How does Value Added Tax (Vat) work at the point of sale?


16-January-2013

All customers should get a receipt when they make a purchase
As a customer, for any purchase of a good or a service you must receive in return a receipt or invoice.

For Vat purposes it is important that a customer insist on getting a receipt or invoice.

This receipt is your proof as customer that you have received the good or service and the price you have been charged for it. 

Only Vat-registered businesses are allowed to charge Vat and issue a Vat receipt/invoice.

It is illegal for non-Vat registered businesses to charge Vat on their sales. It is therefore a legal requirement that all customers get a receipt when they make a purchase (be it from a Vat-registered business or not).

The following information must be clearly displayed on the vat receipt or invoice.

• “Vat invoice” or “Vat Receipt” clearly indicated in a prominent place
• The name, address and Tax Identification Number (TIN) of the business

• The date on which the purchase was made
• A description of the goods purchased or services provided (including quantity or volume)

• The total price excluding Vat, the amount of Vat applicable to the sales
• The total price including Vat

• An indication of the goods which are exempt from Vat (e.g. rice and powdered full cream milk).

How do you know if the correct Vat amount has been charged?
It is a legal requirement that the prices publicised/displayed are the final prices to be paid by the customer.

 For instance in a shop prices displaced on the shelves or elsewhere (e.g. on the freezer doors) must indicate the final price that customer has to pay for the good. This means that the price displayed should be inclusive of the 15% Vat where applicable.

If the customer wants to know if indeed the correct amount of Vat has been charged on a particular item or service he/she will need to calculate the amount of Vat from the Vat-inclusive price.

How to calculate the Vat amount from the Vat inclusive price?
To calculate the Vat amount from the total displayed price (the Vat-inclusive price) the following formula must be used:
Price (being the displayed price) x   15
                                                               115
EXAMPLE 1:
If a customer wants to know what is the Vat component of the bottle of wine selling at SR119 (as displayed in the sample of the Vat receipt above) he/she must do the following calculation:
SR119  x   15   = SR15. 52
                 115
So SR15.52 is the amount of Vat that has been charged on the bottle of wine.

To find out the total Vat amount being charged on the receipt is indeed correct, simply add up all Vat inclusive price of all the taxable items (do not add up the price of exempt items) and then multiply it by 15/115.

No Vat should be charged on exempt items

Vat must not be charged on exempted goods and services even if the business is registered for Vat. Therefore, customers need to make themselves acquainted with the exempted list of goods and supplies. The list is available on the SRC’s website and SRC’s offices.

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. for more information about Vat. The Value Added Tax Act, 2010 and all Vat related information is also available on the Seychelles Revenue Commission website (www.src.gov.sc).

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