Updated Requirements for Seychelles Economic Substance Reporting 2025
Further to our previous newsletters, the Business Tax (Amendment) Act has been updated to meet the European Union’s (“EU”) requirements on Economic Substance (“ES”) to facilitate Seychelles’ removal from the List of Non-Cooperative Jurisdictions for Tax Purposes (“EU Blacklist”). We are pleased to inform you that the Seychelles Revenue Commission (“SRC”) has announced that all Seychelles companies are now required to report whether they fall within the scope of ES for the 2024 financial year. Below is a summary of the ES reporting requirements.
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Tax exemptions for Foreign-Sourced Income
The exemptions from tax for foreign sourced income have been specified as follows:
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Profits of Seychelles companies generated by overseas permanent establishments are not taxable in the Seychelles.
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Foreign-sourced passive income (including dividend, interest, rent, and capital gains) is tax exempt in the Seychelles, provided the in-scoped company has adequate ES in the Seychelles.
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Foreign-sourced passive income from Intellectual Property will be taxed in the Seychelles, except for qualifying income from patents or equivalent.
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How to determine whether your Seychelles IBC falls in scope and needs to establish Substance
A Seychelles International Business Company (IBC) falls within the scope of ES if the company meets the following criteria:
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It is a member of a multinational group; and
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It derives passive foreign-sourced income in a given financial year.
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A member of a multinational group is defined as:
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Part of a group that includes two or more enterprises; and
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Multinational, meaning the tax residences of these enterprises are in different jurisdictions, or the group includes an enterprise that is resident for tax purposes in one jurisdiction and subject to tax with respect to business conducted through a permanent establishment in another jurisdiction; and
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Subject to accounting consolidation, where the ultimate parent company of the multinational group is required to consolidate accounts.
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ES Reporting requirements
As part of the reporting obligations, all companies must report to their Registered Agent whether they fall within the scope of ES (i.e., are part of a multinational enterprise) by answering a list of questions. If applicable, the company must also report the economic substance measures implemented in Seychelles.
We are ready to assist you with ES reporting. A dedicated email will be sent to our clients to collect the necessary information.
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