Key Takeaways
- Value Added Tax applies in Seychelles at a standard 15% rate, making it the main form of sales tax foreign-owned businesses encounter.
- Registration depends on a defined threshold, with voluntary registration available, and businesses must distinguish zero-rated, exempt, and taxable supplies when assessing liability.
- Non-resident suppliers may face specific obligations, including the appointment of VAT representatives, alongside regular returns, filing periods, and payment requirements.
- Recovering input tax is subject to restrictions, so companies should review their compliance position carefully before operating in the market.
Introduction to Value Added Tax (VAT) in Seychelles
Seychelles does levy a consumption tax. Value Added Tax (VAT) applies to most goods and services supplied within the country and to goods brought in across its borders, charged at a standard rate of 15% under the Value Added Tax Act 2010. The tax is administered by the Seychelles Revenue Commission, which oversees registration, returns, and refunds.
This guide explains how VAT works for a foreign-owned business: when registration becomes mandatory, what the rate covers, how zero-rated and exempt supplies differ, and the obligations that fall on non-resident suppliers. It is written for foreign investors, business owners, and their advisers weighing whether to incorporate a domestic trading entity here or to meet VAT duties on supplies made into the market.
Legal Basis: The VAT Act 2010 and How VAT Replaced GST
The governing statute is the Value Added Tax Act 2010, passed by the National Assembly in December 2010 and brought into force on 1 January 2013. Its purpose is narrow and clear: to impose and collect VAT on goods and services supplied locally or imported.
Before that date, the country ran a Goods and Services Tax (GST) dating from 2001. VAT replaced GST outright, moving the system to a multi-stage, destination-based model in which tax is charged at each point in the supply chain and ultimately borne by the final consumer.
The law has been amended several times since, including changes in 2012 and 2024, alongside statutory instruments that adjust the schedules of exempt and zero-rated items. You can read the consolidated text on the official legal database.
A taxable person, in the language of the Act, is anyone making taxable supplies who is registered or required to register. The regime is self-assessment based, which places the duty of accurate reporting on the taxpayer rather than the authority.
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VAT Registration Threshold and Voluntary Registration
Mandatory registration is triggered when the value of your taxable supplies meets or exceeds SCR 2 million over a 12-month period, a figure effective 1 January 2025. The test applies both prospectively, where there are reasonable grounds to expect the threshold will be crossed, and retrospectively, where it already has been.
Businesses below that level may opt in. Voluntary registration is open to firms making taxable supplies of at least SCR 100,000 and up to SCR 2,000,000.
To qualify for voluntary entry, you must meet four conditions:
- Make or intend to make taxable supplies
- Hold a fixed place of establishment in the country
- Keep, or intend to keep, proper accounting records
- Have a clean compliance history with the revenue authority
The two routes carry different filing rhythms. Compulsorily registered businesses submit VAT returns every month; those registered voluntarily file quarterly.
A person who fails to apply for registration when required, without reasonable excuse, becomes liable for additional tax equal to double the VAT payable from the day registration was first due.
Registration is made by application to the Revenue Commissioner using the VAT registration form, after a Tax Identification Number has been issued.
The Standard 15% VAT Rate
Most supplies attract the standard rate of 15%. This covers the bulk of goods and services sold for consumption within the territory, whether produced locally or imported.
On imports, the 15% charge is collected at the point of entry, regardless of whether the goods arrive by air, sea, or post. The tax base is the customs value, calculated as the CIF (Cost, Insurance, and Freight) value plus any customs duties and excise tax that apply.
Registered businesses must show VAT separately from the sale price on every invoice and receipt. This separation lets buyers who are themselves registered identify and recover the tax they have paid.
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Zero-Rated Supplies and Their Treatment
Zero-rated supplies are taxed, but at a rate of 0%. The distinction matters: because they remain within the VAT system, the supplier charges no tax to the customer yet keeps the right to recover input tax on related costs.
Schedule 2 of the Act lists what falls into this band. The main categories are:
- Exports of goods
- International services
- Financial services supplied to non-residents
- Certain health and education supplies
Input tax incurred in making zero-rated supplies is fully deductible. For that reason, an exporter whose turnover sits below the registration threshold is generally advised to register anyway, since doing so allows recovery of VAT on purchases and can produce a credit position.
Exporters seeking refunds face specific conditions. The business must report a monthly or quarterly VAT credit of at least SCR 10,000 for three consecutive months, file returns within 28 days of the supply, and draw at least 85% of its VAT-related turnover from exports. Approved refunds are processed within 45 days of filing.
Exempt Supplies vs. Taxable Supplies
Exempt supplies sit outside the VAT charge entirely. They are listed in Schedule 1 and include pharmaceutical products, infant formula, basic foodstuffs such as rice and lentils, and services covering education, health, and finance. Residential rent, domestic water and electricity, and local transport also fall into this group.
The practical consequence for a supplier is significant. A business dealing only in exempt supplies neither charges VAT nor recovers any VAT on its inputs, leaving that cost embedded in its margins.
| Feature | Zero-rated | Exempt |
|---|---|---|
| VAT charged to customer | 0% | None |
| Treated as taxable supply | Yes | No |
| Input tax recovery | Allowed | Not allowed |
| Refund possible | Yes | No |
To the final consumer the two look identical, since neither adds VAT to the price. The difference lands on the supplier, and it shapes whether registration is worth pursuing.
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Input Tax Credits and Recovery Restrictions
VAT-registered firms remit only the difference between output tax charged on sales and input tax paid on purchases. Where input tax exceeds output tax, a credit arises and a refund may follow.
