The Audit & Compliance division of Taxation is responsible to deter and detect non-compliance with tax obligations. There are offices in Lautoka and Labasa who are responsible for the western & northern division and part of the maritime zone. The Suva office is responsible for the central division and remaining islands of the maritime zone.
The Suva and Lautoka regional offices comprise of teams aligned to the segments of the taxpayer community i.e. Small & Medium, Large and International who are responsible for auditing across the entire range of tax types. The Labasa regional office has a mix of Large and Small & Medium team setup.
Large & International taxpayers have complex finance & business structure, multiple operating entities & international business dealings, cross border and tax transactions with related parties, high volume of transactions and contribute a significant portion of tax revenue.
Small & Medium taxpayers comprise of the majority number of taxpayers, high risk cash transaction, deficient document & record keeping and internal control operating structures.
The Suva regional office additionally has teams dedicated for the single tax type audits of Value Added Tax (VAT) and compliance activities for refund & deregistration returns, new dwelling house applications, and technical issues.
Also based in Suva is the Fraud & Evasion team who is responsible for auditing across entire range of tax types and recent initiative to conduct tax offence investigations to pursue prosecution proceedings.
Tax fraud include but are not limited to hiding income and bank accounts, hiding income in nominee bank accounts, hiding assets, creating false & altered documents and invoices, maintaining more than one set of accounting records, making false entries & alterations in accounting records, destroying accounting records before required time limits have expired without approval of CEO, non-remittance to FRCA of taxes e.g. PAYE, VAT, Levies etc
The latest Suva regional office formation is the Transfer Pricing team whose intention is to focus and develop specialist auditing expertise and experience for transfer pricing issues.
Transfer pricing has become one of the most important international tax issues around the globe and it is therefore timely that Fiji should be addressing this matter. Transfer pricing rules apply to all sectors of the economy involving international transactions between associated parties.
The transfer prices adopted by a Multinational Enterprise have a direct bearing on the profit it derives in each country in which it has operations. If too little or too much is paid for the transfer of goods and services, the income will be understated. As a result the host country will not be getting its fair share of the total tax take.
As a general example, consider a group member in Fiji which sells goods overseas to an associated company, at a price that is less than the market selling price. The profit earned in Fiji is therefore reduced. Similarly, if a Fiji company purchases goods or services from an offshore group member at an inflated price, the profit it earns in Fiji is similarly reduced.
Transfer pricing is therefore concerned with manipulating prices either by paying too little or too much for goods and services resulting in “shifting profits” from one country to another.
FRCA adopts the positions outlined in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, and proposes to follow these guidelines in administering Fiji’s transfer pricing rules. Consequently, these guidelines supplement the OECD guidelines, rather than supersede them.
The principle reason why FRCA has drafted its own guidelines is to provide a practical Fiji focus on issues. This also assists in explaining transfer pricing in a way that is more accessible to taxpayers and advisors dealing with transfer pricing matters than the OECD guidelines.
The Transfer Pricing Team activities are as follows:
Target taxpayers who:
Encourage civic moral duty of tax compliance to support:
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