Taxation – Penalties and Offences

Sanction

Failure to Maintain Proper Records

Administrative penalty of 75% of amount of tax payable in period of knowingly or recklessly failure to keep, maintain or retain accounts, documents and records; or

Administrative penalty of 25% of amount of tax payable in period of any other case of failure to keep, maintain or retain accounts, documents and records.

Tax Offence fine not exceeding FJ$5,000 or to imprisonment for a term not exceeding 6 months or both a fine and imprisonment if knowingly or recklessly fails to keep, maintain or retain accounts, documents and records.

Audit Access

Physical (Search & Entry) access

  • allowable only to FRCA officers who produce the CEO’s written authority to the owner or lawful occupier of the premises, place or property;

CEO’s authority is in the form of a warrant card specifying the legislative authority and photo identification of the FRCA officer.

  • at all times and with or without notice;
  • to full and free access to any premises, place, property, accounts, documents, records, or data storage device;
  • make an extract, copy, or seize accounts, documents, records, or data storage device;
  • is not prohibited by law relating to privilege or the public interest or any contractual duty of confidentiality.

Written Access

  • by Administrative Summons notice;
  • to any person;
  • to furnish any information;
  • to produce any accounts, documents, records;
  • to attend & provide evidence of any person;
  • is not prohibited by law relating to privilege or the public interest or any contractual duty of confidentiality.

International Access

Overseas Information retrieval for a multinational enterprises (MNE) parent company or foreign subsidiary is subject to tax treaty protocols referred to as a Double Taxation Agreement (DTA) between Fiji and another country.

Improper Use of Taxpayer Identification Number

Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for a person who uses a false Tax Identification Number on any tax return or document prescribe or used for the purposes of a tax law.

Tax Offence fine not exceeding FJ$10,000 or to imprisonment for a term not exceeding 12 months or both a fine and imprisonment for a person who fails to apply for cancellation of their Tax Identification Number.

Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for a person who fraudulently obtains a Tax Identification Number using false or forged documents.

False or Misleading Statement

Administrative penalty of 75% of amount of tax shortfall in period of tax liability due to a knowingly or recklessly false or misleading statement (written/oral) in a material particular or omission of any matter or thing without which the statement is false or misleading in a material particular; or

Administrative penalty of 25% of amount of tax shortfall in period of tax liability due to any other case of false or misleading statement (written/oral) in a material particular or omission of any matter or thing without which the statement is false or misleading in a material particular.

The amount of administrative penalty will increase by 10% points if it is the second application of a false or misleading statement (written/oral) in a material particular or omission of any matter or thing without which the statement is false or misleading in a material particular; or

The amount of administrative penalty will increase by 25% points if it is the third or subsequent application of a false or misleading statement (written/oral) in a material particular or omission of any matter or thing without which the statement is false or misleading in a material particular.

The amount of administrative penalty can be reduced by 10% points if the statement is voluntarily disclosed prior to the earlier of the discovery of the tax shortfall or the commencement of an audit of the tax affairs of the person to whom the statement relates.
Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for knowingly or recklessly false or misleading statement (written/oral) in a material particular or omission of any matter or thing without which the statement is false or misleading in a material particular.

Offences by Tax Officers

Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for a tax officer /person who directly or indirectly asks/offers for, or takes/gives in connection with any of the officer’s duties, and payment or reward whatsoever, whether pecuniary or otherwise, or promise or security for any such payment or reward, not being a payment or reward that the officer was lawfully entitled to receive.

Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for a tax officer /person who enters into or acquiesces in any agreement to –

Obstruction of Tax Officer

Tax Offence fine not exceeding FJ$25,000 or to imprisonment for a term not exceeding 24 months or both a fine and imprisonment for a person who obstructs a tax officer in the performance of duties under a tax law

Failure to Comply with Administrative Summons

Tax Offence fine not exceeding FJ$15,000 or to imprisonment for a term not exceeding 12 months or both a fine and imprisonment

Failure to Provide Facilities and Assistance for Entry and Search

Tax Offence fine not exceeding FJ$15,000 or to imprisonment for a term not exceeding 12 months or both a fine and imprisonment

Aiding or Abetting a Taxation Offence

A person who aids, abets, assists, incites, or induces another person to commit an offence under a tax law (referred to as the “principal offence”) commits an offence and is liable for the same sanction as imposed for the principal offence.

