How will Value Added Tax (Vat) work on importation? |01 April 2013

All businesses both Vat-registered and non-Vat registered or individual importing goods will be liable to pay Vat at 15% at the point of entry (Customs).

How will Vat apply on importation?
As a general rule, any goods imported into the Seychelles is deemed a taxable transaction under the Vat Act 2010, regardless of the status of the importer, either a business (Vat-registered or not) or an individual and regardless of the nature of the transaction whether it is a commercial or personal importation.
Vat on importation is assessed by Customs Division and is paid at the point of entry. Vat at Customs is payable together with duties, levies, Excise tax and Cost Insurance & Freight (CIF) at Seaport, Airport and Post Office.

What is the time of importation?
An importation of goods occurs on the date the goods are entered for home use under the Customs Legislation or on the date the goods are brought into Seychelles whichever comes last.

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) = SR2000
• Custom duties (Trades tax + Excise Tax) = SR600
• Vat base = (2000 + 600) = SR2600
• Customs value + Customs Duty & other applicable taxes ) x 15%
   SR2600 X 15% (VAT) = SR390
Therefore Vat that the business is liable to pay at Customs is SR390/-
 
How will Vat apply on bonded warehousing goods?
Customs bonded warehousing permits the payment of Vat on import to be delayed. In such instances Vat will be applicable only when the goods are released for home use (placed on domestic market). Vat will be payable together with other Customs duties and other taxes at the time of release of the goods.

How will Vat apply on companies operating under the International Trading Free Zone (SITZ)?
Companies operating under the SITZ are considered to be operating out of Seychelles, so they are out of the Vat scope. But, in instances, when they sell taxable product on the domestic market, then the 15% Vat will be applicable considering that an importation has taken place.

Example: Indian Ocean Tuna Ltd
When IOT sells tuna cans with 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 vat@src.gov.sc. The Value Added Tax Act, 2010 is available on the Seychelles Revenue Commission website (www.src.gov.sc).