Recovery is conditional on the purchase being used to make taxable supplies; costs tied to exempt supplies carry no credit. Several categories are blocked outright under Section 25 of the Act unless used directly in taxable supply:
- Passenger vehicles, spare parts, and related repair or maintenance
- Petroleum products
- Entertainment
- Accommodation
- Membership or entry to sporting, social, or recreational clubs
Where acquisitions serve both taxable and other supplies, the recoverable portion is apportioned. The allowed credit equals total input tax on the mixed acquisitions multiplied by the value of taxable supplies divided by the value of all supplies.
If taxable supplies represent more than 90% of all supplies in a period, the full input tax may be claimed without apportionment.
VAT Returns, Filing Periods, and Payment
Filing frequency follows the registration route. Compulsorily registered businesses file monthly; voluntarily registered businesses file quarterly.
Returns and payment are generally due by the 21st of the month following the period. Payment made in person is due by the 21st, while online or bank transfer payments carry a 23rd deadline.
Late payment is costly. A penalty of 15% applies, together with daily interest on the outstanding amount until the balance is cleared, under the Revenue Administration Act.
One timing rule applies before any VAT obligation arises: a company must register for tax purposes within 28 days of starting business operations or incorporating.
VAT Treatment of Non-Resident Suppliers and VAT Representatives
A foreign supplier required to register but without a fixed place of business in the country cannot register directly. Two steps are required: appoint a VAT representative who resides locally, and, if the Revenue Commissioner demands it, lodge a security.
The representative carries the full set of duties on behalf of the non-resident, including applying for registration, filing returns, and paying the tax. Registration is held in the name of the non-resident, and a representative acting for several principals must keep a separate registration for each.
The obligation to register reaches non-resident businesses supplying goods and services to customers located in the country once they reach the annual sales threshold. Foreign firms with a permanent establishment, and those supplying taxable products and services, fall within the same requirement to appoint a resident representative.
The revenue authority may require a foreign business to deposit security at the point of VAT registration, in addition to the representative appointment.
Practical VAT Compliance Considerations for Companies and Investors
The first question for an investor is which company type they hold. International Business Companies, registered under the IBC Act 2016 for holding and investment activity outside the domestic market, sit apart from the VAT system; domestic companies that trade locally register with the revenue authority and hold both a Business Registration Number and a Tax Identification Number.
A local company that intends to charge VAT must register before doing so. The sequence is to obtain a TIN, then complete and submit the VAT registration form.
Voluntary applicants face an extra step. The authority conducts a field visit to confirm that the business is genuinely making or about to make taxable supplies, operates from a fixed location, has begun trading, keeps proper records, and meets its other obligations, including cash register licensing.
Record-keeping must follow International Financial Reporting Standards (IFRS). Late or incorrect filing can bring fines, daily penalties, or prosecution, so accurate books are a practical necessity rather than a formality.
On imports, VAT paid at the border can be recovered by including it in the relevant VAT return, provided the goods support taxable supplies. The system is self-assessed, which means the responsibility for getting figures right rests with you. The SRC publishes guidance, including its VAT Guideline, and runs an advisory centre in Victoria for queries.
Conclusion
For a foreign business owner weighing a Seychelles presence, the practical pivot point is not the headline rate but the input tax recovery restrictions, because a business that cannot reclaim VAT on its costs faces a higher effective burden than the standard 15% figure alone suggests. Getting that analysis right before operations begin, rather than after registration, is the step that most determines whether the structure works financially. The non-resident supplier rules, including the potential obligation to appoint a local VAT representative, add a layer of administrative commitment that deserves equal scrutiny before any decision is made.
How Expanship Can Help Your Business in Seychelles
Expanship supports foreign-owned businesses with VAT registration, representative appointment, and the monthly or quarterly filing cycle, and extends that support across the wider obligations of running a company in the jurisdiction. We work with both domestic entities entering the VAT system and non-resident suppliers needing a local representative.
- Company formation, including domestic companies and IBCs
- Registered agent and registered office services
- Tax identification, VAT registration, and return filing
- Ongoing compliance and statutory deadline management
- Accounting and bookkeeping aligned with IFRS
- Banking introductions for newly formed entities
To discuss your VAT position or a wider incorporation plan, contact Expanship Seychelles.
Frequently Asked Questions
Registration becomes compulsory once taxable supplies reach or exceed SCR 2 million over a 12-month period, effective 1 January 2025. A business below that level may register voluntarily if its taxable supplies are at least SCR 100,000. Registration must also follow within 28 days of starting operations where the threshold is met.
The standard rate is 15%, applied to most goods and services supplied for consumption locally and to imported goods. On imports, the 15% is charged at entry on the customs value, being the CIF figure plus customs duties and any excise tax.
No. A non-resident required to register but without a fixed place of business must appoint a VAT representative who resides in the country and, if the Revenue Commissioner requires it, lodge a security. That representative handles registration, returns, and payment in the name of the non-resident.
Zero-rated supplies are taxed at 0% but remain inside the VAT system, so the supplier can recover input tax on related costs. Exempt supplies fall outside the charge altogether, and the supplier can recover nothing, leaving the VAT on its purchases as an absorbed cost.
Compulsorily registered businesses file monthly, while voluntarily registered businesses file quarterly. Returns and payment are generally due by the 21st of the following month, with online or bank transfer payments allowed until the 23rd. Late payment attracts a 15% penalty plus daily interest.
Yes, where the costs relate to taxable supplies, by claiming the input tax in your VAT return. Recovery is blocked for certain items, such as passenger vehicles, petroleum products, entertainment, and accommodation, unless they are used directly in making taxable supplies.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
