REGISTRATION

What are the requirements by FIRCA for persons wishing to register either as a sole trader business, partner(s) in a partnership business, beneficiary or investment income earner?

You must submit your birth certificate and your business license plus one of the following when registering:

• driver's license & wheel tax certificate.
• FNPF card.
• passport.
• official identification card.

Click here to access registration form.

What are the registration requirements by FIRCA for partnership, trust (including unit trusts), estates of deceased persons, charitable organisations & non-profit bodies or companies?

A partnership wishing to register for tax purposes (whether or not a written partnership deed exists) would need to submit its Partnership Deed/Agreement.

A trust (including a unit trust) would need to submit a copy of its Deed of Trust.

An estate of a deceased person would need to submit a probate statement from the executor.

A charitable organisation or non-profit body would need to submit it's Certificate of Incorporation and Memo/Articles of Association/Registration Certificate.

A company wishing to register for tax purposes whether public or private need to submit it's Certificate of Incorporation and Memo/ Articles of Association.

A business license needs to be submitted in addition to the above requirements by any business that should register with Fiji Islands Revenue & Customs Authority (FIRCA). A site inspection would need to be carried out before a Tax Identification Number (TIN) is issued.

Click here to access registration form.

What are FIRCA's requirements for ticket lottery registration?

A copy of the promoter's license and an estimate of sales need to be submitted before a TIN can be issued. If the promoter already has a TIN they must use that TIN. Registration should be done on Form IRS007.

What are FIRCA's requirements for the treatment of a branch/division as a produce supplier for VAT purposes?

Separate Books of Accounts (General Ledger, Cash books etc) should be kept in addition to having a separate physical set up for the produce supply division. Furthermore a separate bank account should be maintained for the division.

A site inspection would need to be carried out by FIRCA staff before treating the division as a produce supplier. Registration should be done on Form IRS009.

What are FIRCA's requirements for registration of promoters and performing artists?

The expected gross sales and contract/agreement with the performing artist needs to be submitted with the registration form. Registration and return should be done on Form IRS214.

Where should I send my form?

For income tax purposes:

• drop it at any Customer Enquiry Center (CEC).
• you can send it through the post.

(If registering by post, certified copies of proof of identity documents need to be provided)

For VAT purposes:

• at the Customer Enquiry Center (CEC) nearest you, so that a site inspection can be done.

How soon will I receive my TIN?

You should receive the TIN within ten (10) working days from the date of lodgment of your application.

When can registration for any business be cancelled?

Income Tax:

• when a person will not be deriving any more income in Fiji or abroad ( e.g. migration, death, final retirement, cessation of business).

VAT:

• when the gross turnover in 12 months is below the turnover threshold of FJ$50,000 (for goods and/or services) and the person has been registered for at least 12 months, the person may apply for deregistration.
• a produce supplier and any person that has registered in error ( e.g. exempt supplier ) can apply for cancellation at any time.

Upon cessation of business and where all assets retained have been accounted for in the last return and/or a final audit is completed. A formal deregistration letter will be issued once the Commissioner is satisfied that all tax matters have been finalised.

I am operating a sole proprietor business. Do I have to register for VAT & Income Tax?

If your business gross income is FJ$50,000 or more in a year, then you are obliged to register for VAT purposes.

For income tax purposes you still have to register irrespective of your level of income.

If you are not already registered with FIRCA you should complete the form Registration of Salary & Wage Earners or Sole Traders (IRS001). If you are already registered for income tax but not for VAT you should complete the VAT registration section of Form IRS001 and submit the completed form to FIRCA.

There is a foreign couple that is interested to purchase a piece of land here in Fiji and build a house to be rented out for residential purposes. Do they need to register for VAT?

Depending on whether the couple buys the land in their own name, or they hold it through a company, partnership or trust, they must register with FIRCA in the name of the person or entity that holds the property title.

If the home is rented out for residential purposes, they should not register for VAT as residential rent is exempt from VAT. But they should register for VAT if it is rented out for commercial purposes and the gross turnover in a year would exceed $50,000.

However registration would need to be done for income tax purposes and annual income tax returns lodged disclosing the rental income and the related expenses incurred in deriving the rental income.

We as a youth group are contracted with the Public Works Department (PWD) to clean a stretch of road. Should we register and pay provisional tax?

