How will Value Added Tax (Vat) work on importation?


10-December-2012

Vat on importation is assessed by the Customs Division of the Seychelles Revenue Commission which is paid at the point of entry at Customs and is payable together with Customs duties at seaport, airport and the post office.

However, there are some exceptions as specified under The First Schedule (parts 1 and 2) of the Value Added Tax Act 2010, which exempt certain goods and class and categories of persons from paying Vat at the point of entry.

 

Which goods are exempted from Vat at importation?

The following are some examples of goods exempted at the time of entry:

Electric bulb ( energy saving)

Milk (powder)

Fish ( fresh, frozen, chilled, slated or smoked)

Edible oil

 Meat (fresh, frozen or chilled

Infant Formula

Vegetables (fresh or chilled)

Lentils

Prepared Animal Fodder

Rice

Fruit (fresh  or dried)

Salt

Sugar

Flour

Newspaper, Magazines, Journals, Periodicals (personal use  only)

Goods of a value not exceeding R3,000 imported for personal use excluding cigarette and alcohol

 N.B: The above list is not an exhaustive one

 

Which class and category of persons are exempted from Vat at importation? 

 The following class and category of persons are exempted from Vat on their importation:

·             Private educational institutions on their educational equipment excluding motor vehicles, construction materials and reference books not for resale as authorised by the Ministry of Education;

·             Registered religious organisation and churches and presbyteries;

·             Seychelles People’s Defence Forces, National Arts Council,  National Sports Council, Central Bank, Seychelles Petroleum Company, and Seychelles Pension Fund;

·             Diplomatic, consular, international organisations and other foreign dignitaries as recognised by the Ministry of Foreign Affairs;

·             Foreign government and international organisations on materials and equipment approved under a technical assistance and programmes;

·             President and ex-presidents;

·             Farmers and fishermen (for specific items listed by the ministry responsible for agriculture and/or fisheries);

·             Seychelles Agriculture Agency (only for imports meant in a requisite store), animal feed factory and persons importing goods for hatchery and abattoir purpose.

 

What is the time of importation?

An importation of goods occurs on the date the goods enter for home use (domestic market) under the Customs Legislation or on the date the goods are brought into Seychelles whichever comes last. It is at this point that Vat will be collected at Customs.

 

What is the value of Vat on importation?

Vat on imported goods is applied on the value of import (Customs value) which is the CIF (Cost, Insurance, and Freight) + customs duties (trade tax and excise tax where applicable).

Example:

·          Customs value (C.I.F) = R2,000

·          Custom duties (trades tax + excise) = R600

·          Vat base = (R2,000 + R600) = R2,600

·          Customs value + Customs Duties & other applicable taxes x 15%

                                                            R2,600 X 15% (Vat) = SR390

 

It is very important to note that levy is not included in the Vat base

 

How will Vat apply on warehousing goods?

Goods entering a Bonded Warehouse are not subject to Vat. The Vat is due when the same goods leave the Bonded Warehouse. Customs warehousing delays the payment of import duties including Vat until the goods are released for home use (to the domestic market). Vat is payable together with other Customs duties and other taxes at the time of release of the goods.

 

·          Bonded goods released for home use (domestic market) - are liable to Vat at 15% (if taxable).

·          Bonded goods released for exportation – are subject to Vat at 0%, as exports are zero-rated.

 

How will Vat apply on companies operating under the Seychelles International Trade Zone (SITZ)?

Companies operating under the SITZ are considered to be operating outside Seychelles, so they are out of the scope of the Seychelles Vat. But, in instances, when they sell taxable products on the domestic market, then the 15% Vat will be applicable, considering that an importation has taken place.

Example: Indian Ocean Tuna Ltd (IOT)

When IOT sells tuna cans to local suppliers, it is considered as if the supplier has made an importation. Therefore, the supplier will have to prepare a bill of entry and pay the 15% Vat at Customs Division.

 

For more information

You can contact Seychelles Revenue Commission on hotline number 4293745 or e-mail us at This email address is being protected from spambots. You need JavaScript enabled to view it. . The Value Added Tax Act, 2010 is available on the Seychelles Revenue Commission website (www.src.gov.sc).

 

Submitted by the Seychelles Revenue Commission

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