New revisions in tax laws
December 30, 2021
The cabinet of ministers has approved revisions to the Business Tax Act, Immovable Property Tax, Income and Non-Monetary Benefits Tax Act and the International Trade Zone (Employment) Regulations.
This morning, the Director General for Taxes and Sectoral Policy, Ms. Seylina Verghese and Mr. Marcus Elizabeth, from the Financial Services Authority, met with the media to give further details on the revisions.
Business Tax Act
As of January 2022, the new rates for business tax will be in effect.
As was announced in the Budget Speech, 2022, delivered by Minister Naadir Hassan, on 12th November, before the National Assembly, the business tax rates will go down, as follows:
- 15 per cent on profits of up to R 1 million, instead of the 25 per cent
- 25 per cent on profits of above R 1 million, instead of the 30 percent
The new tax proposal will also be applicable to these following sectors; tourism, fisheries, casinos, International Corporate Service Providers, businesses listed on Seychelles Securities Exchange, and businesses linked to medical services.
The agricultural sector, will obtain a grace period on tax payment for three consecutive years, starting 2021. After this period, there will be a review on the tax modalities that will be implemented.
However, fishermen and other individuals in the fisheries sector will continue to benefit from the current exemption.
New rates for Allowable Deductions
Reduction of the accelerated depreciation rate on capital investment that reach up to 145 per cent in 5 years, apart from buildings. The rate will reduce to 100 per cent.
Tax deductions on salaries of employees graduated from professional centres will be 125 per cent. Previously, it was 200 per cent.
This percentage will also apply to the salaries of students from professional centres who are on part-time employment. Their rates will be reduced from 150 per cent to 125 per cent.
Immovable Property Tax (IPT)
More clarity is also being given to the Immovable Property Tax law which came into effect in January 2020. A new category of exempted foreign owned residential properties have been added and the revision will also bring more precision on what rate of exchange to apply when a property is bought in foreign exchange.
Under the new revision, the rate of foreign exchange on the date the Valuation Assessment is filed with the Chief Valuation Officer will apply.
A tax rate of 0.25% is payable under the IPT, on all foreign owned residential properties.
SITZ
The new revisions will allow for fairness and harmonisation of payments of compensation and overtime for Seychellois employees employed by companies registered in the International Trade Zone (SITZ).
Under the new revisions, Compensation and Overtime payments will not be taxed.
All Seychellois employees who have been paid their compensation and overtime during the year 2021, only, where tax has been deducted will be refunded.