SERVICE TURNOVER TAX. For Licensed Restaurants, Bistros or Coffee Shops

Transcription

1 SERVICE TURNOVER TAX For Licensed Restaurants, Bistros or Coffee Shops SERVICE TURNOVER TAX SERVICE PROVIDER OBLIGATIONS STT CALCULATION REGISTRATION FIJI REVENUE & CUSTOMS AUTHORITY

2 CONTENTS Page Part A - Service Turnover Tax What is Service Turnover Tax (STT)? 1 Part B - Service Provider Obligations Who should register for STT? 1 What is the registration threshold 1 Deemed STT Registration 1 Who is responsible to collecting STT? 2 Accounting for STT 2 STT Penalties 2 Offences under the STT Act 2 Part C - STT Calculation Guidelines for calculating STT 3 Part D - Registration How and when to register? 5

3 Part A - Service Turnover Tax What it is? Service Turnover Tax (STT) is a tax that is levied on the VAT exclusive cost of turnover of any person conducting a business involving the provision of a prescribed service, at the rate of 5%, with effect from 1st January, Turnover means any sums or amounts received or receivable by or on behalf of the owner of a service in respect of any sums or amounts included in a charge for a prescribed service. The service provider has to collect the STT shown on the bill issued to a customer. Part B - Service Provider Obligations Who should register for STT? As from 1st January 2012, the owner or the person (Accountable Person) who is responsible for the daily management of any of the prescribed services highlighted below should register with the Commissioner within 30 days before the commencement of the business, provided their annual gross turnover exceeds the registration threshold mentioned below: Bistros or Coffee Shops; Licensed Restaurants. The same shall apply to business operators currently involved in the provision of the above highlighted prescribed services. Only persons that provide the prescribed services are required to register for STT purposes and are authorized to include STT in their charges. What is the registration threshold? As from 1st January 2012, the providers of the prescribed services highlighted above are required to be registered for STT purposes, if their annual gross turnover is in excess of FJ$1.5m. Deemed STT registration This shall apply to any of the following: The person who is responsible for the daily management of a prescribed service is deemed to be the accountable person as from 1st January 2012; and The precedent partner in the case of a partnership and the manager in the case of a body of persons shall be deemed to be the accountable person. 1

4 Who is responsible for collecting STT? Any person who is responsible for the daily management of a prescribed service highlighted above and who has levied the STT on service charges must account for it. This person is referred to, as the accountable person and any correspondence or queries on STT will be sent to him. Accounting for STT The Accountable person must account for STT in monthly returns. A STT return should be completed and submitted with a cheque/cash for the STT applicable on the turnover for that month within 30 days. The forms are available on our website and Customer Service Centers. The Accountable Person may issue bills that are STT inclusive or STT/VAT inclusive or separately depending on the record keeping system adopted. However, adequate records must be kept for audit purposes. STT Penalties Any STT remaining unpaid after the due date for payment 25% Late Payment Penalty applies. If lodgment is late, 20% Late Lodgment Penalty will apply on the outstanding amount on the return. Offences Action will be taken to recover the unpaid STT and penalties from third parties (such as banks) or through the courts. The courts can impose a minimum fine of FJ$15,000 or to imprisonment for a term not exceeding 12 months or to both a fine and imprisonment on any of the following offences: failure to keep adequate records and accounts relating to the turnover of the service provider. failure to allow authorized tax officials from entering the service provider s premises to inspect turnover, collection or payment records failure to produce any books or records relating to the turnover and collection/payment of service turnover tax. The Commissioner can also make an offer to compound an offence. 2

5 Part C - STT Calculation Guidelines for calculating STT For illustration purposes, the two tables below show how the gross amount paid by a guest at a restaurant should be calculated if the service provider is registered for STT and VAT purposes. Table 1 [Manual Records] # Transaction Type Charges (VEP) 1 Sweet & Sour Chicken STT 5% VAT 15% TOTAL $ 7.00 $ 0.35 $ 1.05 $ Refreshment $ 2.30 $ 0.12 $ 0.35 $ 2.77 TOTAL $ 9.30 $ 0.47 $ 1.40 $ Table 2 [System-Based Records] # 1 2 Transaction Type Sweet & Sour Chicken Refreshment Charges (VIP) VAT 1 5% Charges (VEP) STT 5% TOTAL $ 8.05 $ 1.05 $ 7.00 $ 0.35 $ 8.40 $ 2.65 $ 0.35 $ 2.30 $ 0.12 $ 2.77 TOTAL $ $ 1.40 $ 9.30 $ 0.47 $ The table below shows how the gross amount paid by a guest at a restaurant should be calculated if the service provider is not registered for VAT. Table 3 # Transaction Type Include in your monthly STT Return Charges (VEP) Include in your monthly STT Return STT 5% TOTAL 1 Accommodation $ 7.00 $ 0.35 $ Refreshments $ 2.30 $ 0.12 $ 2.42 TOTAL $ 9.30 $ 0.47 $ 9.77 Include in your monthly STT Return 3

