FAQs – Salary and Wage Earners

REGISTRATION

I don't have a tax identification number (TIN) and would like to know of the requirements for registration. I've just started working with a company as a sales rep and would be earning FJ$15,500 per annum.

You will have to fill in an application form (IRS001) to register as a salary and wage earner, if your chargeable income (i.e. Gross Income less Allowances) is above the tax threshold of FJ$15,500 per annum. You will need to submit with the application form, a certified copy of your birth certificate plus your c ontract of employment/letter from employer and either a copy of your FNPF card, your passport, official ID card or driver's license and wheel tax certificate.

However, if the company engages your services on a contractual basis then you should be registered as a provisional taxpayer. The company is then obliged to deduct 15% provisional tax.

The completed form can be lodged at any of our Customer Enquiry Centres and you will be issued with a TIN after your application is processed.

What are FIRCA's requirements for Ticket Lottery registration?

The requirements for registration are:

  • A copy of the approval from the District Officer's Office
  • Completed form for tocket lottery registration (Form IRS214)

The expected gross sales and contract/agreement with the performing artist needs to be submitted. 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 Centre (CEC).
  • you can send it through the post - certified copies of proof of identity documents need to be provided.

For VAT purposes:

  • At the Customer Enquiry Centre nearest you, so that a site inspection can be done.

How soon will I receive my TIN?

You should receive the TIN within five (5) working days from the date of lodgment of your application.

When can Income Tax & VAT registration 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 level of taxable supplies excluding exempt supplies in a year isl below the turnover threshold of FJ$50,000 for goods and/or services and the person has been registered for at least twelve (12) months may apply for cancellation.
    • 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.

ASSESSABLE INCOME

Are the allowances of staff of overseas missions and military/police subject to tax?

These allowances, which are additional to the normal pay and allowances to which such member would be entitled if serving in Fiji, shall not be chargeable to normal tax regardless of derivation.

I am employed by a British security firm and currently based in Iraq . Am I required to pay FIRCA the tax on income derived in Iraq?

Income derived by security personnel employed by overseas security firms, after accounting for allowances, shall be subject to tax. It is the responsibility of the security personnel and not the overseas security firm to account for the tax to FIRCA unless otherwise specified in the contract.

If the tax is already deducted abroad a tax credited will be allowed by FIRCA upon the submitting of the necessary evidence.

I am a resident individual. Will I be taxed on dividends received from Unit Trust of Fiji?

Dividents received from the following parties are fully exempt in the hands of the recipient:

  • Unit Trust of Fiji
  • All Companies listed on the South Pacific Stock Exchange

Dividend Income received from parties other than those listed above is fully exempt only if already taxed at corporate level. Otherwise a determination will be made by the Commissioner on the amount to be taxed further in the hand of the recipient. If you have returned income from dividends, and are entitled to a deduction for that dividend income, you are to attach to your tax return, the original copy of your dividend certificate as evidence.

 

ALLOWABLE DEDUCTIONS

I have five children and the eldest is 18 years old and still attending school. How much am I entitled to claim for child allowances?

A maximum of five (5) children can be claimed. The allowance is FJ$500 for the first two (2) children and FJ$300 each for the next three (3) children. So in your case you are entitled to claim FJ$1,900.

You can only claim allowances for your biological, step or legally adopted children who are under 18 years of age or between 18 and 27 years of age (if full-time at school, college/universities or other educational establishments). For children over 18 years and below 27 years, written evidence that they are still attending school or any tertiary institution needs to be submitted.

TAX REFUND CLAIMS

How long does it take to process income tax returns?

It takes four to six weeks to process salary & wage earner returns.

I still haven't lodged my salary & wage earner return and I am expecting a tax refund. Will FIRCA release the refund once my return is processed?

FIRCA will only release refunds within three (3) years from the end of year of assessment. However, the refund will not be released if you have any outstanding tax matters.

If no claim is made within within three (3) years from the end of year of assessment, refund is forfeited.

How do you deal with the case where a taxpayer dies and the spouse wishes to claim for the taxpayer's tax refund?

The spouse will have to lodge the return with a covering letter, probate statement, the death, marriage and birth certificates.

What usually holds up the processing of income tax returns for taxpayers who receive redundancy packages?

At times taxpayers and employers do not give the full details on the redundancy package which only delays the assessment and processing of the taxpayer's return.Redundancy payments are tax-free up to FJ$15,000 and subject to a tax rate of 15% on the balance over FJ$15,000 . The payments have to be declared by the taxpayer in his or her income tax return.

To allow FIRCA to process the tax return of an employee receiving a redundancy package, the employer has to provide the following details:

  • 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.

Can any of my refunds be offset against my personal tax liabilities?

Yes, your VAT and Income Tax refunds can be offset against your VAT and income tax liabilities.

TAX PAYMENTS

What is the due date for payment of VAT & income tax?

VAT – The VAT payment is due on the same date the VAT return lodgment is due. For example where a person is required to lodge on a monthly basis, the payment is due with the return on a monthly basis. Where a person is required to lodge on a three monthly basis, then the payment is due when the three monthly return is due.

Income Tax - The income tax payment is due 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's (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 thirty (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

It 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.

RETURNS LODGMENT

I plan to migrate overseas and will continue to derive interest income from my term deposits with a local bank. Where do I declare this income?

You will still need to declare the bank interest derived from Fiji in your tax return to be lodged in that overseas country.

Since the interest income is sourced in Fiji it will be subject to interest withholding tax. However, you will be given a credit in the overseas country for the tax deducted in Fiji.

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

Income tax returns should be lodged by the 31st of March each year for all salary & wage earners. Lodgment of tax returns is now staggered in line with the tax agents lodgment programme and applies to taxpayers who engage the services of tax agents who will apply on behalf of their clients.

However, if you do not engage a tax agent, you have to apply directly to the Lodgment Enforcement Unit (LEU) for extension of time for lodgment of your return.

I haven't been lodging income tax returns for the past three years as my employer hasn't been issuing me with a PAYE employee certificate. Am I obliged to lodge these returns and liable to pay any tax dues?

Yes, you still have to lodge your outstanding returns. The Authority can investigate your employer to find out why you have not been issued with a PAYE employee certificate and find out whether they have or have not deducted any tax.

The employer is obliged under the Income Tax Act; in particular the employments regulations to deduct and remit the PAYE tax and to issue you with an employee certificate. So the employer can be penalised for failing to follow to these regulations.

Every person from whose emoluments any amount shall be deducted pursuant to the employments regulations shall, upon the amount being so deducted, be deemed to have paid the same and shall thereupon cease to be liable for payment of tax to the extent of the amount so deducted.

EMPLOYEE OBLIGATIONS

How do I ensure that my employer deducts the right amount of tax every pay? I usually end up paying more tax after I receive my Notice of Assessment.

You will only end up paying more tax if you had failed to inform your employer of the correct personal allowances you are entitled to. And also if your employer failed to deduct tax on certain taxable fringe benefits provided to you or inaccurately calculated the tax amount.

It is recommended that you complete an Employee Declaration Form (IRS458) and file it with your employer. This will ensure correct deduction of PAYE tax in accordance with your allowances. You may also verify with your employer the correct amount of tax has been deducted from your pay.