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Today’s Top Headlines

Seychelles Issues Corporate Social Responsibility Tax Guide

by Lorys Charalambous,, Cyprus

20 January 2017

The Seychelles Revenue Commission (SRC) has issued a draft public ruling to provide guidance on the definition of "turnover" for the calculation of liability to the Corporate Social Responsibility Tax (CSRT).

The 0.5 percent CSRT is imposed on businesses with an annual turnover equal to or exceeding the liability threshold of SCR1,000,000 (USD75,100). Funds raised through the tax mostly fund community projects.

In the legislation that established the CSRT, turnover is defined as "the gross receipts from carrying on of business." However, the meaning of "gross receipts" is not therein defined.

The SRC therefore indicated that "gross receipts" should be taken to mean "the total revenue of a business, regardless of the sources or forms such revenue takes, and will include all active income (i.e. operating income, derived from its core business activity), all passive income (i.e. non-operating income, derived from secondary sources), and all amounts derived by a business which is beneficially held."

The SCR further noted that the definition of turnover it has adopted for CSRT purposes does include, for example, capital revenue (proceeds from the sale of tangible or intangible assets), dividends received by a taxpayer from shares held in other companies, realized foreign exchange gains, and grants and donations received from third parties.

On the other hand, amounts held on trust, and deposits or currencies held by banks and money changers, are included in items that the SRC does not consider to be revenue, and therefore not to be considered as turnover for CSRT purposes.

It is emphasized that this definition of turnover is specific to the CSRT, and may not apply to turnover as referred to in any other revenue laws, such as the Business Tax Act.

TAGS: compliance | tax | business | tax compliance | revenue guidance | law | legislation | Seychelles | Tax

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