Agriculture - Taxes and Incentives

Agriculture - Taxes and Incentives

The following businesses are eligible for incentives:

  • Farmers
  • Farming entities
  • Agricultural processors
  • Agricultural exporters


The following should be noted:

SPECIAL RATE OF TAX 

 

Business Tax: Agriculture

 

Individual Farmer

0%

Agricultural Exporter

SCR 0 – SCR 250,000 = 0%

SCR 250,001+ = 15%

Agricultural

Processor

SCR 0 – SCR 250,000 = 0%

SCR 250,001+ = 15%

Farming

Entity

SCR 0- SCR 250,000 = 0%

SCR 250,001+ = 15%


EXEMPTIONS AND CONCESSIONS FOR AGRICULTURE

Import tax exemption and reduction for registered farmers

 

  1. There shall be a concession of 12.5% on the Excise Tax (S.I 54 of 2018 – Item 3(1) of the Excise Tax (Concessions) Regulations, 2018) payable on importation of commercial motor vehicles by persons registered as a farmer with the Ministry responsible for Agriculture.

  2. Value Added Tax (VAT) refunds on locally purchased goods (excluding all motor vehicles except specialized motor vehicles) for registered farmers and supporting activities such as abattoirs, animal feed factories, hatcheries and agricultural processors. Receipts should be no less than SCR1,000 and should be endorsed by the Seychelles Agricultural Agency (SAA). Find out more  

    Note that while supplies are exempted, registration for VAT is necessary in the instance of multiple business activities. E.g. VAT is exempted on specific imported products for farming businesses, but applied on activities within a retail outlet and other products being sold therein.

  3. Customs duty is exempted on goods imported as capital equipment, protective and safety equipment to be used by persons engaged in agriculture recognized by the Ministry responsible for Agriculture as endorsed by the Ministry responsible for Finance, as per S.I. 118 of 2014.

    Rebate of 5% of the applicable rate of the Customs Duty on importation of inputs and minor operating equipment by persons recognised by the Ministry responsible for Agriculture.


Special Deductions on Taxable Income (Marketing and Promotion)

A further deduction, in addition to all other allowable deductions of the expenditure incurred for marketing and promotion to the extent of 5% of the taxable income or the actual expenditure incurred, whichever is lower. This is relevant to registered farming entities, agricultural processors and agricultural exporters as per the S.I.44 of 2016Find out more


For example:

Example 1:

A business with taxable income of SCR 30 million, claims SCR 1 million for marketing / promotion (actual expenditure).

SCR 30,000,000 (taxable income) x 5% = SCR 1,500,000 million

That taxpayer will be allowed a further deduction of SCR 1 million as it is the lower amount between the actual expenditure incurred (SCR 1 million) and the 5% of taxable income (SCR 1.5 million)

 

Example 2:

A business with taxable income of SCR 30 million, claims SCR 2 million for marketing / promotion (actual expenditure).
SCR 30,000,000 (taxable income) x 5% = SCR 1,500,000 million

That taxpayer will be allowed a further deduction of SCR 1.5 million as it is the lower amount between the actual expenditure incurred (SCR 2 million) and the 5% of taxable income (SCR 1.5 million).

**For clarity purposes in applying the 5% to the taxable business income of the specified person the interpretation to be given to taxable business income shall be restricted to only the taxable income attributable to the business carried on and giving rise to the special deduction. A specified person who also carries on other business cannot consider the total taxable business income of all businesses aggregated for the purpose of applying the 5% special deduction (SRC Public Ruling 2016-2).

Accelerated Depreciation


Rates of depreciation allowable on capital investments for registered farming entities, agricultural processors and agricultural exporters, other than buildings are at the following rates:

Year 145%
Year 420%
Year 240%
Year 510%
Year 330%

Prior to benefiting from the aforementioned incentives, businesses in the agricultural sector should ensure that they are duly registered with the Seychelles Agricultural Agency (SAA) and/or the Seychelles Licensing Authority (SLA), where necessary.

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