Yes, your youth group has to register with FIRCA and will be issued with a temporary Tax Identification Number (TIN). A Certificate of Exemption (COE) would be issued in your club's name provided all the required information is provided to FIRCA.

If your youth club does not have a valid COE then PWD will deduct 15% provisional tax from any gross contractual payments made to the club. The youth club can claim this as a credit when it lodges its tax return.

Provisional tax will be deducted by the payer from the payments to be made to contractor if it is above the threshold of FJ$300 of total annual payments.

Our motel business is run by our Church which I understand should be exempt for tax purposes. Do we have to register for Hotel Turnover Tax?

If the motel had been issued a license by the Hotel Licensing Board you should comply with the requirements of the Hotel Turnover Tax Act 2006.All licensed hoteliers are required to start charging the Hotel Turnover Tax of 5% and remit the tax collected in any month by the 30th of the following month.

You are to register the motel operation for Hotel Turnover Tax (HTT) purposes and to account for the HTT on all services provided by the motel except those services provided at a campsite (if any) as they are exempted from the HTT.

The 5% HTT must be charged on the VAT exclusive amount.

ASSESSABLE INCOME

I am in the process of engaging a tenant to rent my current home as my family will be occupying our new home. For your information I am already registered as a salary and wage earner. Will I be taxed on the rental income I will be receiving?

Yes, you will be taxed on the rental income that you will receive. You will need to change your registration type with FIRCA from that of salary & wage earner to business since you are deriving rental income.

You will continue to use the same Tax Identification Number (TIN) and would need to declare your annual gross rental income together with your salary income in your business return ( Form B). You will be allowed to claim as a deduction all expenses (e.g. rates, rent paid in respect of lease, repairs & maintenance of property, etc.) incurred for the purpose of deriving your rental income.

Tax will be calculated on your Chargeable Income (Chargeable Income = Gross Income less Deductible Expenses & Allowances claimable under Income Tax Act).

ALLOWABLE DEDUCTIONS

What are the requirements for becoming an approved organisation to which donors could qualify for a tax deduction under the provisions of Section 21(n) of the Income Tax Act?

The organisation must first be registered under the Charitable Trusts Act.

In considering the taxable status, the organisation's constitution is perused to ensure that it meets the criteria set out in Section 17(5) of the Income Tax Act.

The features are:

• it must be a body of persons or irrevocable trust of a public character whose activities should benefit all the residents of Fiji .
• it could be set up for any of the following purposes:
  
• The relief of poverty
• The distress of the public.
• The advancement of religion.
• The advancement of education.

• The proviso states that any income from a business will be taxable unless the profits are applied for the purpose for which the organization was set up.

The organisation needs to submit a formal written application to the Commissioner of Inland Revenue (CIR) with the following documents:

• a copy of the organisation's constitution and
• a copy of the registration certificate under the Charitable Trust Act.

In considering whether an organisation should be listed as an approved charitable organisation, the following factors are considered:

• It must be of a public character i.e. membership should not be restricted to any particular group.
• The benefit of the charity must be available to all Fiji citizens ( i.e. It should not be confined to any group, race, creed or religion).

The decision by CIR will be based on the information provided.

What sort of repairs and maintenance expenses are businesses allowed to claim as a deduction for income tax purposes?

Businesses are only allowed to claim repairs and maintenance expenses incurred for:

• assets that are owned by the business; and
• which involve repair of the asset with the same material, not superior material.

Ongoing maintenance such as motor vehicle and air conditioner servicing are deductible.

Is our company allowed to claim legal fees incurred in relation to securing a business deal with another party?

Legal expenses that are allowable for income tax purposes are those incurred in the course of earning income ( e.g. relating to preparation of business contracts, leases and for the purpose of debt recovery). Legal expenses of a capital nature are not allowable, such as relating to change in shareholding or sale and purchase of a business.

Can our company treat parking fees and fines as an allowable deduction for income tax purposes?

Your company may claim parking fees if it is incurred for business purpose as it is an expense or loss connected to the nature of the trade. You are not entitled to claim parking fines as they are a punishment for illegal behaviour, not in connection with the nature of a trade.

TAX REFUND CLAIMS

How long does it take now to process Income Tax & VAT returns for businesses?

