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Fiji Revenue And Customs Authority: Tax And You

Fiji Revenue And Customs Authority: Tax And You
October 03
09:44 2015

The 2015 Tax Amnesty was introduced by the Fiji Revenue and Customs Authority to assist taxpayers by full waiver of administrative penalties those whose accounts are in arrears as at December 31, 2014.

It was also to allow time for Fijians paying taxes in Fiji to voluntarily declare their offshore assets and foreign investments.

Tax Amnesty Programme which was supposed to have ended in June has been extended due to requests from stakeholders.

The Tax Amnesty Programme is now extended to October 15.

Fiji Revenue and Customs Authority chief executive, Jitoko Tikolevu, said this would provide a reasonable time for taxpayers to comply and take advantage of the 2015 Tax Amnesty Programme.

We interviewed Mr Tikolevu on this further to get more details on tax amnesty.

UNDERSTANDING THE 2015 TAX AMNESTY PROGRAMME

What is your authority for waiving the penalty?
Sections 48 and 48A of the Tax Administration Decree give the authority for the waiver of penalty as well as assessed tax.
A person liable to pay a penalty may apply in writing to the CEO for remission of the penalty payable and such application must include the reasons for the remission.
The CEO may, upon application or on the CEO’s own motion, remit, in whole or in part, any penalty payable by a person.

There is some fear that whilst you’ll get them to declare their assets, you will assess and charge them tax retrospective?
Section 48A of the Tax Administration Decree lays down the law clearly that there will be no retrospective tax assessments on source or taxable income streams following declaration of foreign assets within the amnesty period.
According to the Tax Administration Decree the Chief Executive shall, as the case requires, remit in whole any tax payable by the qualifying person in respect of the foreign asset, including any interest accrued from, or any penalty or fine payable, in respect of such tax for any tax period provided that the tax period is prior to January 1, 2016.
If an applicant is not granted amnesty, the Chief Executive shall, as soon as practicable, provide written reasons to the applicant for the refusal.

What are conditions for waiving penalty for arrears?
Full waiver of penalties will be granted to taxpayers facing financial difficulties in payment of their tax obligations as at December 31, 2014.
This amnesty will cover all penalties imposed on tax liabilities.  The taxpayer must accept the tax liability and reasonably prove inability to make a lump sum payment of the liability.
Reasonable documentary evidence to prove “inability to pay lump sum” may include cash flow statements, debt/equity ratios, and statement of other liabilities, evidence of major default of payment obligations other than with Tax Office, and the like.

What penalties are covered under this tax amnesty?
The penalties that may be remitted are: Late lodgment penalty; Late payment penalty; Failing to maintain proper record; Breach for possession agreement; and Insufficient Advance Payment Penalty (IAPP).
The waiver of penalties incentives for taxpayers, who come forward, are that generally, penalties other than those imposed under section 46 of the Tax Administration Decree (TAD) will be waived.

What type of penalty cannot be waived under Section 46 of the Tax Administration Decree?
Section 46 of the Tax Administration Decree states that any person who  makes  a  statement  to  a  tax  officer  that  is  false or misleading in a material particular 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; and the tax liability of the person or of another person computed on the basis of the statement is less than it would have been if the statement had not been false or misleading (the difference being referred to as the “tax shortfall”).
The penalties associated with this section will not be waived.

 

What will amnesty do for the declaration offshore assets?
This means that all Fijians (Fiji citizens paying taxes in Fiji) who have assets outside of Fiji and have not declared these assets in Fiji, are given until October 15 to declare all their foreign assets.
Declaration of offshore assets includes all the classes of assets owned directly – jointly and/or severally, in partnership or indirectly via corporate/company or trust structures  and includes Bank Deposits, Shares in a company or property, Real Estate, Advances and Loans to related or unrelated parties and Term life Insurance.

How does the Amnesty for the declaration of offshore assets assist those that have foreign assets and declare them now?
The Amnesty for the Declaration of Offshore Assets grants full waiver of any penalties, any fines, and any taxable charge on all the assets owned by Fijian residents outside of Fiji.
The Amnesty also grants full waiver of any penalties, any fines, and any taxable charge on all the source funds for these assets as well all taxable incomes derived from these offshore assets as at December 31 i.e. no retrospective tax assessments on source or taxable income streams.
Reserve Bank of Fiji will also grant Exchange Control Amnesty for disclosures made with Fiji Revenue and Customs Authority.

What if taxes have been paid for those foreign assets in that foreign country?
If taxes have been paid you will need to show documentary proof attached to your Return of Income. Where the incomes have not been taxed, such income streams are only taxable going forward after declaration that is from 2016.

What other advice that you would like to share about the 2015 Tax Amnesty?
Taxpayers are urged to take advantage of the Amnesty Program to avoid penalties.
Taxpayers wishing to mail any tax amnesty application for penalty waiver or declaration of offshore assets should be addressed to the Tax Amnesty Admin Committee (TAAC), FRCA, Private Mail Bag, Suva. For further information you can call our toll free line on 0800 3304925 or can email your queries to taxamnesty@frca.org.fj

 

What is required when declaring offshore assets?

All offshore asset declarations must be made in full detailing:

  • Asset description e.g. bank accounts, bank, account type, account number etc
  • Advance/Loan to and Shares in
  • Asset address or locations e.g. property title number, property physical address, company address, country
  • Asset valuation at historical costs, value of taxable income, and ownership details e.g. direct owner, jointly/severally owned, beneficiary, major control

Feedback: rachnal@fijisun.com.fj

 

 

 

 

 

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