Capital Gains Taxation in Seychelles
In Seychelles, capital gains taxation is governed by the Income Tax Act (ITA), which defines capital gains as profits or gains arising from the disposal of capital assets. Capital assets include real estate, stocks, bonds, and other investments.
Calculating Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The acquisition cost includes the original purchase price, any improvements made to the asset, and expenses incurred in acquiring the asset.
Tax Rates
Capital gains are taxed at a flat rate of 15%. However, certain exemptions and deductions may apply, such as:
- Gains from the sale of a principal residence are exempt from capital gains tax.
- Gains from the sale of shares in a company that is listed on the Seychelles Stock Exchange are exempt from capital gains tax.
- Gains from the sale of assets held for more than five years are eligible for a 50% deduction.
Legal Framework
The taxation of capital gains in Seychelles is outlined in the following articles of the ITA:
- Section 10: Chargeable income
- Section 11: Exemptions from income tax
- Section 12: Deductions from income
Policy Objectives
The capital gains tax system in Seychelles aims to:
- Generate revenue for the government
- Encourage investment in the country
- Promote economic growth
Conclusion
The capital gains tax system in Seychelles is relatively straightforward and provides for certain exemptions and deductions to encourage investment. By understanding the legal framework and tax rates, individuals and businesses can accurately calculate their capital gains tax liability and make informed investment decisions.
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