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Seychelles operates under concession type contracts as opposed to Production Sharing types of agreement common in neighbouring countries.


The economic and fiscal package comprises three principal revenue sharing mechanisms and these are summarized below:


        • Royalty
        • A royalty of 10% is levied on the market value of oil produced and saved during each month.  Royalty fo Gas is 5%.  In the event of a discovery of a marginal field, the royalty may be reduced to 5%. 


    • Petroleum Income Tax

            The rate of the Petroleum Income Tax is 35% and it is paid in accordance with the Petroleum Income Tax Act of 2013.


  • Petroleum Additional Profits Tax (PAPT)


PAPT is a resource rent tax levied on cash flows. Currently the Model Petroleum Agreement provides for a two-tier structure for PAPT. The first tier of PAPT will become due once the Company has earned a particular threshold rate of return on its investment. The second tier of PAPT will be due after the company has earned an even higher post-tax rate of return.


PAPT is ring fenced field by field, and is calculated on cash flows denominated in US dollars.


The two threshold rates of return which trigger payment of the PAPT, as well as the rates of the taxes payable are as follows


Tier 1: Rate of 25% when ROR 15% is achieved 


Tier 2: is negotiable at the time of negotiations of the Petroleum Agreement and companies can submit their Tax Rates and ROR in the proposal.


The Seychelles Revenue Commission (SRC) is the local body that will audit and collect tax revenues on hydrocarbon production and they operate on a self assessment principle.