The two categories of provisional tax payments are:
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:
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 formas 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:
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
A company is required to make four (4) advance payments of tax, with effect from 1 January, 2012:
Insufficient Advance Payment Penalty Calculation
Company X has paid $2000 advance tax for 2012. Upon assessment, the tax payable is $3000 for same year. Therefore the company has short paid the 2012 advance tax by $1000.
Hence In sufficient Advance Payment Penalty
40% * ($3000-$2000) = $400.00
For income year 2011 and before the advance payment of tax by every company to the Chief Executive Officer may continue under the percentage and installment payment of tax applied before the commencement of this Decree.
The advance payment will be allowed as a credit against the tax due on assessment.
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