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

 

Tax Payments

What is the due date for payment of VAT & Income Tax?

Income Tax liabilities should be settled within one (1) month from the date of Notice of Assessment. VAT liabilities are due on the date the return lodgement is due.

What is a Time-To-Pay Arrangement (TTPA)?

A time-to-pay arrangement is an arrangement where the taxpayer requests to make instalment payments to FRCA, when they cannot make the full payment due to financial constraints. This only applies for income tax debts. Our Debt Management Service (DMS) is the only Section that handles TTP arrangements. Arrangements are done on a case by case basis subject to certain requirements.

What are the requirements that a taxpayer should meet to qualify for TTPA?

  • put forward a proposal for payment of their debt in full within three (3) months or the shortest possible timeframe.
  • taxpayer has put down reasons as to why he/she cannot pay the debt in full amount.
  • forward a payment (1/2 of the amount owing or in discretionary cases, whatever amount the taxpayer can pay provided evidence is submitted) at the time of the proposal to demonstrate a commitment to pay.
  • all outstanding returns have to be lodged prior to TTPA.

Am I entitled to a reduction or full waiver of penalties?

Only the late payment penalties (LPP) may be reduced or fully waived unless & until the real tax is paid up front at the Chief Executive Officer’s discretion. In certain cases full penalties have to be paid if the Chief Executive Officer so decides.

Can the Chief Executive Officer recover tax debts from third parties owing money to or holding money for the taxpayer?

The Chief Executive Officer has the power to garnishee these individuals’ bank accounts and/or rental income. Garnishee is a legal document issued with the authority of the CEO of FRCA which states the debts due or accruing to the taxpayer from a third party (the garnishee) in order to satisfy the debt.

What is the difference between provisional tax and withholding tax and when should these be deducted and paid?

  • Provisional Tax - under the terms of Legal Notice No. 70, where 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 FRCA within 30 days after the end of the month in which the deduction was made.

Any such deduction will be allowed as a credit against any tax assessed on the payee. Legal Notice No. 70 facilitates the payment of Provisional Tax payable by taxpayers, who are in receipt of commission income or income from the performance of contracts for services, by means of deductions at source from gross payments due to them from such commissions or contract payments.

  • withholding tax – is tax deducted for income such as dividend, interest, royalty that is received by a taxpayer whether a resident or non-resident. It also applies to payments received for the hire or rent of films or the use whether by way of purchase or long-term hire.

Examples:

  • non-resident dividend withholding tax – 15%.
  • non-resident interest withholding tax – 10%.
  • non-resident miscellaneous withholding Tax – 15%
  • resident interest withholding tax – 20%
  • royalty withholding tax – 15%
  • resident dividend tax – 15%. Any dividend paid by a company operating under the Tax Free Factory Decree 1991 to a resident shareholder.

I am a company who may do some business in your country in the near future. Can I apply for a Certificate of Exemption (COE) from withholding tax?
The COE provision is only available to provisional taxpayers, particularly those who are engaged in contracts for service. There is no exemption available for the deduction of withholding taxes (apart from bank interest for residents).

What taxes are levied to overseas performing artists and promoters?

Individual artists are levied a tax of 20% on their gross income for services performed in Fiji. Group income is assessed as a whole if breakdown is not provided. Net income is usually grossed up. Assessment of income tax raised is based on contract. Both resident and non-resident promoters are to lodge their return of income and profit & loss statement within fourteen (14) days.

My company is contracted to a government ministry to provide cleaning services. I have been told that they will be deducting provisional tax of 15% and remit me the balance of payment. Could you enlighten me further on this issue, as I am not aware of this requirement?

Under the provisional tax system where 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 FRCA within 30 days after the end of the month in which the deduction was made. The threshold is FJ$300 and provisional tax of 15% shall be applied on annual payments provided it exceeds the threshold amount. For additional information please refer Legal Notice 70.

Any such deduction will be allowed as a credit against any tax assessed on your company after the related year’s original return of income is assessed. The system facilitates the payment of provisional tax payable by taxpayers, who are in receipt of commission income or income from the performance of contracts for services, by means of deductions at source from gross payments due to them from such commissions or contract payments.

If you have a valid Certificate of Exemption (COE), this can be presented to the payer and thus 15% provisional tax will not be deducted from your payment.

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& Ratu Sukuna Road,
Nasese,
Suva.
Phone: (+679) 3243000
Fax: (+679) 3315537
Email: info@frcs.org.fj