List of VAT Registered Persons
What is Value Added Tax (VAT)?
Value Added Tax (VAT) is a tax on spending that is levied on the supply of goods and services in Fiji at the rate of 15%, with effect from 1 January, 2011. The VAT Decree requires most businesses and organizations involved in taxable activities in Fiji to:
- register with FRCA within 21 days of becoming so liable;
- charge and collect 15% VAT applicable to the range of goods and services they supply;
- lodge their VAT Returns and pay the VAT collected to the Inland Revenue Services when due.
Characteristics of VAT:
1. Tax on Spending
2. Indirect Tax
3. Broad Based Tax
Who must register for VAT?
Any person carrying on a “Taxable Activity” activity (other than a produce supplier) where annual gross turnover has exceeded the registration threshold of $100,000.
How to register?
If required to register, complete all the sections in one of the following relevant forms:
For Sole Traders
• Application of Registration of Sole Trader Businesses form (IRS001) and any of the following ID.
- driver’s licence
- FNPF/FRCA Joint ID Card.
- or any other valid ID
VAT Supplementary Form (Form IRS 018)
For Companies, Estate, Trust and Partnership
• Application of Registration of Companies, Partnerships or Trusts (IRS003). You must submit the following:
•for a partnership(whether or not a written partnership deed exists), a copy of its Partnership Deed/Agreement.
•for a trust (including a unittrust), a copy of its’ Deedof Trust.
•for an estate of a deceased person, a copy of probate statement from the executor.
•for a charitable organization or non-profit body, a copy of its’Certificate of Incorporation and Memorandum/Articles of Association/Registration Certificate.
•for a company whether public or private a copy of its’ Certificate of Incorporation and Memorandum/Articles of Association.
VAT Supplementary Form (Form IRS 018)
When to Collect VAT
The rules governing value, place and time of supply are:
Where most transactions will be at arm’s length (i.e. buyer and seller are not connected, and time of sale will be quite clear). In these instances, the value of supply will be the price paid; the place of supply will be where the item sold is situated; while the tax liability will arise at the earlier of invoicing, payment, or delivery.
If a person is registered on a payments basis VAT will be remitted once payment is made or received, regardless of the tax liability.
What is a Taxable Activity?
Taxable Activity includes:
“Consideration”, in relation to the supply of goods and services to a person, includes any
payment made or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods and services, whether by that person or by any other person, but does not include any payment by any person as an unconditional gift to any non – profit body.
Definition of Taxable Activity excludes the following:
Registered Persons are:
TYPES OF SUPPLIES
WHAT SUPPLIES ARE SUBJECT TO VAT?
Supplies subject to VAT are listed under Section 3 of the Vat Decree [Taxable Supplies]. Section 3 implies the use of word “supply” in a very wide sense.
In relation to goods, a supply is made by way of sale, exchange, lease, hire, hire purchase, lay by
In relation to services, you provide, render, grant or confer.
1.“Deemed Supplies” – treated as supplies for Vat purposes
Goods means all kinds of personal and real property; but does not include choses in action or
2.Exempt Supplies – VAT Decree (Schedule 1)
Link VAT Decree
Exempt supplies include the following:
• supply of accommodation in a residential dwelling;
• supply of education by an educational institution;
• supply of any goods and services incidental to the provision of education by an educational institution;
• supply and provision of the right to partake in any gambling;
• supply by any non-profit body of donated goods and services.
VAT is not chargeable on the supply of exempt goods and services. The supplier will not be able to claim any input tax credit involving purchase or production of exempt supply.
3.Zero Rated Supplies – Second Schedule (VAT Decree Second Schedule)
Link VAT Decree
Zero rate supplies include the following:
(a) tinned fish;
(b) flour and sharps;
c) powdered milk;
(d) edible oil;
VAT is charged at 0% on the supply of goods and services. The supplier can claim any input tax credit involving purchase or production of zero rated supply.
Returns and Taxable Periods
How often will VAT returns have to be furnished?
The period covered by the VAT return is referred to as the taxable period.
Accounting Basis for VAT
How to account for VAT in returns?
How VAT is accounted for depends on the accounting basis that is adopted. Every registered person is required to account for VAT on an Invoice Basis.
Accounting for VAT on an Invoice Basis generally means that in relation to supplies made the registered person accounts for the VAT in the earliest taxable period in which:
•an invoice for the supply is issued, or
•any payment is received
•delivery of goods and services takes place.
However a registered person may apply to account for VAT on payments basis and this will be subject to the Commissioner of Inland Revenue’s discretion. The Payments Basis generally means that the registered person accounts for VAT in the taxable period in which a payment is made or received. The main difference between the invoice basis and the payments basis is that debtors and creditors are not taken into account in determining the total supplies/sales for VAT purposes.
Cancellation of Registration.
A registered person shall cease to be liable to be registered where at any time; the Commissioner of Inland Revenue is satisfied that the value of that person’s taxable supplies in the next 12 months will not exceed FJ$100,000.00.
Where a registered person is a produce supplier he may apply for cancellation of registration at any time after having been registered for a period of twelve months. Every person who ceases to be liable to be registered may request the Commissioner of Inland Revenue in writing to cancel the registration. The Commissioner shall cancel the person’s registration with effect from the last day of the taxable period during which the Commissioner was so satisfied or from such other date as may be determined by the Commissioner. The Commissioner shall notify that person of the date on which the cancellation of registration takes effect.
|2011 to date||15%||3/23|
Once you register, you should start preparing your accounting records to accommodate VAT. To support your VAT charges and input tax credit claims, you must keep tax invoices and other accounting records for at least seven (7) years, and make them available to Audit/Compliance auditors, when requested.
Calculating VAT refunds or payments
As a VAT registered person, you are responsible for filing VAT returns on which you will report:
You claim input tax credits for the VAT paid, or owing, on:
Lodging returns, payments and refunds
Every registered person must “…on or before the last day of the month following the last day of every taxable period, without notice or demand furnish to the Chief Executive Officer a VAT return…” (Section 33 of VAT Decree)
Monthly VAT Returns
|Month Ending||Due Date for Lodgement|
|31 August 2014||30 September 2014|
|31 July 2014||31 August 2014|
|30 June 2014||31 July 2014|
3 Monthly VAT Returns
|Period Ending||Due Date for Lodgement|
|July – September 2014||31 October 2014|
|April – June 2014||31 July 2014|
|January – March 2014||30 April 2014|
Yearly VAT Returns
|Year Ending||Due Date for Lodgement|
|31 December 2012||31 January 2013|
|31 December 2011||31 January 2012|
|31 December 2010||31 January 2012|
Payment must be accompanied with your VAT return if payable and be received by the returns due date.
You are to mail your VAT return to the Taxation Division (Customer Service Centre) office in Suva, Lautoka, Labasa, Savusavu and Rakiraki.
For more information, click on “How VAT Works”.
What it is and when it is charged?
A charge applied to a recipient on the value of supplies received from overseas at the rate of 15%, with effect from 1 January, 2011. Supplies are taxable through the reverse charge provision. Section 21 of the VAT Decree.
Examples of services subject to VAT reverse charges:
Who should account for it and when?
The recipient of the service is required to calculate the output tax on the value of the service and pay the relevant output tax to FRCA. The recipient is treated as the supplier of the service and is also entitled to claim an input credit for the amount paid in the VAT Return.
When should it be accounted for?
The recipient should account for the VAT reverse charges at the time the service is paid for to prevent any unnecessary delay in the issue of related tax clearance.
The following penalties apply under the Tax Administration Decree
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