What is Value Added Tax (VAT)?

Value Added Tax (VAT) is a tax on spending that is levied on the supply of goods and services in Fiji. It is charged at rates of 0% and 12.5%.  Effective from 01/08/2025, 12.5% VAT rate is charged on goods and services except for those items that fall under exempted and zero-rated VAT. 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.

Characteristics of VAT

Tax on Spending

• This is a tax on spending, borne and paid by the final consumer on goods and services.

• 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 of 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

Supplies subject to VAT are listed under Section 3 of the VAT Act 1991 [Taxable Supplies]. Section 3 implies the use of word “supply” in a very wide sense. For more information please refer to the VAT Guide – create link
In relation to goods, a supply is made by way of sale, exchange, lease, hire, hire purchase, lay-by etc.  

• “Deemed Supplies”– treated as supplies for Vat purposes
• Exempt Supplies – VAT Act (Schedule 1)
• Zero Rated Supplies – VAT Act (Second Schedule)

How to Register for VAT?

Taxpayers can register for VAT either when they are applying for a TIN or for existing Taxpayers, they can apply via the TPOS portal after signing up.
Click here to access TPOS Portal. 


Refer to the user guides and Tutorial videos for more information: Click here.

VAT Registered Taxpayers

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.

• $300,000.00 or less, will have to submit quarterly returns.

With the online services, the filing obligation will be automatically created for the taxpayers. For more information on filing, refer to the link; Taxpayer-Online-Service. 
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 the Chief Executive Officer a VAT return…”), Section 33 of the VAT Act.

Example:

Monthly VAT Returns

3 Monthly 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 Rates

*VAT was 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 for at least seven (7) years, and make them available to Audit/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 at Customer 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 here for details and format while remitting payments.

Tax Labels

01 August 2023
Following Tax Labels are used to identify appropriate tax rate for each product or service sold through POS

01 April 2022
Following Tax Labels are used to identify appropriate tax rate for each product or service sold through POS

VAT Penalties

The following penalties apply under the Tax 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 lodgement 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 200% 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 Taxpayer Deregistration User Manual.

Further Information

For more information, please contact our Customer Service Centre on email info@frcs.org.fj, or visit any of our nearest FRCS offices.

Last Updated - 2 weeks ago