Value Added Tax (VAT) - Fiji Revenue & Customs Service (2023)

Active VAT Registered

• List of VAT Registered Tax payer (as at 9th June 2022)*NEW

Businesses

What is Value Added Tax (VAT)?

Value Added Tax (VAT) is a tax on spending that islevied on the supply of goods and services in Fiji.

It is charged at rate of 0%, 9% and 15%. The VAT Act requires most businesses and organisations involved in taxable activities in Fiji to;

• register for VAT with FRCS within 21 days of becoming so liable
• Charge and collect VAT applicable to the range of goods and services they supply
• Submit VAT returns and pay the VAT collected to FRCS when due online.

Effective 01/04/2022, new rates applicable on goods and services as follows:

• Click >>HERE<< for zero rating items and 15% rated goods and services
  • Click here for description of Services – attach PN https://www.frcs.org.fj/wp-content/uploads/2022/04/15-VAT-on-Services-1st-April-2022.pdf

Characteristics of VAT

Tax on Spending

• This is a tax on spending, borne and paid by the final consumer on goods andservices.
• Goods and services can be supplied by Registered Persons, Government Departments and Non – Profit Organizations.

Indirect Tax

• It is said to be an indirect tax in the sense that it is not deducted directly from wages and salaries. An example of a direct tax is PAYE. It is deducted directly from the wages or salaries before we receive our pay. Unlike VAT, you pay VAT when you spend and that is why it is said to be paid indirectly.

Broad Based Tax

• VAT is said to be a broad based tax because it covers a wide range of goods and services in its tax net.
• Likewise it covers a lot of people regardless whether you’re employed or unemployed. Once you spend, you pay.

Who must register for VAT?

Any person carrying on a “Taxable Activity” (other than a produce supplier) where annual gross turnover exceeds the registration threshold of $100,000.

Deemed Registration

• Any person who carries on a taxable activity (other than a produce supplier) where annual gross turnover has exceeded the threshold of $100,000.

Voluntary Registration

• Produce Suppliers
• Persons carrying on taxable activity where annual gross turnover < $100,000.

Produce Suppliers

• Are those who supply produce in a raw and unprocessed state and;
• Whose produce constitutes at least 90% of the total value of supplies and the balance of the goods and services supplied by that person is produce but not in a raw and unprocessed state.

TYPES OF SUPPLIES

WHAT SUPPLIES ARE SUBJECT TO VAT?

Supplies subject to VAT are listed under Section 3 of the Vat Decree [Taxable Supplies]. Section 3 implies the use of word “supply” in a very wide sense.

In relation to goods, a supply is made by way of sale, exchange, lease, hire, hire purchase, lay-by etc.

In relation to services, you provide, render, grant or confer.

1. “Deemed Supplies”– treated as supplies for Vat purposes

• Goods and services appropriated to other use [non – taxable]. Adjustment for input tax already claimed where the good or services are not used in the taxable activity.
• Sale in satisfaction of a debt [ where the seized goods or services were part of the taxable activity]
• Assets retained on cessation of business or upon deregistration.
• Grants received from state
• Supplies by public authorities
• Supplies by local authorities.
• Insurance indemnities received.
• Monies retained upon cancellation of lay-by sales.
• Provision of employee benefit if not zero-rated or exempt.
• Disposal of taxable activity as a going concern.
• Prescribed medicines
• Imported fish supplied to fish processors
• Residential accommodation only for residential apartments that provide hotel like accommodation and facilities (compulsory where turnover exceeds $100,000 or otherwise could register voluntarily). Residential apartment that provide hotel like accommodation and facilities are those that provide:
  • Self-serviced or self-contained apartments/flats (beds/TV set/drawers/Air condition/Fans);
  • Security Services;
  • Laundry Services;
  • Housekeeping Services;
  • Free TV channels;
  • Provision of swimming pools;
  • Provision of meals; and
  • Provision of Recreational Area example a gym.

Goods means all kinds of personal and real property; but does not include choses in action or money.

2. Exempt Supplies – VAT Act (Schedule 1)

Exempt supplies include the following:

• Supply of financial services;

• Person engaged in the supply of residential accommodation, irrespective of the annual gross turnover will be exempted from VAT;
• supply of education by an educational institution;
• supply of any goods and services incidental to the provision of education by an educational institution;
• supply and provision of the right to partake in any gambling;
• supply by any non-profit body of donated goods and services.

• VAT is not chargeable on the supply of exempt goods and services. The supplier will not be able to claim any input tax credit involving purchase or production of exempt supply.

