Resident Interest Withholding Final Tax

Effective from 1^st August 2018, a resident company or permanent establishment in Fiji of a non-resident company is required to deduct 10% Withholding Tax from interest payments to its customers who are resident persons. This 10% withholding tax is not required to be withheld if the payment is to a) financial institution, or b) the customer who is a resident person holds a valid certificate of exemption.

Resident Interest Withholding Tax is a final tax which means that the gross amount of any interest income paid or credited to resident individuals by a financial institution in Fiji will be taxed at a fixed rate of 10% and will not be assessed under tax table, is not reduced by any deduction, and tax withheld is not reduced by any credits under the Income tax act.  However if the RIWT has been over deducted, the taxpayer may lodge a NRIWT/RIWT Refund Form. However if the RIWT has been over or incorrectly deducted, the taxpayer may file a tax return.

Previous years interest withholding tax rates

Exemptions from Resident Interest Withholding Tax (RIWT)

The 10% RIWT must be withheld from gross amount of interest except if CEO issues a certificate of exemption to a resident person on the basis that the interest is exempt as prescribed by regulations made under the Income tax act. The following amounts are exempt income pursuant to Part 4 of Regulation 3 of the Income tax (exempt income) regulations.

1.)  With effect from 1st August 2021 the interest income earned by an individual whose gross income is $30,000 or less in a year can apply for exemption.

2.)   Senior Citizens and Pensioners

With effect from 1^st August 2021, all senior citizens (55 years old or above) and pensioners who earn interest income up to $30,000 are eligible to apply for a Certificate Of Exemption from RIWT provided their only additional source of income is Fiji government/ FNPF pension. The requirements for pensioners and senior citizens to qualify for COE are stated below:

Pensioners

– must be receiving pension or had received pension from an approved fund (e.g. FNPF, Fiji government   pension, other approved fund)

– total annual interest income must not be more than $30,000.00;

– FNPF/ approved fund of Fiji government pensioner can qualify for exemption by any amount and any age provided their only additional income is interest below $30,000 .

Senior Citizens

– must be 55 years old or above;

– total annual interest income must not be more than $30,000;

– current source of income must be from interest only; except if other income is FNPF / Fiji government pension income as stated above;

The Resident Interest Withholding Tax exemption on interest income less than $1,000 will be removed (effective 1 January 2024).

What are the requirements for the application of RIWT Exemption Certificate?

RIWT is collected by banks from interest paid, if the source of the deposit is not exempt income. Tax exempt persons need to have a COE to avoid having RIWT deducted from their interest. A certificate of exemption will only be issued to the following bank account categories;

• Term deposits
• Fixed deposits

Before a COE will be given, the applicant must:

• have all their tax returns lodged and
• have all their taxes paid and
• be able to explain the source of the funds on which interest is earned.

If the applicant does not have a TIN, they must complete the form sign up first as a new taxpayer as well as request for exemption on the portal.  

 Which form must be completed to obtain the RIWT exemption certificate?

1. Through the Taxpayer Online Service (TPOS) Portal; or
2. Taxpayer Request for RIWT Certificate of Exemption form – TPR/RIWTCOE 2022 

Once this certificate is presented, the bank is not required to deduct RIWT.

Where to lodge your application

Apply through Taxpayer Online Service (TPOS) https://tpos.frcs.org.fj/taxpayerportal/#/Logon  or visit any FRCS office.

How long does it take to process an application for RIWT?

It should be processed within a day. If an application is incomplete or if we require more information, we will contact the applicant.

It will be processed within 2 to 3 working days. If an application is incomplete or if we require more information the applicant will be informed through turnaround notes.

Validity of COE: The Certificate is valid till the maturity date. The Certificate is valid till the current year.

What happens if RIWT is deducted before the RIWT COE is produced?

Individuals and non-profit bodies that have been incorrectly taxed can claim for a refund from FRCS. They must file tax return through their portal.

Further information

For further assistance on Resident interest withholding tax , you may send an email to info@frcs.org.fj

or call us on 3243000 or 1326.