Provisional Tax /Company Advance Tax

Business & Self-Employed

The two categories of provisional tax payments are:

  • 15% provisional tax on contractual payments.
  • assessed provisional tax for sole traders.

Who is required to deduct the 15% provisional tax?

Under the terms of Legal Notice .70where 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 by the end of the month following the month in which the deduction was made. Any such deduction will be allowed as a credit against any tax assessed on the payee. The payer is required to get registeredas a provisional tax payer with PAYE Section if you are not already registered.

Real Estate Agents are also required to withhold and pay 15% provisional tax on rental income.

The provisional tax will not be deducted if the total amount to be paid to any one person in aggregate in any year is less than the provisional tax threshold of FJ$300 (effective from 1 January, 2005).The provisional tax will also not be deducted by the payer if the contracted party has a valid Certificate of Exemption issued by FRCA. Before a Certificate of Exemption will be given, the applicant must:

  • have all their tax returns lodged.
  • have all their taxes paid.

The above requirements shall also apply for shareholders and directors of a company.

If the applicant does not have a TIN, they must complete the form 

as well as the

Assessed provisional tax for sole traders

Self-employed taxpayers are covered by a provisional tax (PT) system under section 85 of the Income Tax Actwhich requires payment of tax in advance. The amount of provisional tax is calculated by reference to the amount of tax payable in the preceding year and is divisible by three (3).

The due dates for payment are:

  • 30 April.
  • 31 August.
  • 30 November.

Provisional Tax paid will be allowed as a credit against the tax due on assessment of the actual liability for the year.

Company Advance Tax

Advance tax is a way that companies can pay the tax towards the income tax liability on its income, during the income year based on the previous year’s assessment. For example, the 2014 income year, the amount to pay is based on the 2013 assessment.

A company is required to make three (3) advance payments of tax, with effect from 1 January, 2013:

  • 33.3% to be paid not later than the last day of the sixth month of current fiscal year.
  • 33.3% to be paid not later than the last day of the ninth month of current fiscal year.
  • 33.4% to be paid not later than the last day of current fiscal year.

 

Tax Year/Year of Assessment Fiscal Year End 1st ADV Due in 2nd ADV Due in  3rd ADV Due in

 2013

 Jan-14

 Jul-13

 Oct-13

 Jan-14

 2013

 Feb-14

 Aug-13

 Nov-13

 Feb-14

 2013          Mar-14          Sep-13          Dec-13          Mar-14
 2013          Apr-14          Oct-13          Jan-14          Apr-14
           2013          May-14          Nov-13          Feb-14          May-14
           2013          June-14          Dec-13          Mar-14          Jun-14
           2014          Jul-14          Jan-14          Apr-14          Jul-14
           2014          Aug-14          Feb-14          May-14          Aug-14
           2014          Sep-14          Mar-14          Jun-14          Sep-14
           2014          Oct-14          Apr-14          Jul-14          Oct-14
           2014          Nov-14          May-14          Aug-14          Nov-14
           2014          Dec-14          Jun-14          Sep-14          Dec-14
           2014          Jan-15          Jul-14          Oct-14          Jan-15
           2014          Feb-15          Aug-14          Nov-14          Mar-15
           2014          Mar-15          Sep-14          Dec-14          Apr-15
           2014          Apr-15          Oct-14          Jan-15          May-15
           2014          May-15          Nov-14          Feb-15          Jun-15
           2014          Jun-15          Dec-14          Mar-15          Jul-15

Note:

IAPP applies whenever there is a shortfall in each installment.

The penalty is 40% of the shortfall as calculated below:

 

Income Year 2013

Example

Company Y’s income year calender year which ends at December 31

Year Ending 31/12/13

- 2012 tax payable – $85,000

- 2013 advance tax payable- $85,000


Installment Due date Advance tax payable Amount paid Shortfall IAPP(40% of the shortfall)

1

30/06/13 $28305($85000 x 33.3%) 0 $28305 $11322 ($28305 x 40 %)

2

30/09/13 $28305($85000 x 33.3%) $28400 $28210 $11284 ($28210 x 40%)

3

31/12/13 $28390($85000 x 33.4%) $28,000 $28600 $11440 ($28600 x 40 %)

Total

  $85000 $56400 $28695 $34046

 

 

Further information:

Contact Us or alternatively by email: (tepu@frca.org.fj, cectaxquerysuv@frca.org.fj or info@frca.org.fj).

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