Recent Amendments to Seychelles’ Transfer Pricing Regulations

In Seychelles, modifications to the Transfer Pricing (“TP”) regulations have been implemented through the enactment of Act 31 within the Business Tax (Amendment) Act, 2022, effective since January 2023. The Seychelles Revenue Commission (“SRC”) conducted a TP Awareness Session to elucidate these changes.

Key Highlights of the Updated TP Laws:

• Application: The regulations pertain to agreements among associates, diverse entities within a single entity, dealings between businesses and other activities of an entity, or an entity and its permanent establishment.
• Arm’s Length Principle: TP benefits obtained from conditions differing from arm’s length standards are not permissible.
• Adjustments: Non-arm’s length deals can be substituted with arm’s length terms, adjusting taxable income or loss accordingly.
• Incorporation of OECD Standards: The regulations align with the OECD TP Guidelines and Model Tax Convention on Income and Capital.

Reporting and Documentation Specifications:

• Mandatory Reporting: From 2024, mandatory reporting entails submitting a Related Party Dealings schedule with the business tax return.
• Non-Compliance Penalties: Penalties apply for failure to submit the Related Party Dealings schedule.
• Documentation Requirements: TP documentation is mandatory for companies with turnovers exceeding SCR 1 million.
• Additional Documentation: Companies with controlled arrangements exceeding 10% of turnover or SCR 50 million must provide an added layer of documentation.
• Retention Period: Maintaining documentation for 7 years is compulsory.
• Non-Compliance Penalties: Penalties are applicable for inadequate TP documentation.