Introduction
Seychelles, an archipelago nation in the Indian Ocean, is not just a world-class tourist destination — it’s also an increasingly attractive hub for international investors. One of the key drivers of this appeal is its evolving tax policy framework, which combines investor-friendly incentives with efforts to enhance compliance, transparency, and revenue generation. As the government of Seychelles implements reforms aimed at aligning with global tax standards, investors and entrepreneurs must understand the tax structure, obligations, and opportunities available in 2025.
This article explores the key features of Seychelles’ tax policies in 2025, including corporate tax, value-added tax (VAT), offshore tax benefits, and new digital reforms.
1. Corporate Income Tax in Seychelles
Seychelles applies a tiered corporate income tax system to domestic businesses. As of 2025, the tax regime is structured to encourage investment, especially in priority sectors such as tourism, agriculture, manufacturing, the blue economy, and the digital sector.
- Tax Rates:
- 15% on the first SCR 1 million of taxable income
- 25% on income exceeding SCR 1 million
These competitive rates make Seychelles an appealing jurisdiction for small and medium-sized enterprises (SMEs) and international companies looking to establish a regional base.
Five-Year Tax Holiday for Emerging Businesses
To boost innovation and entrepreneurship, Seychelles introduced a five-year corporate tax holiday for businesses operating in emerging sectors such as:
- Renewable energy
- Financial technology
- Aquaculture
- Eco-tourism
- Manufacturing
This incentive is available for businesses that register with the Seychelles Investment Board (SIB) and meet eligibility criteria, such as demonstrating innovation or sustainability.
2. Value-Added Tax (VAT)
VAT in Seychelles is administered by the Seychelles Revenue Commission (SRC). It applies to the supply of goods and services and the importation of goods into the country.
- Standard VAT Rate: 15%
- Zero-rated supplies: Exported goods, some financial and educational services
- Exempt supplies: Certain food items, healthcare, public transport
Businesses with an annual turnover above SCR 1 million are required to register for VAT. Input tax credits are allowed, meaning VAT-registered businesses can reclaim VAT paid on business-related purchases.
The SRC is enhancing its digital infrastructure to simplify VAT filing, reduce errors, and encourage compliance. The upcoming Taxpayer Portal, set to go live in late 2024, will streamline VAT reporting and refunds.
3. Offshore Tax Benefits
Seychelles has long been a favored jurisdiction for offshore business due to its zero-tax structure for International Business Companies (IBCs). While regulatory reforms have introduced greater transparency and oversight, key offshore advantages remain:
- Zero corporate tax on IBC income sourced outside Seychelles
- No capital gains tax
- No withholding tax on dividends, royalties, or interest
- No inheritance or estate taxes
These provisions make Seychelles attractive for global entrepreneurs seeking asset protection, wealth management, and international trade solutions.
However, reforms aligned with the OECD’s BEPS (Base Erosion and Profit Shifting) standards now require IBCs to demonstrate economic substance if they carry out relevant activities within Seychelles. This means maintaining a physical presence, hiring staff, or holding board meetings locally.
4. Personal Income Tax and Payroll Obligations
Seychelles applies a simplified personal income tax structure, often referred to as a “Pay-As-You-Earn” (PAYE) system.
- Employees: Tax is deducted at source by employers.
- Rates:
- First SCR 8,555 monthly income: tax-free
- Above SCR 8,555: taxed at 15%
- Above SCR 83,000: subject to a progressive surcharge (additional 5%)
Employers are responsible for remitting PAYE taxes monthly, alongside mandatory pension contributions to the Seychelles Pension Fund. Non-compliance may result in penalties.
5. Withholding Tax and Capital Gains
Seychelles imposes withholding taxes on non-residents under certain conditions:
- Dividends: 15%
- Interest: 15%
- Royalties: 15%
- Management fees paid to non-residents: 33%
There is no capital gains tax on the sale of property, shares, or other capital assets, a feature that significantly enhances the jurisdiction’s attractiveness for high-net-worth individuals and investment firms.
6. Digital Taxation and the Future of Tax Compliance
One of the most significant reforms in 2025 is the rollout of Seychelles’ new Tax Management System (TMS), a digital platform that includes:
- A taxpayer portal for registration, filing, and payments
- Real-time VAT and PAYE processing
- Integration with banking and customs data
This system is part of a broader initiative to modernize public financial management and improve domestic revenue mobilization. It aims to close loopholes, automate compliance, and simplify the investor experience.
7. International Tax Compliance and Anti-Avoidance Measures
In line with its commitment to global transparency, Seychelles has signed up for multiple international tax agreements, including:
- OECD’s Multilateral Instrument (MLI)
- Subject-to-Tax Rule (STTR) under Pillar Two of the G20/OECD tax reforms
- Automatic Exchange of Information (AEOI) with global tax authorities
These steps demonstrate the government’s efforts to combat tax evasion while maintaining investor trust and regulatory credibility.
8. Sector-Specific Tax Incentives
Several tax incentives are tailored to encourage sectoral investment:
- Tourism: Duty exemptions on hotel construction materials and tax rebates on eco-certified operations.
- Agriculture and Fisheries: Exemptions from VAT and import duties on farming equipment, boats, and cold storage solutions.
- Renewable Energy: VAT waivers on solar panels, energy-efficient machinery, and research equipment.
These incentives are administered through the Seychelles Investment Board and relevant ministries. Eligibility requires detailed project proposals and sustainability assessments.
9. Tax Filing and Penalties
Annual and monthly tax filings are mandatory for businesses, depending on their tax obligations. The SRC enforces strict compliance timelines:
- VAT returns: Monthly, due by the 21st of the following month
- Corporate tax returns: Due six months after the end of the financial year
- PAYE returns: Due monthly by the 21st
Late filing penalties range from SCR 1,000 to SCR 10,000, with additional interest on overdue payments. The new TMS will automatically generate reminders and calculate penalties to enforce discipline.
Conclusion
Seychelles’ tax policy landscape in 2025 is a mix of opportunity and modernization. The government’s dual approach — offering tax incentives to attract global investors while aligning with international transparency standards — positions the country as a forward-looking investment destination.
Whether you’re launching a fintech company, expanding your tourism brand, or managing offshore assets, understanding Seychelles’ tax structure is crucial. With a range of fiscal incentives, digital reforms, and simplified tax procedures, Seychelles is proving itself not just as a paradise for travelers, but also a smart choice for business.
