SERVICE TURNOVER TAX For Hoteliers and Tourist Marine Vessel Operators

SERVICE TURNOVER
TAX
For Hoteliers and Tourist
Marine Vessel Operators
SERVICE TURNOVER TAX
SERVICE PROVIDER
OBLIGATIONS
STT CALCULATION
REGISTRATION
FIJI REVENUE & CUSTOMS
AUTHORITY

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
Who are the parties liable to account for
STT?
1
Deemed STT Registration 2
Accommodation Services not subject to
STT
2
Who is responsible to collecting STT? 2
Accounting for STT 2
STT Penalties 3
Offences under the STT Act 3
Part C - STT Calculation
Guidelines for calculating STT 3
Part D - Registration
How and when to register? 5

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, 2012. 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 a
prescribed service should register with the Commissioner
within 30 days before the commencement of the business.
Only persons that provide the prescribed services are required
to register for STT purposes and are authorized to include STT
in their charges.
Who are the parties liable to account for STT?
The new STT will apply to the prescribed services that are
provided by the following parties and business operations:
• a licensed hotel;
• operators of a vessel that is wholly or principally engaged in
the carriage of tourists within Fiji.
• rental car operators;
• inbound tour operators;
• events management operators;
• recreation, entertainment and cinema operators;
• bars and night clubs;
• bistros, coffee shops & restaurants with annual gross
turnover of $1.5 million and above;
• All water sports, underwater activities, skydiving, hot
air balloon rides, river safaris, aircraft charter or hire,
including helicopters with annual gross turnover in excess
of $300,000;
• Home stay operators; and
• Unlicensed operators providing services similar to that
provided by the abovementioned operations.
1

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.
• The person who is registered under the Service Turnover
Tax Decree 2012 shall be deemed to be the “accountable”
person.
• 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.
Accommodation Services subject to STT
Licensed hotels and vessels engaged in the carriage of tourists
within Fiji and which provide overnight accommodation for
passengers should charge STT. The definition of a hotel is
given in the Hotels & Guest Houses Act. Hotels are licensed
businesses that receive guests or travelers for a fee and include:
• a boarding house, lodging house, guesthouse or caravan.
• any part of a building, vessel, premises, structure, caravan or
house on wheels.
• any place used by a hotel for overnight accommodation
such as tents, camp sites.
Accommodation Services not subject to STT
It does not include accommodation in public institutions and
those owned by registered charitable trusts/religious bodies and
other similar educational/vocational institutions.
Who is responsible for collecting STT?
Any person who is responsible for the daily management of
a prescribed service 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.
2

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 hotel.
• failure to allow authorized tax officials from entering the
hotel premises to inspect turnover, collection or payment
records
• failure to produce any books or records relating to the
turnover and collection/payment of hotel turnover tax.
The Commissioner can also make an offer to compound an
offence.
Part C - STT Calculation
Guidelines for calculating STT
The two tables below show how the gross amount paid by a hotel
guest should be calculated if a hotel owner is registered for STT
and VAT purposes.
3

Table 1 [Manual Records]
# Transaction Type Charges
(VEP)
STT 5%
VAT
15%
TOTAL
1 Accommodation $ 87.50 $ 4.38 $ 13.13 $ 105.00
2 Refreshments $ 50.00 $ 2.50 $ 7.50 $ 60.00
TOTAL $ 137.50 $ 6.88 $ 20.63 $ 165.00
Table 2 [System-Based Records]
#
1
2
Transaction
Type
Accommodation
Refreshments
Charges
(VIP)
VAT
1 5%
Charges
(VEP)
STT 5%
TOTAL
$ 98.44 $ 12.84 $ 85.60 $ 4.28 $ 102.72
$ 56.25 $ 7.34 $ 48.91 $ 2.45 $ 58.70
TOTAL $ 154.69 $ 20.18 $ 134.51 $ 6.73 $ 161.42
The table below shows how the gross amount paid by a hotel
guest is calculated where the hotel owner is not registered for
VAT.
Table 3
# Transaction Type
Include in your monthly STT Return
Include in your monthly STT Return
Charges
(VEP)
STT 5%
TOTAL
1 Accommodation $ 87.50 $ 4.38 $ 91.88
2 Refreshments $ 50.00 $ 2.50 $ 52.50
TOTAL $ 137.50 $ 6.88 $ 144.38
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

Part D - Registration
How and when to register?
Owners of prescribed services are deemed to be registered for
STT, with effect from 1st January 2012.All except for those
already registered for Hotel Turnover Tax purposes 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

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) 3243000 Fax: (679) 3302 321
e-mail: info@frca.org.fj or tepu@frca.org.fj
Images © Adrian Seah
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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) 324 3000
Fax: (679) 331 5537
Email: tepu@frca.org.fj
Website: www.frca.org.fj
Customs Service
Suva
Revenue & Customs Services Complex
Private Mail Bag, Suva,
Fiji Islands
Phone: (679) 324 3000
Toll Free Line: (679) 331 7070
Lautoka
General Office: Tavewa Avenue, Lautoka
Phone: (679) 666 0966
Fax: (679) 666 5961
Nadi Airport
Phone: (679) 672 2122
Fax: (679) 672 5390
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: 0800 331 7834
Phone: (679) 331 2800
Fax: (679) 330 4936
or: (679) 330 2130
Risk & Compliance
Suva
All Compliance, Debt Management &
Lodgement Enquiries: Phone: (679)
324 3000
Fax: (679) 330 2993
Lautoka
Tavewa Avenue
Phone: (679)666 0966
Fax: (679) 666 7734
Labasa
Phone: (679) 881 1399
Fax: (679) 881 2354
Levuka
Phone: (679) 344 0008
Fax: (679) 344 0425
Savusavu
Phone: (679) 885 0727
Fax: (679) 885 0728
Nausori
Air Services Office
Phone: (679) 347 8299
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