The Tax Administration Act (TAA) was promulgated with the stated intention of harmonising the administration of the various tax laws, including CIT and VAT. CGT, FBT, STT, and ECAL are also covered by the provisions of the TAA.
If a due date falls on a Saturday, Sunday, or holiday, the due date is the last working day before the due date except when the documents are lodged electronically.
Tax is assessed on income derived during the calendar year preceding the year of assessment. Returns are therefore generally accepted on a calendar-year basis, although approval is also given to use an alternative fiscal-year basis. For purposes of assessment of returns completed on a fiscal-year basis, the calendar year in which more than one-half of the fiscal year falls is deemed to be the calendar year in which the income is derived.
The Fiji tax system is based on self-assessment.
The due date for lodgement of CIT returns is three months after the end of the income year, unless an extension of time has been granted.
Payment of tax
Final payment of CIT (i.e. the balance of actual tax payable) is generally due by the tax return lodgement or the lodgement due date (whichever is earlier).
Effective from 1 April 2020, the advance tax payments for companies for the 2020 and subsequent income years are required to be made in nine equal instalments due by the last day of the sixth, seventh, eighth, ninth, tenth, eleventh, and twelfth months of the tax year and the first and second months of the following tax year. Each installment should be 1/9 of the assessed income tax liability for the preceding tax year or the amount of income tax estimated by the person to be payable for the tax year (other than income tax to be collected by withholding).
The TAA provides for various ways to ensure the collection of taxes, including, but not limited to, the following:
- Departure prohibition order: A departure prohibition order may be used by the tax office to prevent taxpayers from leaving the country without settling outstanding taxes.
- Garnishee orders: The tax office may garnish bank accounts for outstanding taxes.
- Registration of charges on personal and real properties of the taxpayer.
- Distress and sale of personal property.
- Temporary closure of business.
Some of the administrative penalties under the TAA are as follows:
- Failure to register: Every person who fails to apply for registration as required pursuant to the Act commits an offence against the Act and will, on conviction, be liable to a fine not exceeding 50% of the tax payable where the delay does not exceed six months, or a fine not exceeding the tax payable where the delay exceeds six months.
- Late filing of a return or any document required by a tax law: A registered person who fails to lodge a tax return (or any document required by a tax law) is liable for a penalty of 20% of the tax payable in the case where tax is payable and a penalty of 5% of the tax payable for every month of default. In any other case, a penalty of FJD 1 per day applies. Effective from 1 April 2020, any penalty payable in respect of any failure by a taxpayer to file a tax return by the due date is deemed to have been waived if the due date falls on a date within the amnesty period (i.e. the period commencing on and from 31 March 2020 to 31 December 2020).
- Late payment of tax payable: Where any tax remains unpaid on the expiry of the due date, a penalty of 25% of the unpaid tax in respect of that taxable period will apply. Failure to comply with the late payment penalty: Every person who fails to comply with the late payment penalty is liable for penalty of 5% of the unpaid tax for each month of default. Penalty for failure to pay tax by the due date is deemed to have been waived if the taxpayer makes payment arrangements within 3 months from 1 August 2021 and makes the payment before 30 June 2022.
- Failure to maintain proper records: A registered person who fails to keep, retain, or maintain account, documents, or records is liable for a penalty of 75% (knowingly or recklessly made) or 20% (in other cases).
- Insufficient payment of advance taxes: A taxpayer who makes advance payment of taxes less than the required amount per instalment is liable for a penalty of 40% of the shortfall. This penalty provision has been suspended for three years commencing on 1 August 2020.
- Effective 1 August 2021, a fine of $500 will be imposed on a taxpayer who presents or submits a dishonoured cheque.
Taxpayers adopting a position contrary to a public ruling or a private ruling will not be regarded as a reasonably arguable position (unless the ruling is held to be incorrect).
A taxpayer who, without reasonable excuse, makes any declaration in any tax return that is false or misleading in any material particular or omits from any tax return or declaration any matter or thing required to be made in the tax return commits an offence and is liable to a fine not exceeding FJD 250,000.
A tax agent is liable to a fine not exceeding FJD 50,000 and/or to imprisonment for a term not exceeding ten years if the tax agent:
- prepares, presents, or causes to be prepared or presented as genuine any document that is not in fact a genuine document or is false or misleading in any material particular
- makes any entry in any document required to be produced under any tax law that is false and misleading in any material particular
- makes in any oral declaration to a tax officer or in any document produced to a tax officer any statement that is false or misleading in any material particular or produces or delivers to a tax officer any declaration or document containing any such statement, or
- omits from a statement made to a tax officer any matter or thing without which the statement is false or misleading in a material particular.
Every Fijian citizen or resident, whether liable for tax or not, should apply for a Taxpayer Identification Number (TIN).
Every taxpayer who conducts a business must notify the tax authority in writing of any changes in information within 21 days of change.
A taxpayer who, without reasonable excuse, fails to apply for a TIN or to notify the tax authority of changes commits an offence and would be liable for a fine not exceeding FJD 25,000 and/or imprisonment of up to ten years.
It is an offence (with penalties of up to FJD 25,000 in fines and/or up to ten years imprisonment) for a taxpayer to charge incorrect tax or fail to charge tax as required by law.
The tax authority can issue an infringement notice where it has reason to believe that a person has committed a prescribed offence.
Tax audit process
The FRCS undertakes ongoing compliance activities to ensure corporations are meeting their tax obligations. Compliance activities take various forms, including questionnaires, reviews of specific issues, and audits.
Statute of limitations
The tax authority may amend a tax assessment (original assessment) as follows:
- in case of fraud, wilful neglect, or serious omission by or on behalf of the taxpayer - at any time.
- in case of a company with a gross turnover of less than $1.25 million - within 3 years of the date the taxpayer filed the self assessment return or within 3 years of the date the tax authority serves notice of the tax assessment on the taxpayer.
- in any other case - within 6 years of the date the taxpayer filed the self assessment return or within 6 years of the date the tax authority serves notice of the tax assessment on the taxpayer.
The tax authority may amend an amended tax assessment as follows:
- in case of fraud, wilful neglect, or serious omission by or on behalf of the taxpayer - as the tax authority deems fit.
- in case of a company with a gross turnover of less than $1.25 million - within 3 years of serving the notice of the original or amended assessment.
- in any other case - within 6 years of serving the notice of the original or amended assessment on the taxpayer.
The definition for "serious omission" is very broad.
Topics of focus for tax authorities
The FRCS has recently been focusing on transfer pricing issues, FBT, WHT, and excise and fiscal duties.