Value Added Tax (Vat)-Registration procedures for new businesses |23 January 2012

In our last article about Vat registration we talked about Vat registration for existing businesses. This week we will look at Vat registration for new businesses. Just like existing businesses, new businesses will also be able to register for Vat and enjoy the benefits of being in the Vat system.

How can a new business know whether it is required to register for Vat or not?
New businesses will be asked to indicate their intention with regards to Vat registration on the general taxpayer registration form when registering with SRC for the first time.
 
When completing the form, new businesses will be asked whether they will:

1. Be making taxable supplies (selling goods or services which are not exempted under the First Schedule of the Value Added Tax Act, 2010); and

2. Be expecting to make an annual sales turnover exceeding the Vat threshold of R5 million for the year 2012; or

3. Choose to register for Vat on a voluntary basis if they do not expect their business annual sales turnover to be within the Vat threshold.

If the business will be making taxable supplies and its annual sales turnover for 2012 is expected to fall within the Vat threshold, the Vat Act makes it mandatory to register for Vat and as such they will be registered on a compulsory basis.

If the business will be making taxable supplies but its annual sales turnover for 2012 is expected to fall below the Vat threshold, the Vat Act does not make it mandatory to register for Vat. However the business will have the option to register on a voluntary basis.

It is important to note that if the entire operation of the new business will not involve the making of taxable supplies, then regardless of the annual sales turnover of the business, the business will NOT be registered for Vat – not even on a voluntary basis.

When can a new business register for Vat?
It is a requirement that all new businesses register as a taxpayer with SRC within 14 days of commencing the business. As of February 1, 2012, SRC will start to register businesses for Vat and therefore when new businesses will come to register with SRC they will also be able to register for Vat.

Business that choose not to register for Vat when they come to register with SRC for the first time (in view that the business’ expected annual sales turnover will be less than the VAT threshold) can always register for Vat on a voluntary basis at a later date.

The business will have to notify SRC during the course of the year of its intention to register for Vat. Registration must be done either:

• At the end of or during the year if the business annual sales turnover has exceeded the Vat threshold; OR

• At the beginning of the next tax year if it is expected that the business annual sales turnover will exceed the Vat threshold.

Which documents are required for registration?
All businesses registering with SRC for the first time will need to provide SRC with:

• The National Identification Number of the owner if a sole trader or the Public Officer if a company or the Senior Partner if a partnership)
• A copy of the business license
• Information of the tax agent (if one has been appointed)
• A list of all employees (if applicable)
• A copy of partnership registration (if applicable)
• Company registration/trust deed (if applicable)

Once registered as a taxpayer the business will be issued with Vat Taxpayer Identification Number (TIN) and in addition, if registered for Vat (either on a compulsory or voluntary basis), will be issued with a Vat registration certificate.

All businesses registering for Vat (including new businesses) from February 1, 2012 will be issued with their Vat registration Certificate in June 2012. Those which register for Vat from July 1, 2012 will be issued with their Vat registration certificate 1 week following the application lodged with SRC.

For more information
You can contact the Seychelles Revenue Commission on 4293745 or email us at advisory.center@src.gov.sc.

The Value Added Tax Act, 2010 is available on the Seychelles Revenue Commission website (www.src.gov.sc).

Submitted by the Seychelles Revenue Commission