|
Here you will find a set of general FAQs.
Rates & Taxes
Business License
What are the requirements of obtaining a business license?
To obtain a business license applicant must first have the following documents:
Business license forms are available at Rates & Taxes office in Port Vila and Luganville in Santo
What are the license fees?
The license fees vary, depending on the size of the business’s annual turnover. The fees range from VT 20,000 to VT 1,000,000.
What are the business license categories?
The license categories are also included in the fee schedule which range from category A to L.
How long does it take to issue a business license?
During busy periods (January to March) it would take at least a week, however, during low peak periods it only takes 10 minutes provided all required documents submitted.
Do businesses with branches in different locations require separate business licenses?
Businesses with subsidiaries located in other areas or Jurisdiction (Provincial areas, other Municipal areas) definitely requires a separate business license as per the business license Act.
Vehicle Registration
How do I register a vehicle in Vanuatu?
- Obtain registration form from Rates & Taxes Office
- Attached vehicle clearance form by Customs to the registration form
- Submit form to Rates & Taxes for payment and registration
What are the vehicle registration and transfer of ownership fee?
7 % of the retail/purchase price
Who is responsible for the vehicle transfer fee? Is it the vendor or the purchaser?
Under the Road Traffic Control Act, the purchaser is responsible for the fee and shall be paid within 7 days from the date of purchase.
Rent Tax
Who is eligible to pay rent tax?
There are two eligible categories of tax payers: Individual and Companies/Trust.
- Individuals with rent income less than VT 200,000 within 6 months periods are exempt from paying rent tax.
- However individuals with rent incomes higher than this threshold amount are subject to pay the tax
- Businesses on the other hand do not have any threshold meaning all income from residential rents are subject to be taxed in full
What is the tax rate?
12.5%
When is the tax due?
Rent Tax is paid biannually on these two due dates:
28 June and 28 December every year
What are the penalties for late payment?
25% interest/annum
Liquor License
What are the processes in obtaining a liquor license?
- Obtain license from Rates & Taxes Office
- Application then forwarded respectively to these three authorities for approval, Port Vila/Luganville Municipal Council, Police and Ministry of Internal Affairs,
- Once approved by these authorities then within 30 days approved license fees must be paid at Rates & Taxes Office. Payment not made within 30 days will attract 10% penalty each month until such time the fee is settled
- These process normally takes a month or more to complete
What are the license fees?
Liquor license fees varies depending on the duration of opening hours; refer to fee schedule for respective fees
Do also note that under the liquor license Act no person shall carry on a liquor business unless a business license is obtained for the trade.
VAT
1. Who must register for VAT?
Persons and organizations who register with the department of Customs & Inland Revenue, VAT office, will collect VAT from their customers. If you have an annual turnover of VT4 million or more in you taxable activity, or you expect your turnover to be VT4 million or more in the next twelve months, must register for VAT.
If your taxable activity has an annual turnover of less than VT4 million you are not required to register but may do so if you wish.
If the business operates in branches, the taxable supplies of all the branches must be added together to get the total turnover. However, non-profit bodies, clubs charities, and Associations can look at each hand separately.
2. What should I do to deregister for VAT?
An application to register form for VAT could be obtain from the VAT office and a copy of the following documents must be attached to the application:
a) Business license – not applicable to farming
b) VIPA approval certificate – foreign investors
c) Certificate of business name
Only when necessary that the VAT office may request for business/development plan and or financial forecasts prior to registration.
3. Is there a registration fee?
There are no registration fees or deposits provided that the registered person is obliged under the VAT Act to collect the tax on behave of the government and return to the VAT office.
An application to register for VAT form (CT201) must be completed and submit to the VAT office with all required documents.
4. What are my VAT obligations?
Once you are registered for VAT, you must:
- Keep full record so the VAT office can easily check your VAT liability.
- Charge VAT on all taxable supplies made in your business.
- Account for VAT on all taxable supplies made in your business.
- Complete VAT returns and pay any tax owing by the due date.
- Give tax invoices to other registered persons.
- Tell the VAT office about any changes (e.g., address, cessation of registration etc.)
5. What are my VAT liabilities?
You must keep sufficient records so the VAT office can readily assess your liability. You must hold these records in Vanuatu in English, French or Bislama for six (6) years.
For VAT purposes, your records may include:
- Books of account (on paper or in computers)
- Till tapes
- Receipts
- Tax invoices
- Credit and debit notes
- Bank statements
- Invoices
- Motor vehicle logbooks
- Stock on hand records
- Vouchers
- Accounting instructions manuals
- System and program documentation which describes the accounting system.
- If you do not keep proper records, you are committing an offence.
6. What accounting basis could I use?
There will be two ways you can account for VAT – the invoice (accrual) basis or payment (cash) basis. The following generally explain how each of them works.
Invoice basis – Using the invoice basis you generally account for VAT in the earliest taxable period in which you:
- Issue or receive an invoice, or
- Receive or make payment
Payment basis – The payment basis means you generally account for VAT when payments are made or received. This is why it is sometimes called the cash basis.
The payment basis is different to the invoice basis in that you do not account for debtors and creditors at the end of each accounting period. In most cases you must hold a tax invoice if you wish to claim a VAT tax credit.
7. What are the late payment charges/penalties?
If the tax is not paid by the due date, additional tax will be charged, as follows:
- 10% on the amount not paid by the due date,
- 2 % on the total outstanding one month after the due date,
- 2% of the total outstanding at the end of each month from then on.
8. How long before a refund is issued?
The VAT office will refund you when the VAT you have paid is greater that the VAT you have collected. The VAT office would usually send out refunds within 15 working days of receiving a return.
Sometimes the VAT office is allowed under the legislation to withhold payment of a refund to you. Here are some of the situations where this may happen:
- A refund or part of a refund may be used to pay any other taxes you owe, for example, overdue business license fees.
- If you have not filed a VAT return for any taxable period, the VAT office may hold your refund until you send the overdue retu7rns.
- If the refund is allocated for a refund check by the VAT office.
9. What expenses could be claimed?
Expenses not as income, only some could be claimed for a VAT tax credit. Expenses made by a registered person for business purposes to another VAT registered persons for a supply of goods or services could be claimed. You must hold a tax invoice if you wish to claim a VAT tax credit.
VAT is a tax on the consumption of goods and services in Vanuatu thus expenses paid outside of the country cannot be claimed.
10. What expenses cannot be claimed?
Expenses or purchases that cannot be claimed are:
1) Expenses paid to a non registered person
2) Expense paid for goods or services provided outside Vanuatu
3) Expense paid for financial services
4) Salary/wages
5) Dividends
6) Staff privileges – personnel use
11) What are the advantages & disadvantages of VAT?
Advantages
- A tax credit could be claimed for VAT incurred in business related expenses from the government.
- As a registered person you do not bear the cost of VAT but rather passing on the cost to end consumers.
Disadvantages
- Not all expenses could be claimed for a tax credit.
- Account for VAT on sale of business assets or during cessation despite whether the assets were purchase before the implementation of VAT.
- Keep good records up to 6 years or even after your registration is cancelled.
|
