In 2021, Seychelles seriously updated its tax legislation to leave the EU blacklist and show that it’s also “playing the transparency game.” At that time, the country abandoned the classic offshore model with full territorial exemption and introduced a new regime — corporate income tax for companies that are part of international groups and receive passive income from abroad.
Currently, the Seychelles Business Tax Act has expanded the definition of “income derived in Seychelles,” meaning the type of income that can be subject to tax.
Now, income considered as derived in Seychelles includes:
- income from activities conducted in Seychelles or from goods and rights located in Seychelles;
- income from activities conducted abroad, unless such activities are carried out through a permanent establishment (branch) outside Seychelles;
- income from intellectual property owned by a company in Seychelles (except for patents where research and development were conducted locally);
- passive income (dividends, royalties, interest, rent) received from abroad, if the company does not have sufficient economic substance in Seychelles.
Who falls under the Act?
The key definition is a “covered company.” This is a company registered in Seychelles that simultaneously:
- is part of an international group — a group consisting of two or more entities that are tax residents of different countries;
- receives passive income from foreign sources such as dividends, interest, royalties, rental payments, etc.
Who does not fall under the Act?
- companies engaged in active business (trade, services) that are not part of international groups;
- companies that earn income only from activities within Seychelles;
- standalone companies without links to other jurisdictions.
Covered companies must determine whether they have “income derived in Seychelles,” and if so, they must self-assess their tax obligations.
Starting from 2025, Seychelles will operate under a self-assessment system — meaning companies themselves determine whether they are subject to tax and report it to the tax authority.
Reporting is done by completing a specific form and submitting it to the SRC by 31 December 2025.
Who must submit the self-assessment form:
- If a company is part of an international group and receives passive income from abroad — it must complete the form and most likely declare taxes.
- If a company is not part of a group (i.e., has no affiliated companies in other jurisdictions) — it still completes the form but does not pay tax.
How to remain outside taxation?
To avoid paying tax on passive income, a “covered company” must qualify as a “qualifying company.”
To do this, it must meet at least two out of three size criteria:
- Balance sheet: over EUR 20 million — total company assets must exceed this amount;
- Turnover: over EUR 40 million — annual revenue should be large enough to demonstrate real economic activity;
- Employees: more than 250 on average per year — showing that the company is not a “shell” and conducts real operations.
In addition, the company must meet economic substance requirements in Seychelles:
- Have a local office, directors, or staff;
- Make management decisions in Seychelles;
- Incur local expenses (e.g., office maintenance, accounting);
- Submit reports in accordance with corporate law.
For holding companies, the requirements are less strict — having a registered agent and legal address in Seychelles is sufficient.
Timely compliance with these requirements ensures that the company remains compliant, maintains peace of mind, and continues operating internationally without unpleasant surprises.
If you need help completing self-assessment forms, verifying your company’s status, or ensuring compliance with the new rules — feel free to contact our team.
