Fiji Court Clarifies VAT On Freight Forwarding Services

by Mary Swire, Tax-News.com, Hong Kong

23 January 2015

Fiji's Tax Tribunal has ruled that freight forwarding companies may only charge VAT at the zero rate on the portion of the consideration attributable to the cost of providing international freight services.

The ruling was released in relation to a freight forwarding company that was found to be charging the zero rate on the full cost of their international freight services, including the mark-up (commission).

According to the CEO of the Fiji Revenue and Customs Authority, Jitoko Tikolevu, "the taxpayer was informed that they can only claim zero rate for the actual cost of international freight services and that the zero rate claim cannot extend to the mark up on the service. Assessment was raised whereby FRCA had allowed zero rate claims for actual cost of international freight services but 15 percent VAT was charged on the mark up."

"Shipping agents and freight forwarders are advised that based on this decision, zero rated claims will only be allowed on the actual cost of international freight. Any ancillary services other than the actual cost of international freight will be subject to VAT," he said.

TAGS: compliance | tax | value added tax (VAT) | VAT legislation | VAT cross-border transactions | Fiji | legislation | services | VAT refunds | VAT compliance matters | Tax

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