Tuesday, February 5, 2019
The Seychelles says that the OECD has found the territory to have made sufficient reforms to comply with its BEPS Action 5 standard on harmful tax regimes.
In late January, the OECD announced that 44 jurisdictions had newly delivered on commitments to eradicate harmful elements in their tax regimes, either by abolishing them or making satisfactory amendments.
The Ministry of Finance said: "The Progress Report shows that Seychelles meets the requirements of Action 5 of the BEPS standard, following the assessment of eight of our preferential tax regimes by the Forum on Harmful Tax Practices (FHTP)."
The regimes reviewed in the Seychelles were: International Business Companies (IBC), Companies (Special Licenses) (CSL), export services under the International Trade Zone (ITZ), offshore banking (Segment 1 banking license), non-domestic insurance business, reinsurance business, securities business under the Securities Act, and fund administration.
"In order to meet the BEPS Action 5 recommendations, several fundamental legislative amendments had to be made to these regimes, which also necessitated redefining of the Seychelles tax system," the Ministry said.
For instance, the Business Tax Act was amended to move towards a territorial tax system. Further, the three percent concessionary tax rate for offshore banking business was removed. The tax exemption for reinsurance businesses was also abolished.
Additionally, the International Business Companies Act was amended to allow IBCs to carry on business in Seychelles, and the tax exemption clause under the IBC Act was removed.
Further, the Companies (Special Licences) Act has been amended to remove the 1.5 percent business tax concession and withholding tax exemptions applicable to CSLs. However, CSLs incorporated on or before the October 16, 2017, may still be able to enjoy these tax concessions and exemption until the June 30, 2021.
"In view of these amendments, Seychelles remains committed to uphold its adherence to international norms and best practices and will continue to monitor and supervise the new regimes in line with its mandate," the Ministry stated.