Former and current officers of FRCA are not permitted to request/receive bribes in connection with the officer’s duties which he/she is not lawfully entitled to receive.

  • do any act or thing;
  • abstain from doing any act or thing;
  • permit or connive in the doing of any act or thing; or
  • conceals any act or thing

whereby the Government is or may be defrauded of revenue, or that is contrary to the provisions of a tax law or to the proper execution of the officer’s duty.

Audit Process

Initial audit notification

  • A letter will be issued to notify of an audit, audit requirements and request a confirmation to an initial interview request or alternative proposal from the taxpayer.

Initial Interview

  • Conduct of interview and business and/or private premises site visitation with a taxpayer or taxpayer representative and/or tax agent to obtain a understanding of the business and/or personal, operations, accounting systems and internal control, tax return procedures and practices.

Proposed Schedule of Discrepancy

  • The taxpayers’ or taxpayer representatives and/or tax agent will be informed (oral and in writing) of schedule of discrepancy proposal(s) for tax audit objective assessment findings and be granted time frame for a response.
  • The schedule of discrepancy proposal is to be evaluated and accounts, documents and records to support disagreeable tax audit objective assessment findings be submitted with the taxpayers’ response (in writing).
  • There will be additional audit reconsideration and appropriate substantiated changes to the schedule of discrepancy proposal draft to derive the final schedule of discrepancy.

Audit

  • Performance of audit procedures of direct or indirect techniques to verify tax audit objectives derived from an audit plan.
  • The scope, area and period of audit procedure coverage will be consistent with the taxpayer’s extent of complexity and risk. Audit plans will be modified (additions or deletions) as new information & risks come to light as the audit progresses.
  • Gathering of pertinent business and/or private information, accounts, documents and records during audit inquiries (oral and in writing) from the taxpayer or third parties as audit trail disclosures and evidence basis to determine tax audit objectives assessments.

Final audit notification

  • The taxpayers’ or taxpayer representatives and/or tax agent will be informed (oral and in writing) of final tax audit findings and whether there is no change in tax status or tax refund entitlement or increase in tax liability plus tax shortfall penalty. If there is a change in tax status, notification will include:
    • Final Schedule of Discrepancy to provide detailed explanation of alterations and additions
    • Original or Amended Notice of Assessment(s)

Objection Process

  • If there is dissatisfaction with the tax audit assessments than an Objection may be lodged to the CEO within 60 days of the date of the Notice of Assessments limited to the alterations and additions made.
  • An application in writing can be made to the CEO for an extension of time to lodge an Objection. If there is reasonable cause, CEO may grant approval and notify the applicant.
  • The Objection should be in the approved form stating fully and in detail the grounds upon which the taxpayer relies to support the Objection
  • The CEO may request additional information or else an Objection decision will be made to either allow the Objection in whole or part, or disallow it.

Tax Tribunal Process

  • If there is dissatisfaction with the Objection findings than an application may be lodged to the Tax Tribunal within 30 days of the date of the Objection decision.
  • A copy of the application must also be served to the CEO or the Tax Agents Board within 5 consecutive days of lodging to the Tax Tribunal.
  • An application in writing can be made to the Tax Tribunal for approval of an extension of time to lodge an application.
  • The Tax Tribunal application should be in the approved form, include a statement of the reasons for the application and accompanied by the prescribed fee.
  • The Tax Tribunal may make an order to:
    • affirm, reduce, increase, or otherwise vary the assessment to which the objection decision relates;
    • remit the assessment to the CEO for reconsideration in accordance with the directions of the Tribunal;
    • refer a question of law to the Tax Court for its opinion
    • transfer proceedings to the Tax Court

Contact

Mr. Sailosi Ledua
Chief Auditor – Transfer Pricing Unit
Phone: 3243630 or email: sledua@frcs.org.fj

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HEAD OFFICE LOCATION

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