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Seychelles – Transfer Pricing (2025)

Seychelles endorses the arm’s length principle within its domestic legal framework. Transfer pricing provisions derive from the Business Tax Act, 2009, notably sections 4 and 54(1) of the Business Tax Act, 2009, which provide the statutory basis for applying arm’s length rules. The Seychelles Revenue Commission (SRC) enforces these provisions and uses international guidance in technical application.

Arm’s length principle and the role of the OECD Guidelines

The OECD Transfer Pricing Guidelines are not explicitly incorporated into Seychelles law, but they are treated as authoritative technical literature to be consulted in transfer pricing work. The country profile states: “The OECD Transfer Pricing Guidelines are not explicitly included in Seychelles’ legislation. The Guidelines will be considered as useful literature for advisory purposes on TP and shall be consulted in conducting TP-related work.” Seychelles also recognises the UN Practical Manual on Transfer Pricing for Developing Countries as a complementary guide when SRC auditors address TP cases.

Seychelles does not contain a dedicated statutory definition of “related parties.” Instead, the law refers to the concept of “associates” in section 3 of the Business Tax Act, 2009, which is treated as equivalent to related parties. The statutory language includes that two persons are associates if the relationship is such that “one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person.” The Act excludes associate status based solely on an employment relationship, and specifically treats as associates an individual and a “relative” (unless the Commissioner General is satisfied otherwise); a partner and a partnership where the partner alone or together with associates controls fifty per cent or more of the rights to income or capital; a trust and a person who benefits or may benefit under the trust; a member and an entity where the member alone or with associates controls directly or through interposed persons fifty per cent or more of voting power, rights to profit distribution, or rights to return of capital; and two entities if a person alone or with associates controls fifty per cent or more of voting power, profit distribution rights, or return of capital in both entities. The law also clarifies that holdings attributable to a person from an associate are not reattributed to another associate, and defines “relative” in terms of blood, marriage, or adoption.

Methods and selection criteria

Domestic law does not prescribe or enumerate transfer pricing methods (such as CUP, Resale Price, Cost Plus, TNMM, Profit Split). Nevertheless, Seychelles follows the OECD Transfer Pricing Guidelines and the UN Practical Manual, and thus applies the internationally recognised methods contained therein. The selection criterion adopted by the jurisdiction is the “most appropriate method” approach, consistent with Public Ruling 2015-3, which reflects the authority’s acceptance of the most appropriate method principle.

Comparability analysis and ranges

While no explicit domestic provision details comparability analysis, Seychelles adheres to Chapter III of the OECD Transfer Pricing Guidelines and the UN Practical Manual in practice. There is no statutory preference for domestic comparables over foreign comparables, and the tax administration does not use secret comparables. The domestic framework allows the use of arm’s length measures under section 54(1) and section 54(2) of the Business Tax Act, 2009, and comparability adjustments are required by section 4 of the Business Tax Act. Section 4 states that where it is not possible to determine fair market value directly, “the fair market value is the consideration of a similar asset, property, service, or benefit would ordinarily fetch in the open market at that time, adjusted to take account of the differences between the similar asset, property, service, or benefit.” Accordingly, Seychelles relies on international guidance to perform comparability adjustments, including adjustments and statistical measures in line with the OECD Guidelines.

Documentation and reporting (Master, Local, CbC, thresholds, language, timing, forms)

Seychelles requires taxpayers to prepare transfer pricing documentation and to have it available upon request. Public Ruling 2015-3 specifies that documentation must be prepared prior to the due date for filing the business tax return and must be submitted to the tax authority within five days upon written request. There is no mandated format or prescribed structure for documentation in domestic law, nor any specified language requirement. The country profile does not identify separate statutory obligations to prepare a Master File, Local File or Country-by-Country Report under the domestic law in the profile itself; instead documentation is to be maintained and produced upon request.

Safe harbours, exemptions and materiality

Seychelles does not have statutory safe harbour rules or other TP-specific simplification measures in force. No exemptions or safe harbour thresholds for particular industries, taxpayers or types of transactions are reported.

APAs and MAP; procedures and timing

Administratively, Seychelles may issue public rulings that set out the tax office’s position on interpretative issues. The jurisdiction has a network of tax treaties and provides for Mutual Agreement Procedures (MAP) under those treaties. Taxpayers dissatisfied with SRC decisions may object administratively and appeal to the Revenue Tribunal. Currently there is no established APA program, although Seychelles law does not bar the use of Advance Pricing Agreements. Relevant domestic references for administrative dispute mechanisms and MAP include section 62 and section 70 of the Revenue Administration Act.

Penalties and other considerations (secondary adjustments, re-characterisation, year‑end adjustments, PEs)

There are no specific secondary adjustment rules in Seychelles’ transfer pricing legislation. Penalties for TP issues derive from the general Revenue Administration Act framework rather than from TP-specific penalty rules. In the absence of TP documentation and in the event of a transfer pricing adjustment, taxpayers face additional tax, interest and culpability penalties as set out in the Revenue Administration Act and its amendments. Section 41 of the Revenue Administration Act, 2009 provides interest for late payment, calculated as simple interest from the due date to the date of payment, at a rate equal to the quarterly average prime lending rate on the first day of the period plus three percentage points; interest is refundable to the extent that the revenue was found not to have been payable. Section 44(1) states that a taxpayer who fails to pay revenue by the due date is liable to an additional tax equal to 10% of the amount unpaid. Section 44A of the Revenue Administration (Amendment) Act, 2015 sets culpability-based additional taxes where a person makes a false or misleading statement resulting in a revenue shortfall: 25% of the revenue shortfall where the statement results from failure to take reasonable care; 50% where the statement results from recklessness as to revenue laws; and 75% where the statement results from intentional disregard of revenue laws. In the case of an assessment under certain provisions, the additional tax can be 75% of the revenue liability; repeated offences may increase the additional tax by 20%. The profile notes that if a taxpayer voluntarily ignores a public ruling, the tax office will consider the failure reckless and impose the higher culpability band (e.g., 50% rather than 25%). Thus, failure to comply with Public Ruling 2015-3 may result in interest, the 10% additional tax for late payment, and culpability-based additional taxes of 25%/50%/75% depending on conduct.

There are no specific domestic rules for year-end adjustments; Seychelles follows OECD guidance in practice. In relation to attribution of profits to permanent establishments, Seychelles follows the Authorised OECD Approaches (AOA), and Article 7 of the 28 tax treaties in force for Seychelles addresses PE profit attribution.

Conclusion

Seychelles has established a baseline framework for transfer pricing grounded in the Business Tax Act, 2009, but lacks detailed domestic rules on methods, intangibles, financial transactions, cost contribution arrangements or safe harbours. The SRC relies heavily on the OECD Transfer Pricing Guidelines and the UN Practical Manual to apply the arm’s length principle. Public Ruling 2015-3 sets practical documentation obligations (preparation before filing date and submission within five days upon written request), while penalties and enforcement are applied under the general Revenue Administration Act regime. Seychelles is in the process of developing transfer pricing regulations to supplement section 54 of the Business Tax Act.

References

For the consolidated OECD country transfer pricing profiles, see https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html

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La información presentada en este perfil se ha generado tomando como base datos y contenidos publicados por la OCDE. Si bien se busca reflejar fielmente la información disponible, no se garantiza su exactitud ni exhaustividad y se recomienda consultar las fuentes originales de la OCDE para fines oficiales o de investigación.