fiji personal Income Tax

Personal income tax rates in Fiji are progressive up to 31%.

The individual tax rates for the year ending 31 December 2010 are as follows:

Resident individuals
Chargeable income ($)      Tax payable

0 - 15,000                        Nil
15,001 to 15,600               25% of excess over $15,000
15,601 to 22,000               $150 + 31% of excess over $15,600
22,001 and above              $2,134 + 31% of excess over $22,000

Non-resident individuals
Chargeable income ($)      Tax payable

Up to 9,000                      20%
9,000 to 10,000                $1,800 + 25% of excess over $9,000
10,001 to 20,000              $2,050 + 30% of excess over $10,000
20,001 and above             $5,050 + 31% of excess over $20,000

Income tax is payable by Fiji residents on their worldwide income. Non-resident individuals pay tax on Fiji-sourced income only. Residence is determined with reference to domicile, place of fixed abode and length of time in Fiji.

Fiji Income tax is payable on assessable income less allowable deductions. Assessable income includes employment income, business income, rents, interest and dividends.

Tax deductions are allowable for expenditure incurred in earning assessable income (self-employed income/business profits) with limited deductions against employment income. Also limited personal allowances are available.

Employment-related earnings have tax deductions at source. Self-employed individuals and those with non-salary/wage income are required to pay provisional tax in three instalments based on the previous year's tax liability.

fiji Corporate Income Tax

Fiji corporate income tax rate is 28%.

Company tax is payable by Fiji resident companies on non-exempt income derived from all sources. Non-resident companies are required to pay the tax on income sourced in Fiji.

Resident companies are those that are incorporated in Fiji or carry on business in Fiji and have either practical management and control in Fiji or voting power controlled by shareholders who are Fiji residents.

Effective 2010, the resident company tax rate will be 28% for all companies. The tax year usually runs from 1 January to 31 December although alternative fiscal years are permitted.

A company is required to make three advance payments of tax (each of 33.33% of the estimated tax payable), the first being made no later than the end of its financial year; the second payment being made within three months of the end of the financial year; and the third payment being made within seven months of the end of the financial year or within one month from the date of the issue of notice of assessment whichever is earlier.

CAPITAL GAINS TAX

There is no formal capital gains tax in Fiji. However, where a capital asset was bought for the sole purpose of resale or as part of a profit-making scheme, any profits or gains are included with other taxable company income. Gains on sale of land are subject to land sales tax under the Land Sales Act subject to certain exemptions.

BRANCH PROFITS TAX

Where a branch of a foreign company operates in Fiji, the profits of the branch are subject to Fiji corporate tax at the following rates:

- Non-resident shipping companies 2%
- Other non-resident companies carrying on business in Fiji (e.g. branch profits) 28%

HOTEL TURNOVER TAX

Hotel turnover tax at the rate of 5% is applicable on hotel turnover.

FRINGE BENEFITS TAX

There is no tax payable by the company on fringe benefits. Instead, any benefits provided to employee are included in their personal income and are subject to tax.

STAMP DUTY

Stamp duty is imposed on transfer of shares, transfer of properties, agreements, mortgages, partnership agreements, short term insurance policies, etc.

OTHER TAXES

These include import customs duty, import excise duties and excise duties on certain manufactured products (alcohol, tobacco). Gains on sale of land are subject to land sales tax under the Land Sales Act subject to certain exemptions.

DETERMINATION OF TAXABLE INCOME

The taxable income of a company is determined by ascertaining assessable income less allowable deductions. Generally, expenditure and/or losses are deductible provided they are incurred in gaining or producing assessable income. Items of a capital or domestic nature are non-deductible.

DEPRECIATION

Assets acquired on or after 1 January 1998 are subject to broad banded depreciation rates from 2.5% to 50%. The effective life of the asset, which is determined by the Commissioner of Inland Revenue, is used to determine the depreciation rate. A loading of 20% can be applied to the broad banded rates. Furthermore, increased depreciation rates are now available for buildings and computer hardware and software. New buildings constructed before 31 December 2010 may also qualify for accelerated depreciation allowance at the rate of 20%.

STOCKS/INVENTORY

Trading stock on hand at the beginning and the end of each income year must be taken into account in determining assessable income. The closing value adopted becomes the opening value at the beginning of the following year. The taxpayer has the option to value stock at cost or the lower of cost or market values. Valuation methods include FIFO and average cost.

INTEREST DEDUCTIONS

Interest is deductible where it is incurred in gaining or producing assessable income.

TAX LOSSES

Tax losses may be carried forward for eight years provided there is at least 51% continuity of ownership or no substantial change in the nature of the business. Loss carry-back and inter-group company transfer is not permitted.

FOREIGN SOURCED INCOME

Resident corporations are taxed on their worldwide income. Income derived from a treaty country is taxed in Fiji, subject to treaty provisions.

TAX INCENTIVES

Specific deductions and concessions are available for certain industries and business sectors such as mining, hotel and tourism related industry, film making and audio-visual industry, ICT industry, manufacturing, fisheries, agriculture, food processing and forestry. Income tax exemption is available to certain small and micro enterprises with turnover less than $300,000.

Generous income tax and other incentives, which includes income tax exemption for 10 to 20 years, special depreciation allowance and duty concessions, are available to approved major hotel developments.

An accelerated write-off at the rate of 20% on construction of new buildings is available until 31 December 2010 subject to certain requirements.

A 40% investment allowance is available in respect of qualifying investments in agricultural, information technology and rural manufacturing businesses.

Generous income tax and other incentives, including a tax holiday period, are available for the ICT industry. Furthermore, attractive tax incentive package is available for qualifying industries established on the island of Vanua Levu and other remote islands.

Profits from qualifying exports are eligible for certain exemptions from income tax.

FOREIGN TAX RELIEF

A credit is allowed for tax paid in another country on the foreign income, limited to the lesser of the Fiji or overseas tax payable on such income.

CORPORATE GROUPS

Group taxation is not permitted.

RELATED PARTY TRANSACTIONS

All related party transactions are required to be undertaken on an arm's-length (market) consideration. Fiji has specific transfer pricing provisions and antiavoidance provisions within the Income Tax Act.

WITHHOLDING TAX

Non-resident withholding tax is deducted from interest, dividends, management fees, know-how fees, royalties etc paid to non-residents. Withholding tax is levied subject to tax treaty provisions.

Dividend withholding tax is not payable to the extent such dividend is paid out of tax paid company profits.

EXCHANGE CONTROL

Overseas remittances in and out of Fiji including repatriation of capital and remittance of profits, dividends, interest, loan repayments, etc, generally require prior approval of the Reserve Bank of Fiji. Currently, there are certain restrictions on repatriation of capital and remittance of profits and dividends. Non-resident controlled entities are subject to certain borrowing restrictions.

Fiji Value-Added Tax (VAT)

VAT rate in Fiji is 12.5%.

There is no sales tax in Fiji although there is excise duty payable by manufacturers on sale of certain products such as alcohol, tobacco and carbonated drinks. VAT is charged at a rate of 12.5% on most goods and services in Fiji, the exceptions being certain exempt items such as financial services, residential dwellings, educational services, certain zero rated items such as goods and services exported and certain basic food items.