Tax on rented houses to stay under new Business Tax Act |28 December 2012

As from January next year however, this tax will be transferred under the Business Tax Act and will still be at 15% for local landlords.

This has been announced by the Seychelles Revenue Commission (SRC) to clear up misconceptions and inform the public on changes regarding the phasing out of the GST and the introduction of the Value Added Tax (Vat), which will take effect as from January 2013.

Since January 2008, the SRC has been collecting a Goods and Services tax on the rent of houses at the rate of 15%, and this was governed under the GST Act 2001.

In view that the GST Act will be repealed on December 31 this year, the government has found it necessary to transfer the collection of this tax under a new name, which is the Business Tax Act, 2009. This will take effect as from January next year.   

The assistant commissioner of the Tax Division at the Seychelles Revenue Commission, Marie-France Fanchette, told Seychelles Nation that this new move is basically just a change of name for the tax, transferring it under a new heading, with the forthcoming phasing out of the GST.

“The application of the Business Tax on residential dwelling will be the same as the current one under the GST Act, whereby there will be only one obligation on the taxpayer, that is, to ensure that 15% of the rent collected is remitted to the Revenue Commission on the 21st of each month, together with a business activity statement form detailing the type of payment being made,” she said.

She added that the Business Tax Act is being amended to incorporate the new tax, and the bill will soon be law.

Unlike normal business taxes where there is a requirement to lodge a business tax return and make a self-assessment at the end of each year, the Business Tax residential dwelling will not have this requirement.

“It is for this reason that this tax will now be featured in the seventh schedule of the Business Tax Act, which relates to ‘special provision for special entities’,” said Ms Fanchette.

“Landlords are also informed that the 15% tax on rented houses is a final tax and has nothing to do with the soon-to-be introduced Vat.”

She added that to date, the commission has over 1,200 people who have registered as landlords and are paying GST on houses, and it is expected that this figure will increase further in view of an ongoing exercise being undertaken to ensure that others who are not registered do so.