3. Zero Rated Supplies – VAT Act (Second Schedule)

Zero rate supplies include the following:

• Exported goods
• Supplies of ship stores
• Supply of taxable activity as a going concern to another registered person
• Services in connection with goods outside Fiji.
• Baby Milk, Canned Fish, Cooking Gas, Cooking Oil, Dhal, Flour, Garlic, Kerosene, Liquid Milk, Onion and Shallots, Potatoes, Powdered Milk, Rice, Salt, Sanitary Pads, Soap, Soap Powder & detergents, Sugar, Tea, Toilet Paper, Toothpaste

VAT is charged at 0% on the supply of goods and services. The supplier can claim any input tax credit involving purchase or production of zero rated supply.

How to Register for VAT?

Taxpayers can register for VAT when they are applying for a TIN. Taxpayer needs to access Taxpayer Online Services (TPOS) portal from FRCS website, click here to access portal https://tpos.frcs.org.fj/taxpayerportal/#/Logon.

Refer to the user guides and Tutorial videos for more information: https://www.frcs.org.fj/our-services/taxpayer-online-service-tpos/users-guide/ https://www.frcs.org.fj/our-services/taxpayer-online-service-tpos/tpos-tutorial-videos/

Returns and Taxable Periods

The period covered by the VAT return is referred to as the taxable period. When registering on TPOS, taxpayer will have option to select on the taxable period based on the annual gross turnover of the businesses as follows;

• $300,001.00 or more, will have to submit monthly returns.
• $300,000 – $500,000 , will have to submit quarterly returns
• $300,000.00 or less, will have to submit yearly returns.

With the online services, the filing obligation will be automatically created for the taxpayers. For more information on filing, refer to the link; https://www.frcs.org.fj/our-services/taxpayer-online-service-tpos/users-guide/.

Every registered person shall on or before the last day of the month following the last day of every taxable period, without notice or demand furnish to theChief Executive Officer a VAT return…”), Section 33 of the VAT Act.

Example:

Monthly VAT Returns

3 Monthly VAT Returns

Yearly VAT Returns

Obligation of a Registered Person

• File VAT returns
• Charge VAT
• Issue Tax Invoice on all assets
• Display price as VAT Inclusive
• Claim VAT on Tax Invoices for purchases and expenses used for the business
• Keeping of records in Fiji in English and for 7 years

*VAT is currently imposed at 3 different rates:

• 0% – applicable to zero rated goods
• 9% – applicable to normal taxable supplies (that are not zero rated, taxable @15% and exempted under Schedule 1 of the VAT Act i.e. exempt supplies)
• 15% – applicable to the list of goods and services provided

Adapting your Accounting System

Once you register, you should start preparing your accounting records to accommodate VAT. To support your VAT charges and input tax credit claims, you must keep tax invoices and other accounting records forat leastseven (7) years, and make them available toAudit/Compliance auditors, when requested.

VAT Payments

Taxpayers have the option on mode of payment and they must ensure that they provide or quote Reference Number while making payments:

Option 1: Payments can be easily paid to any of our Cashiers based atCustomer Service Centers, located Suva, Nausori, Lautoka, Labasa, Savusavu, Sigatoka, Nadi, Levuka, Ba and Rakiraki.

Option 2: For Direct Deposits, Electronic Payments, Online and Telegraphic Transfer Payments, click on the link for details and format while remitting payments: https://www.frcs.org.fj/wp-content/uploads/2022/01/FRCS-Online-payment-details.pdf

VAT Penalties

The following penalties apply under theTax Administration Act 2009

• Late payment penalties –25%of any tax remaining unpaid.
• An additional 5% for every month of default on the balance of the unpaid tax.
• Late lodgment penalties –20%of any tax remaining unpaid.
• An additional 5% for every month of default on the balance of the unpaid tax.
• VAT penalty of 300% on tax payable will apply in case of VAT evasion
• Any VAT registered person who does not comply with the new VAT rate to reflect in the prices of goods and services will be liable to a fine not exceeding $50,000 or upon conviction be liable to a fine not exceeding $100,000 or ten years’ imprisonment.
• A further enforcement action for not lodging returns on due date may include a court fine not exceeding $25,000 or to imprisonment for a term not exceeding 10 years’ or to both a fine and imprisonment.

Deregistration

Taxpayers can request for deregistration under certain circumstances – close or sell business, change in business structure, bankruptcy or other reasons. It is important that taxpayers inform FRCS on such activities and update their information.

The deregistration application can be submitted by a taxpayer through the TPOS portal. Refer to the user guide for more information, click here to access https://www.frcs.org.fj/wp-content/uploads/2021/08/FINAL-TPOS-FRCS-Taxpayer-Deregistration_User-Manual-External.pdf

Further information:

For more information,please emailinfo@frcs.org.fj, or visit any of our office nearest to you – Suva, Nausori, Rakiraki, Ba, Lautoka, Nadi, Sigatoka, Labasa, Savusavu, Levuka.