Seychelles Company Tax Explained: What an IBC Pays in 2026

Seychelles taxes companies on income sourced in Seychelles, which is why a standalone IBC trading abroad usually pays no Seychelles tax at all. In this post, we’ll walk you through how that works in 2026: the rates, the rules added in 2021 for companies in multinational groups, withholding tax, the taxes that do not exist, tax treaties, and where your home country’s rules come in.

Quick Summary

• A standalone IBC, meaning one outside a multinational group, is taxed only on income sourced in Seychelles, so an IBC whose customers, work and assets are all abroad pays no Seychelles business tax.

• Companies pay 15% on the first SCR 1 million of taxable income and 25% above that, while banks, insurers, telecoms providers and alcohol and tobacco manufacturers pay 25% and 33%.

• Since mid-September 2021, an IBC in a multinational group is also taxed on foreign trading income not earned through a permanent establishment abroad, and on foreign passive income unless it has adequate substance in Seychelles.

• Seychelles has no capital gains tax law, and its 15% VAT reaches only supplies made in Seychelles and imports.

• An IBC withholds no Seychelles tax on payments out of income not sourced in Seychelles, while dividends and royalties paid to non-residents out of Seychelles-source income carry a standard 15% withholding tax.

• Seychelles has 28 tax treaties in force, but treaty relief for an IBC is decided treaty by treaty, and your home country’s CFC and management rules can still apply whatever Seychelles charges.

Do Seychelles Companies Pay Tax?

Yes, on income sourced in Seychelles. The answer follows from what a Seychelles IBC is: a company incorporated under the IBC Act 2016, which the Business Tax Act 2009 treats as a resident entity like any other company formed in Seychelles (section 2).

The IBC Act’s own tax exemption was removed from 1 January 2019, when IBCs were also allowed to carry on business and hold property in Seychelles (FSA, November 2018). An IBC that trades locally or lets out a flat in Victoria pays Seychelles tax on that income.

A standalone IBC (one outside a multinational group) with its customers, work and assets all outside Seychelles has no Seychelles-source income and pays no Seychelles business tax. If that is the structure you need, we form IBCs for US$850 all-in for the first year, with the year-one government fees included.

How the Territorial Tax System Works

For a company outside a multinational group, business income is Seychelles-source only if it is derived “from activities conducted, goods situated or rights used in Seychelles” (section 5(1), as substituted by the Business Tax (Amendment) Act 2020). Income that fails that test is not assessable income, so it is not taxed in Seychelles (section 11(1)).

Section 5(3) also names income that always counts as Seychelles-source, whatever the general test says, including:

• fees for services performed in Seychelles

• rent from leasing property in Seychelles

• interest, royalties or technical services fees paid by a Seychelles resident, unless the payer bears them as an expense of a permanent establishment outside Seychelles

Seychelles Business Tax Rates

Taxable income is Seychelles-source income less allowable deductions (section 10), while the virtual asset rate is charged on assessable income before deductions (SI 102 of 2024). The company rates have applied since 1 January 2022 (SI 108 of 2021), and the Ministry of Finance’s 2026 Budget papers confirm the sector rates and propose no business tax changes for 2026 or the medium term.

When an IBC’s Foreign Income Is Taxed

Since mid-September 2021, a stricter source rule applies to any member of a multinational group (section 5(1A) and the Eleventh Schedule, as rewritten by SI 79 of 2021). A multinational group means companies linked by ownership or control that must prepare consolidated accounts, or would have to if any of them were listed, with members tax-resident in two or more countries, or a member taxed on a permanent establishment in another country. There is no size threshold. The typical case is an IBC owned by a foreign parent company, and the same definition can reach an IBC that owns companies abroad.

For those companies:

• Foreign trading income is taxed in Seychelles unless it is earned through a permanent establishment outside Seychelles, such as a fixed place of business abroad.

• Foreign passive income, meaning dividends, interest, rents, royalties and gains from holding and managing shares, is taxed unless the company has adequate economic substance in Seychelles for that year.

• Income from intellectual property held in Seychelles is taxed, except a share of patent-type income, including income from copyrighted software, worked out from how much of the development spending took place in Seychelles.

A group IBC keeps its foreign passive income out of Seychelles tax only by meeting the economic substance requirements, a test of its people, premises and decision-making in Seychelles.

Substance does not help with foreign trading income, which only a permanent establishment abroad takes out. Income that fails either test is taxed at the normal company rates.

Capital Gains, VAT and Stamp Duty

Seychelles has no capital gains tax law and no controlled foreign company (CFC) rules of its own (OECD Tax Policy Review of Seychelles, 2020). For a company in a multinational group, though, gains from holding and managing shares count as passive income and are taxed unless the company meets the substance test above.

VAT at 15% applies only to goods and services supplied in Seychelles and to imports (SRC), and registration becomes compulsory at SCR 2 million of taxable supplies (SI 97 of 2024). An IBC whose sales all take place outside Seychelles makes no taxable supplies there, though anything it imports into Seychelles bears import VAT.

