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The Seychelles Revenue Commission has issued, for comment, Public Ruling 2015-3, which explains the authority's rules and procedures to enforce the arm's length principle in respect of related-party transactions under Section 54 of the Business Tax Act, 2009.
The Ruling states that in applying the arm's length principle, the Commissioner will use the most appropriate transfer pricing method. It confirms that a taxpayer is free to choose its own transfer pricing method, providing the outcome is accurate, with this section listing (in "preferential order"): the comparable uncontrolled price method; the resale price method; the cost-plus method; the transactional profit-split method; and/or the transaction net margin method.
The Ruling sets out situations where the Revenue Commission can make a transfer pricing adjustment in relation to fees charged for the provision of related-party services, or consideration for a license, sale, or transfer of intangible property involving related parties.
Last, the Ruling states that taxpayers must maintain adequate transfer pricing documentation to reflect compliance with the arm's length principle. Documentation must be prepared prior to the due date for filing of the business tax return and submitted to the tax authority within five days upon written request.
Comments are invited until April 15, 2015.
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