard VAT rate in Seychelles is 15%.
How often do I need to file VAT returns in Seychelles?
VAT returns must be filed monthly, quarterly or annually, depending on the size of your business.
What happens if I do not register for VAT in Seychelles?
Failure to register for VAT when required can result in penalties and interest charges.
Can I deregister from VAT in Seychelles?
Yes, businesses can deregister from VAT in Seychelles if their taxable turnover falls below the threshold of SCR 1 million. They can also apply for voluntary deregistration.
Can I claim VAT on imports in Seychelles?
Yes, businesses can claim back VAT paid on imports by including it in their VAT returns. However, they must provide supporting documents such as customs declarations and invoices.