Instruments relating to an IBC’s formation, shares, debt, charges and property transfers are exempt from stamp duty, except transfers of an interest in Seychelles land or buildings and dealings in the shares or debt of a company that, directly or through a subsidiary, has an interest in Seychelles immovable property (IBC Act section 362).

Withholding Tax on Payments From a Seychelles IBC

Seychelles charges a final withholding tax on dividends, interest, royalties and technical service fees that a non-resident derives from sources in Seychelles, levied on the gross amount (Business Tax Act sections 8 and 9). Since 1 January 2019, section 8(4) has switched that charge off for payments a resident makes out of income not sourced in Seychelles (Business Tax (Amendment) Act 2018), so a standalone IBC with no Seychelles-source income withholds nothing on them.

Payments out of Seychelles-source income, including a group IBC’s taxed foreign income, carry these 2026 rates:

A tax treaty with the recipient’s country can set a lower rate. Where an IBC has both kinds of income, section 5(4) sets a formula for the share of a remittance abroad that is taxable. Where tax is due, the payer withholds it and pays it to the SRC within 21 days after the end of the month (section 69).

Tax Returns and the TIN

SRC guidance says an IBC doing no activity in Seychelles, and so earning no Seychelles-source income, has no business tax return to file (SRC, FAQ for IBCs). Whether an IBC has to file a Seychelles tax return comes down to two questions: does it earn Seychelles-source income, and is it part of a multinational group?

An IBC with Seychelles-source income, or one in a multinational group, files its return three months after the year end, 31 March for a calendar year (Business Tax Act section 57). Since 21 August 2026, the SRC has also stopped issuing new TINs to IBCs not operating in Seychelles that want one only for bank purposes (SRC notice). None of this replaces the IBC’s annual compliance: the annual fee, accounting records and beneficial ownership filings apply whether or not the company owes tax.

Double Tax Treaties and Tax Residency Certificates

Seychelles has 28 double tax treaties in force out of 33 signed (OECD Global Forum, 2026), and none with the UK, the US, Germany, Canada or Australia (SRC treaty list).

Seychelles corporate tax residency starts from the Business Tax Act: a company incorporated in Seychelles, IBC included, is a resident person. The SRC issues a tax residency certificate for an IBC on written request, for a fee of SCR 400 (SRC certificate application form).

No SRC document says that certificate entitles an IBC to treaty benefits: each treaty’s own residence test decides, applied by the country the income comes from. The Malaysia treaty’s protocol denies its exemptions and reductions to anyone doing business under the IBC Act 1994, the predecessor of today’s Act, and several other treaties carry anti-abuse tests that deny relief where obtaining it was one of the main purposes of an arrangement.

Where Your Home Country Comes In

A 0% Seychelles rate settles the Seychelles side only. Two sets of rules at home can still tax the company’s profits.

Many countries’ CFC rules let them tax a resident who controls a foreign company on its profits, even when nothing is paid out, particularly when the company pays little or no tax locally.

A company whose decisions are really made in your home country can be treated as resident there under place of effective management rules, and taxed there as a local company, wherever it was incorporated.

The tax benefits of a Seychelles company are real at the Seychelles end: no tax on a standalone IBC’s foreign income, no capital gains tax law and no Seychelles CFC rules. Whether they hold at home depends on where you live and where the company is actually run.

Seychelles on the EU, OECD and FATF Lists in 2026

Not by the official lists:

Seychelles has been on the EU’s non-cooperative list twice before, from February 2020 to October 2021 and from October 2023 to February 2024. The old IBC tax exemption ended with no grandfathering, so no IBC, however old, still benefits from it.

FAQ

What is the business tax rate in Seychelles?

Companies pay 15% on the first SCR 1 million of taxable income and 25% on the rest. Banks, insurers, telecoms providers and alcohol and tobacco manufacturers pay 25% and 33%. A standalone IBC with no Seychelles-source income pays none of these.

Does a Seychelles IBC pay tax on foreign income?

Not if it is standalone: an IBC outside a multinational group is taxed only on Seychelles-source income. An IBC in a multinational group is taxed on foreign trading income not earned through a permanent establishment abroad, and on foreign passive income unless it has adequate substance in Seychelles.

Is there capital gains tax in Seychelles?

No, Seychelles has no capital gains tax law. For a company in a multinational group, though, gains from holding and managing shares count as passive income and are taxed unless the company meets the substance test.

Can a foreigner own a Seychelles company that trades in Seychelles?

Yes. An IBC’s shareholders and directors can be of any nationality and live anywhere, and since 1 January 2019 an IBC may carry on business and hold property in Seychelles. It then pays tax on that income, registers with the SRC within 28 days of starting business and notifies the Registrar within one month of its first Seychelles assessable income. It still cannot carry on banking, insurance or securities business in Seychelles, and gambling needs a licence.