SEYCHELLES Law and Practice Contributed by: Valery Freminot, Salina Sinon, Ruby Simeon and Hazel Naiken, Rivard Nariman
• there is a temporary suspension of business, in whole or part; or • there is an introduction of new technology, rendering some employees redundant. To terminate the contract of an employee owing to redundancy, the employer needs to initiate a negotiation procedure through the Ministry of Employment, which will determine whether this is a suitable case for termination due to redun - dancy. If the Ministry of Employment finds that it is a suitable case, employees are entitled to compensation and payment for accumulated annual leave. It is not uncommon for employers to voluntarily pay the employee(s) between one and six months’ of salary in these cases. 4.5 Employee Representations Employee representation and consultation with - in the workplace is not mandatory. However, if the terms of an employee’s contract are to be varied, this needs to be mutually agreed by and between the employee and employer. On a national level, it is mandatory for trade unions/workers’ unions to be consulted by the Ministry of Employment before laws are made/ changes are made to existing laws regarding conditions of employment (such as minimum wages, working hours, and leave entitlement). These unions may also assist employees before the Employment Tribunal and in negotiations with employers in cases of termination, changes to contracts, or redundancies. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers In Seychelles, profits earned by companies through permanent establishments located
abroad are not taxed. However, profits from foreign activities not connected to a permanent overseas establishment are taxable. If a Seychelles company has sufficient economic sway in the country, it can be exempt from tax on passive income from foreign sources. However, excluding income from patents (or similar rights) connected to R&D conducted within the Sey - chelles, income from foreign IP rights is taxable. Corporate Income Tax A company that is tax resident in Seychelles must pay corporate income tax (or business tax). Corporate income tax is progressive and is levied on companies as follows: • taxable income of up to SCR1 million – 15%; and • taxable income above SCR1 million – 25%. VAT The standard VAT rate is 15%. Withholding Tax on Dividends/Interest The withholding tax rate depends on the cat - egory of income and whether it is being paid to a Seychelles resident or non-resident, as follows. • Dividends, interest, royalties, natural resource amounts, or technical services fee paid to a non-resident are taxed at 15%. • Dividends paid under Section 62, whether by a resident incorporated entity to a resident incorporated entity or by a resident incor - porated entity to a resident unincorporated entity, do not have withholding tax applied. • Remuneration paid by a promoter, agent, or similar person to a non-resident entertainer or sportsperson in respect of a performance or sporting event in Seychelles is taxed at 5%.
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