Taxation Business FAQ’s

Registration
Assessable Income
Allowable Deductions
Tax Payments
Returns Lodgement
VAT Supplies
VAT Exempt Supplies
Zero Rated Supplies
Service Turnover Tax
Employers
Fringe Benefits Tax
Social Responsibility Tax
Telecommunications Levy
Credit Card Levy
Third Party Insurance Levy

 

Allowable Deductions

What are the requirements for becoming an approved organisation to which donors could qualify for a tax deduction under the provisions of Section 21(n) of the Income Tax Act?

The organisation must first be registered under the Charitable Trusts Act.

In considering the taxable status, the organisation’s constitution is perused to ensure that it meets the criteria set out in Section 17(5) of the Income Tax Act.
The features are:

  • it must be a body of persons or irrevocable trust of a public character whose activities should benefit all the residents of Fiji.
  • it could be set up for any of the following purposes:
    • The relief of poverty
    • The distress of the public.
    • The advancement of religion.
    • The advancement of education.
  • The proviso states that any income from a business will be taxable unless the profits are applied for the purpose for which the organization was set up.

The organisation needs to submit a formal written application to the Chief Executive Officer with the following documents:

  • a copy of the organization’s constitution and
  • a copy of the registration certificate under the Charitable Trust Act.

In considering whether an organisation should be listed as an approved charitable organisation, the following factors are considered:

  • It must be of a public character i.e. membership should not be restricted to any particular group.
  • The benefit of the charity must be available to all Fiji citizens (i.e. It should not be confined to any group, race, creed or religion).

The decision by Chief Executive Officer will be based on the information provided.

What sort of repairs and maintenance expenses are businesses allowed to claim as a deduction for income tax purposes?

Businesses are only allowed to claim repairs and maintenance expenses incurred for:

  • assets that are owned by the business; and
  • which involve repair of the asset with the same material or similar kind of material to restore the original state of the asset.

On-going maintenance such as motor vehicle and air conditioner servicing are deductible.

Is our company allowed to claim legal fees incurred in relation to securing a business deal with another party?

Legal expenses that are allowable for income tax purposes are those incurred in the course of earning income (e.g. relating to preparation of business contracts, leases and for the purpose of debt recovery). Legal expenses of a capital nature are not allowable, such as relating to change in shareholding or sale and purchase of a business.

Can our company treat parking fees and fines as an allowable deduction for income tax purposes?

Your company may claim parking fees if it is incurred for business purpose as it is an expense or loss connected to the nature of the trade. You are not entitled to claim parking fines as they are a punishment for illegal behaviour, not in connection with the nature of a trade.

How long does it take now to process Income Tax & VAT returns for businesses?

It takes three to four weeks to process business Income Tax & VAT returns.

Are we still allowed by FRCA to claim for a tax refund if we lodge our return one year or more from end of year of assessment?

Yes, you are entitled to get a refund even if you lodge your return after one year has lapsed without being charged any late lodgement penalties. You will only be charged late lodgement penalties if it is a payable case.

As a general rule you must make a claim for refund within three (3) years from the end of year of assessment. If you make a claim after three (3) years has lapsed, the refund is forfeited and is referred to the Public Trustee.

Can my refunds be offset against my business’s tax liabilities?
Income Tax, VAT and other tax refunds are offset against any tax liabilities of a taxpayer. However, PAYE tax cannot be offset against any refunds.

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CONTACT DETAILS

Revenue & Customs Service Complex,
Lot 1 Corner of Queen Elizabeth Drive
& Ratu Sukuna Road,
Nasese,
Suva.
Phone: (+679) 3243000
Fax: (+679) 3315537
Email: info@frcs.org.fj