It takes four to five weeks to process business Income Tax & VAT returns.

Are we still allowed by FIRCA to claim for a tax refund if we lodge our return one year or more from end of year of assessment?

Yes, you are entitled to get a refund even if you lodge your return after one year has lapsed without being charged any late lodgment penalties. You will only be charged late lodgment penalties if it is a payable case.

As a general rule you must make a claim within three (3) years from the end of year of assessment. If you make a claim after three (3) years has lapsed, the refund is forfeited and is referred to the Public Trustee.

Can my refunds be offset against my business's tax liabilities?

Income Tax, VAT and other tax refunds are offset against any tax liabilities of a taxpayer.

TAX PAYMENTS

What is the due date for payment of VAT & Income Tax?

These tax liabilities should be settled within one (1) month from the date of Notice of Assessment.

What is a time-to-pay (ttp) arrangement?

A time-to-pay arrangement is an arrangement where the taxpayer requests to make installment payments to FIRCA, when they cannot make the full payment due to financial constraints. This only applies for income tax debts. Our Debt Management Service (DMS) is the only Section that handles ttp arrangements . Arrangements are done on a case by case basis subject to certain requirements.

What are the requirements that a taxpayer should meet to qualify for ttp?

• put forward a proposal for payment of their debt in full within six (6) months or the shortest possible timeframe.
• taxpayer has put down reasons as to why he/she cannot pay the debt in full amount.
• forward a payment ( 1/2 of the amount owing or in discretionary cases, whatever amount the taxpayer can pay provided evidence is submitted ) at the time of the proposal to demonstrate a commitment to pay.
• all outstanding returns have to be lodged prior to ttp arrangements.

Am I entitled to a reduction or full waiver of penalties?

Only the late payment penalties (lpp) can be reduced or fully waived unless & until the real tax is paid up front at the Commissioner's discretion. In certain cases full penalties have to be paid if the Commissioner so decides.

Can the Commissioner of Inland Revenue (CIR) recover tax debts from third parties owing money to or holding money for the taxpayer?

CIR has the power to garnishee these individuals' bank accounts and/or rental income. Garnishee is the procedure whereby the Commissioner attaches debts due or accruing to the taxpayer from a third party (the garnishee) in order to satisfy the debt.

What is the difference between provisional tax and withholding tax and when should these be deducted and paid?

• provisional tax - under the terms of Legal Notice No. 70 of 1976, where a payment arises under any contract for services, including progress payments under a contract , the payer is required to withhold 15% of the payment and remit the amount to FIRCA within 30 days after the end of the month in which the deduction was made.

Any such deduction will be allowed as a credit against any tax assessed on the payee. Legal Notice No. 70 facilitates the payment of Provisional Tax payable by taxpayers, who are in receipt of commission income or income from the performance of contracts for services, by means of deductions at source from gross payments due to them from such commissions or contract payments.

• withholding tax – is tax deducted for income such as dividend, interest, royalty that is received by a taxpayer whether a resident or non-resident. It also applies to payments received for the hire or rent of films or the use whether by way of purchase or long-term hire.

Examples:

• non-resident dividend withholding tax - 15%.
• non-resident interest withholding tax (hire of films) – 10% .
• non-resident miscellaneous withholding Tax – 15%
• resident interest withholding tax – 31%
• royalty withholding tax – 15%
• resident dividend tax – 15% . Any dividend paid by a company operating under the TFF Zones Decree 1991 to a resident shareholder.

I am a company who may do some business in your country in the near future. Can I apply for a Certificate of Exemption (COE) for withholding tax? I am a small Australian company that seeks to pay the 30% withholding tax in Australia.

The COE provision is only available to provisional taxpayers, particularly those who are engaged in contracts for service. There is no exemption available for the deduction of withholding taxes (apart from bank interest for residents).

What taxes are levied to overseas performing artists and promoters?

Individual artists are levied a tax of 31% on their gross income for services performed in Fiji . Group income is assessed as a whole if breakdown is not provided. Net income is usually grossed up. Assessment of income tax raised is based on contract. Both resident and non-resident promoters are to lodge their return of income and profit & loss statement within fourteen (14) days.

My company is contracted to a government ministry to provide cleaning services. I have been told that they will be deducting provisional tax of 15% and remit me the balance of the income due to us. Could you enlighten me further on this issue, as I am not aware of this requirement?

