The Seychelles Revenue Commission (SRC) is advising taxpayers to adhere to the new regulations related to the filing of the withholding tax and the residential rent tax return.
Following amendments made to the Business Tax Act, effective February 2024, taxpayers deriving income from the rental or leasing of a building or part of a building used exclusively for residential purposes, is liable to file a return named the ‘Business Tax Residential Rent Return’ on a monthly basis. Such return will be treated as a self-assessment return and the tax rate of 3% on the gross rental income remains unchanged.
Similarly, taxpayers liable to file and pay withholding tax applied on the gross amount of interest, dividends, royalties, technical and managerial service fees as well as natural resources, derived by a non-resident person from sources in Seychelles, for a particular month, shall also submit a withholding tax remittance form which is now defined as a return. Again, the person will be treated a as having made a self-assessment of the withholding tax for the month specified.
Given that the tax to be withheld varies based on the services being provided, to collect such tax, the payer, that is the person responsible for paying the fees to the non-resident, must withhold the tax from the gross payments made to the non-resident and remit same to SRC.
The payer must bear in mind the provision for permanent establishment under the act and the double taxation avoidance agreements DTAA signed by Seychelles, to determine the liability for withholding tax.
To facilitate the filing of returns, taxpayers must complete the prescribed Residential Rent Return and Withholding Tax Remittance Forms together with the newly introduced tax payment slip available in the downloads section of the SRC website at www.src.gov.sc or upon request via email to advisory.center@src.gov.sc
Taxpayers must ensure to lodge and pay the residential rent return or the withholding tax return on or before 21st day of the following applicable month. For example, for month of February 2024, taxpayers must ensure to file and pay the tax no later than 21st March, 2024.
As withholding tax and the residential rent is now defined as a return under the Business Tax Act, taxpayers are advised to commit to their obligations by filing and paying the respective taxes timely, as failure will result in additional penalties, interest and charges.