Company under investigation for charging 75% commission
January 30, 2019 7:29 am
A company is currently being investigated by the Fiji Revenue and Customs Service for transfer pricing.
In an exclusive interview with FBC News, Chief Executive Visvanath Das says the company is alleged to be charging 75% commission for its off-shore sales.
Das says transfer pricing is simply a method used to dodge tax by setting off-shore businesses, like this particular company.
He says this company’s unscrupulous business practices is a major concern.
“In one case, that is still under investigation and we can reveal more details on this later. There is one company that is charging a commission rate of 75%. How reasonable is that? That’s just common sense. It is logical that you cannot have a 75% commission. That immediately is a red flag – it is a risk.”
Das adds a high commission entry would mean that this particular company could submit the sale as an expense on its tax return to the Revenue and Customs, which in turn would mean the company will avoid making huge tax payments.
Das says there are transfer pricing guidelines and regulations currently in place.
“Fiji has a lot of private companies so these companies have they own set of risk. Transfer pricing has documentation which is necessary because it is part of the requirements. If there are transactions relating to off-shore activity then you’ve got to have proper documentation.”
Das says eradicating transfer pricing remains a challenge for them not only here at home but overseas as well.
However, they have noticed that some companies are slowly abiding by the law by filing proper documentation.