Under the provisional tax system where a payment arises under any contract for services, including progress payments under a contract , the payer is required to withhold 15% of the payment and remit the amount to this office within 30 days after the end of the month in which the deduction was made. The threshold is FJ$300 and provisional tax of 15% shall be applied on annual payments provided it exceeds the threshold amount. For additional information please refer Legal Notice 70 of 1976.

Any such deduction will be allowed as a credit against any tax assessed on your company after the related year's original return of income is assessed. The system facilitates the payment of provisional tax payable by taxpayers, who are in receipt of commission income or income from the performance of contracts for services, by means of deductions at source from gross payments due to them from such commissions or contract payments.

RETURNS LODGMENT

Are cooperative societies required to lodge tax returns and when are they due?

Returns of cooperative societies are required to be lodged annually and this should be done within three (3) months from the end of the fiscal year.

I am only receiving rental income and my annual net income is below FJ$15,000. Am I required to lodge income tax returns?

Since you are earning below the tax threshold of FJ$15,000 you are not liable to pay any tax to the Authority and shall not be required to lodge a return of such income unless required to do so by notice or demand sent to you by the Commissioner.

What is the due date for lodgment of VAT and income tax returns?

Monthly VAT returns should be lodged by the end of the following month. Three monthly VAT returns likewise should be lodged by the end of the following month.

Income tax returns should be lodged by the 31 st of March each year for business taxpayers other than companies. Company income tax returns on the other hand should be lodged within three (3) months from the end of the fiscal year. Lodgment of tax returns is now staggered in line with the Tax Agents Lodgment Programme and all the taxpayer has to do is to apply for extension of time for lodgment of his or her return.

EMPLOYER OBLIGATIONS

What is the main obligation of an employer as regards to registration?

Every person who carries on or is about to carry on any trade, business, profession or vocation in respect of which he is or will be an employer, shall within thirty (30) days of the commencement of such trade, business, profession or vocation, register with the Commissioner.

They will also need to disclose the number of employees employed or expected to be employed.

Do businesses need to submit to FIRCA the electronic format and hard copy of the PAYE annual summary?

Yes, all employers will need an electronic format and small employers that do not have computers will need to send a hard copy of the PAYE annual summary.

Where could companies obtain a set of PAYE employee certificates?

Companies can download the certificates from this website or collect a hard copy from any of our Customer Enquiry Centres.

We have been advised by our clients in Fiji that the PAYE employee certificate has changed. Has the electronic lodgment format been altered to reflect the employee certificate changes? Has the PAYE annual summary changed to reflect these changes?

Yes, the electronic report and the annual summary caters for the new employee certificate. Changes will be made to adopt the textile format instead of the spreadsheet format as in the specs for electronic reporting for employers.

How do we determine the tax that applies to lump sum payments? What are the requirements?

The employer may apply to the Commissioner to determine the amount of tax to be deducted. This will apply in cases where lump sum payments are made in respect of:

• any award or bonus relating to an office or employment.
• compensation for loss of office upon termination of appointment.
• compensation for loss of office due to changes in the terms of employment.
• compensation for loss of office due to downsizing or restructure in the organization.
• gratuity or retirement.

Many lump sum payments are fully taxable and should be taxed at the rates specified in the tax tables.

An employer seeking a determination of the tax to be deducted must apply to the Commissioner in writing setting out the reasons for the payment and provide the following information:

• nature of the payment.
• names of the recipients and other relevant details such as age date of appointment, number of years' service, etc.
• correspondence leading up to the decision to make the payment.
• computation of final salary including the lump sum payment for each employee.

There are 3 provisions in the Income Tax Act for which exemption from tax may be applicable. These are:

• loss of office.
• gratuity.
• redundancy.

Our company has been paying for the utilities bills for our directors and senior management staffs. Are we required to deduct tax on these payments?

Those payments are treated as taxable benefits and PAYE tax is required to be deducted from the gross amounts paid. They are also treated as allowable deductions for the company for income tax purposes. The company is entitled to claim the VAT portion of the payment but the same amount has to be accounted as output VAT. On the other hand it will work out the same if they do not claim the VAT portion at all.

Is an employer obliged to account for tax on emoluments at any time after the date of death of an employee?