6 For illustration purposes, the two tables below show how the gross amount paid by a guest at a Coffee Shop should be calculated if the service provider is registered for STT and VAT purposes. Table 1 [Manual Records] # Transaction Type Charges (VEP) STT 5% VAT 15% TOTAL 1 Coffee $ 2.80 $ 0.14 $ 0.42 $ Hot Chocolate $ 2.10 $ 0.11 $ 0.32 $ 2.53 TOTAL $ 4.90 $ 0.25 $ 0.74 $ 5.89 Table 2 [System-Based Records] # Transaction Type Charges (VIP) VAT 1 5% Charges (VEP) STT 5% TOTAL 1 Coffee $ 3.22 $ 0.42 $ 2.80 $ 0.14 $ Hot Chocolate $ 2.42 $ 0.32 $ 2.10 $ 0.11 $ 2.53 TOTAL $ 5.64 $ 0.74 $ 4.90 $ 0.25 $ 5.89 The table below shows how the gross amount paid by a guest at a Coffee Shop should be calculated if the service provider is not registered for VAT. Table 3 # Transaction Type Include in your monthly STT Return Charges (VEP) Include in your monthly STT Return STT 5% TOTAL 1 Coffee $ 2.80 $ 0.14 $ Hot Chocolate $ 2.10 $ 0.11 $ 2.21 TOTAL $ 4.90 $ 0.25 $ 5.15 Include in your monthly STT Return NOTE: STT is always calculated on the VAT exclusive amount. VAT is calculated in the same way but the base figure shall not include the STT amount. 4

7 Part D - Registration How and when to register? Owners of prescribed services are deemed to be registered for STT, with effect from 1st January All will be required to complete and submit the STT registration form to Inland Revenue Services. In the application form the name of the person who will be responsible for the collection and the payment of the tax must be provided. For new businesses, the Accountable Person should first obtain a Tax Identification Number, then register for STT purposes. Registration must be done within 30 days before the business commences. The registration form is available on our website and Customer Enquiry Centers. An applicant must complete all the sections in one of the following relevant forms and submit it together with the documents required for TIN registration: Application of Registration of Sole Trader Businesses form (IRS001). You must submit one of the following plus your business licence when registering: o driver s licence & Wheel Tax Certificate. o FNPF card. o passport. o official ID card. Application of Registration of Companies, Partnerships or Trusts (IRS003). You must submit the following: o for a partnership (whether or not a written partnership deed exists), a copy of its Partnership Deed/Agreement. o for a trust (including a unit trust), a copy of its Deed of Trust. o for an estate of a deceased person, a copy of probate statement from the executor. o for a charitable organization or non-profit body, a copy of its Certificate of Incorporation and Memo/Articles of Association/Registration Certificate. o for a company whether public or private a copy of its Certificate of Incorporation and Memo/Articles of Association. 5

8 A business license needs to be submitted in addition to the above requirements in the case only of a trading business. A site inspection may be carried out by FRCA before a Tax Identification Number (TIN) is issued. The completed registration form can be either posted or hand delivered to the FRCA office nearest to you. REMEMBER THAT FAILURE TO REGISTER IS A CRIMINAL OFFENCE AND RENDERS SEVERE PENALTIES Disclaimer The information in this document are subject to change without notice. For more infformation, please contact the Taxpayer Education and Publicity Unit on Phone: (679) Fax: (679) [email protected] or [email protected] Images hotels.com; jasons.com 6

9 FIJI REVENUE & CUSTOMS AUTHORITY Head Office Fiji Revenue & Customs Authority Revenue & Customs Services Complex Cnr of Ratu Sukuna Rd & Queen Elizabeth Drive Private Mail Bag, Suva, Fiji Islands Phone: (679) Fax: (679) Website: Customs Service Suva Revenue & Customs Services Complex Private Mail Bag, Suva, Fiji Islands Phone: (679) Toll Free Line: (679) Lautoka General Office: Tavewa Avenue, Lautoka Phone: (679) Fax: (679) Nadi Airport Phone: (679) Fax: (679) Taxation Division (Inland Revenue Service) Suva Revenue & Customs Services Complex Private Mail Bag, Suva, Fiji Islands All Income Tax and VAT Enquiries Toll Free Line: Phone: (679) Fax: (679) or: (679) Risk & Compliance Suva All Compliance, Debt Management & Lodgement Enquiries: Phone: (679) Fax: (679) Lautoka Tavewa Avenue Phone: (679) Fax: (679) Labasa Phone: (679) Fax: (679) Levuka Phone: (679) Fax: (679) Savusavu Phone: (679) Fax: (679) Nausori Air Services Office Phone: (679)

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