Vat to be implemented as from January 2013


14-September-2012

The Seychelles Revenue Commission (SRC), which has the responsibility to implement Vat, will be organising various educational programmes for both taxpayers and consumers in the coming weeks to ensure that the business community and the public in general get a comprehensive understanding of what Vat is all about.
 
We will also resume our weekly article in the Seychelles Nation newspaper.

This week’s article is just a recap of what is Vat and calls on all business which must or wish to register for Vat but have not done so yet to contact the SRC to be registered.

What is Value Added Tax (Vat)?
Vat is a:
Consumption tax: It is a tax charged on the sales of goods and services to consumers. The final consumer bears the burden of Vat thanks to the deduction mechanism.

At the point of sale, a Vat-registered business will charge Vat on all goods (unless the goods is exempted).

 Vat is charged on all services provided by a business where that business is registered for Vat (unless the service being provided is exempted).

Broad-based tax: It is charged at the point of entry on the importation of goods; and sale of all types of goods and services made in the course of doing business, except for those that are specifically exempted under the First schedule of the Vat Act 2010.

Destination-based tax: Vat is charged on local consumption only.

 Goods and services to be consumed and enjoyed in another destination are generally zero-rated. Zero-rated means that they charge Vat at 0% but they can get a credit for all their input tax.

Who needs to register for Vat?

The Vat Act 2010 introduces specific conditions to be a Vat-registered taxpayer. A business becomes liable for registration when the business is making taxable supplies and the sales turnover exceeds the Vat threshold.

What is the Vat threshold?

A Vat threshold relates to the minimum annual turnover that has to be performed by the business during a certain period of time. The Vat threshold has been set at R5 million. As such:

• Businesses whose annual turnover is above or equal the Vat threshold must register for Vat (Compulsory Registration)
• Businesses whose annual turnover is below the Vat threshold may voluntarily register for Vat (Voluntary Registration)

When considering the threshold the sale of capital assets and the sale of a whole or part of a person’s business are not included as the business’ turnover.

The Vat threshold is mainly designed to relieve small businesses from the burdens of complying with Vat administrative requirements.

What requirements must be met in order for a business to voluntarily register?

• If a business is under the turnover threshold for compulsory registration they may still register for Vat voluntarily. Under the proposed Vat legislation it is stated that the Revenue Commissioner must register a person who has voluntarily applied for registration if he/she is satisfied that:

•  (a) the person is making, or will make taxable supplies;
•  (b) the person has a fixed place from which the person’s enterprise is conducted;
•  (c) if the person has commenced carrying on an enterprise, the person –
 (i) has kept proper records of his/her enterprise; and
 (ii) has complied with his/her obligations under other revenue laws; and
• (d) there are reasonable grounds to believe that the person will keep proper records and furnish regular and reliable Vat returns.

How to register for Vat?

For registration kindly contact any of the SRC offices on Mahe, Praslin, La Digue. A form will be sent or given to you to be completed, signed and returned back to us. The form can also be downloaded from the SRC website (www.src.gov.sc).
Once registered, the SRC will inform you in writing and you will be issued with a Vat certificate.

Where do I go for more information?

If you are still not sure about whether you need to register or not kindly contact us on 4293742 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. .
For more information about Vat in general kindly visit our website (www.src.gov.sc). The Value Added Tax Act, 2010 is available for download on the website.

Submitted by the Seychelles Revenue Commission

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