Change for stamp duty

THE Minister for Finance announced a waiver of stamp duty for small & micro enterprises on all instruments or written documents effective January 1, 2016. Small & micro enterprises under Stamp Duties Act includes any business with anannual gross turnover or sales not exceeding $500,000 per annum. This week, the Fiji Revenue and Customs Authority (FRCA) acting CEO Visvanath Das speaks to business reporter ROPATE VALEMEI on changes in Stamp Duty for this year.

TIMES: Does this mean that SMEs will not have to pay any stamp duty on mortgage, financial lease, tenancy agreement and any other instrument.

DAS: Yes, so long as those instruments relate to their business, including the purchase or transfer of a vehicle, any agreement and export entries for business purpose.

TIMES: How does an SME qualify for the exemption?

DAS: To qualify for this exemption, the applicant (SMEs) will have to be a registered business that must have a business licence, is tax and Customs compliant and will be required to provide a statutory declaration confirming that they have a gross turnover not exceeding $500,000.

Copies of financial statements must be attached where applicable. The policy intention for this incentive is to assist the SMEs. Post assessment audits will be conducted to verify declarations. Severe penalties will be imposed where taxpayers make false declarations or scheme to evade this tax.

TIMES: What will be the stamp duty rates on new registration of vehicles at LTA from January 1, 2016?

DAS: Stamp duty will be payable on new registration of vehicles at LTA from January 1, 2016.

The stamp duty will depend on the engine capacity of the motor vehicle and will be payable by the new owner of the vehicle. The rates are as follows: 0-999cc: $25; 1000-1599cc: $50; 1600-1999cc: $100; 2000-2599cc: $200; 2600-2999cc: $300; 3000-3599cc: $400; and 3600cc or more: $500.

TIMES: Will stamp duty also apply on transfer of motor vehicles?

DAS: Yes stamp duty will also apply on transfer of motor vehicles. The transfer of ownership of vehicle will attract 3 per cent stamp duty. This will be covered under the transfer instrument.

TIMES: What other new instruments was announced in 2016 budget?

DAS: Some other new instruments announced by the Minister for Finance in 2016 budget are as follows:

* deed of assignment of trademarks;

* stamp duty applicable at the rate of 3 per cent will be imposed on the value of the trademark that is being transferred by way of deed of assignment. The person primarily liable to pay the stamp duty will be the person executing the deed;

* finance leases or loan agreement; and

* stamp duty will be applicable at the rate of 1.75 per cent on finance lease or loan agreements, including related party loans but excluding all personal loans not exceeding $10,000. The person primarily liable to pay the stamp duty will be the lessee or borrower.

TIMES: Can you please clarify what are the conditions for the first home buyers being exempt from paying stamp duty?

DAS: First home buyers must satisfy the following conditions to be exempted from paying stamp duty:

* the buyer must be a Fiji citizen;

* the property being purchased must be the first property in Fiji or elsewhere; and

* the house can have one or more than 1 flat

TIMES: What if I sell my home within five years of purchase; will I have to pay back the stamp duty waived?

DAS: Effective January 1, 2016, there will be no stamp duty payable if the house is being sold within five years from purchase.

Every Fijian citizen will be allowed one exemption per lifetime upon purchase of a home.

TIMES: What is a crop-lien agreement and will it be subject to stamp duty?

DAS: Crop-lien is where farmers borrow money from lenders to purchase their goods such as tools for growing their crop and enter into agreement in exchange for a lien on the farmer’s forthcoming harvest.

Stamp duty will be exempted on such crop lien agreements.

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