An employer is obliged to deduct the tax on those emoluments as if the deceased employee was still alive.

VAT SUPPLIES

What is the current VAT rate and how do we determine the VAT portion from the VIP amount?

The current VAT rate is 12.5% and the VAT portion is calculated as one-ninth (1/9 th ) of the VIP amount.

Can you please inform me if VAT applies to supplies of kava in Fiji?

VAT will only apply to supplies of kava if the supplier is registered for VAT purposes. If the supplier is registered, he should give you a tax invoice if you buy from him. The supplier's tax invoice should have his tax identification number (TIN).

Is the insurance indemnity payment subject to VAT?

Any payment received by a registered person that is relating to a loss incurred in respect of goods and services in the course or furtherance of making taxable supplies is subject to VAT.

Our company engages an overseas company to provide consultancy services and we are registered for VAT purposes. Are we required to account for VAT on the payments made to the overseas company?

The VAT Decree requires you to pay FIRCA the VAT reverse charge, which is 12.5% of the gross payment amount. FIRCA will require you to account for this tax upfront, before applying for tax clearance. You are entitled also to claim the same amount as input VAT when you lodge the respective VAT return provided you furnish us with the overseas supplier's invoice.

VAT EXEMPT SUPPLIES

Can I claim VAT on the rent paid to a VAT registered person?

You can only claim VAT if you are registered and the supply is in relation to the occupying of property for business purposes. If you are occupying part of the property for residential purposes, then you cannot claim VAT for that portion relating to residential accommodation.

Is interest payment subject to VAT?

No, interest is exempt from VAT.

ZERO-RATED SUPPLIES

I have a fishing business and I supply fish to a local fish processing company where they are further processed and exported overseas. Can I treat these supplies as zero-rated supplies?

You cannot zero-rate the supplies unless your company is registered as a tax free factory.

Under the VAT Decree, the company can only treat the sales as being zero-rated if it:

• “Entered the goods for export pursuant to the Customs Act 1986, in the course of, or as a condition of, making that supply and
• Exported the goods within twenty-eight days of the time of supply.”

If the recipient company is the party that is exporting the supplies overseas then they are the ones that should be treating it as zero-rated supplies.

VAT INPUT CLAIMS

What is the main requirement for claiming input VAT?

All input VAT claims should be supported by a tax invoice for any purchase exceeding FJ$10.

Can our company claim input VAT for the utilities bills of directors and senior employees?

You may claim the input VAT provided your company has assessed PAYE tax on the related fringe benefits. If your company has not assessed PAYE tax then you are not to claim the related input VAT.

HOTEL TURNOVER TAX

We are an inbound tour operator and we do hotel bookings too. Do we have to register for hotel turnover tax?

No, you are not obliged to register for hotel turnover tax as it only applies to licensed hoteliers. The services that you provide shall therefore be exempt from the 5% hotel turnover tax.

What are the due dates for lodgment of HTT Returns and payment of the related tax?

The HTT Return for any particular month is due for lodgment by the end of the following month and likewise the tax payment.

How do we present our invoices to our guest? Should we present our invoice as inclusive of the HTT in the same manner as we are doing for VAT?

The invoiced amount should be inclusive of the HTT as you are supposed to be charging your clients the HTT amount, collecting it and remitting the same to FIRCA.

We currently operate several dive/water sports concessionaires at various island resorts throughout Fiji. We wish to clarify if turnover tax applies to the services we provide, although in several cases the resorts collect the guest income on our behalf for which we then invoice them, less a predetermined commission.

Hotel Turnover Tax (HTT) of 5% only applies on the turnover of hotels. The services provided by concessionaires are not services/turnover of the hotel even though they get charged to the bills of the hotel guests. But in cases where a third party/agent arranges for individuals/groups to utilise the services of the hotel then the charges in relation only to these hotel services should include HTT, even though the third party/agent is not a licensed hotelier.

We operate a hotel business and would like clarification as to whether we should be charging HTT on the bills for the walk-in guests for our restaurant/bar and the function centre clients.

The charges in relation to services provided by the restaurant/bar and function centre shall all be inclusive of HTT. Note that the turnover of the hotels includes charges for accommodation, refreshment and other hotel charges. HTT is to be charged on all the services of the hotel provided to and utilised by both tourists and locals.