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Fiji

Country Name: Republic of Fiji
Currency: Fijian Dollar (FJD)
Primary Tax Authority: Fiji Revenue and Customs Service (FRCS)
Key Legislation:

  • Income Tax Act
  • Value Added Tax (VAT) Act
  • Customs Act
  • Companies Act

Fiscal Authority Allocation

Centralized Fiscal System:
Fiji operates a centralized tax system, with the Fiji Revenue and Customs Service (FRCS) responsible for collecting taxes, including corporate income tax (CIT), personal income tax (PIT), and value-added tax (VAT). Local governments do not have independent taxing authority.

Corporate Income Tax (CIT)

Standard Rate: 20%
Fiji imposes a corporate income tax rate of 20% on the net taxable income of resident companies. Non-resident companies are taxed at a higher rate on Fijian-sourced income.

Reduced Rates:
Certain industries, such as those involved in tourism and agricultural exports, may qualify for reduced CIT rates as part of government initiatives to promote economic development in specific sectors.

Corporate Forms and Taxation:

  1. Corporation (Company): The standard corporate form, subject to the 20% CIT rate.
  2. Branches of Foreign Companies: Non-resident companies are taxed at 20%, but profits repatriated are subject to a 9% withholding tax.

Exemptions and Incentives:

  • Investment Incentives: Tax holidays and customs duty exemptions are available for businesses in sectors like tourism, renewable energy, agriculture, and ICT.
  • Small and Micro Enterprises: Qualifying small businesses are subject to reduced CIT rates or may benefit from tax holidays.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 9%
Fiji applies a VAT rate of 9% on most goods and services. VAT is levied on the sale of goods, provision of services, and imports.

Exemptions:
Basic food items, education, healthcare services, and financial services are exempt from VAT. Exports are zero-rated, allowing businesses to reclaim VAT paid on inputs used to produce exported goods.

Personal Income Tax (PIT)

Progressive Rates:
Fiji applies progressive personal income tax rates as follows:

  • Up to FJD 30,000: 0%
  • FJD 30,001 to FJD 50,000: 18%
  • Above FJD 50,000: 20%

Social Responsibility Tax (SRT):
In addition to PIT, high-income earners (above FJD 270,000) are subject to the Social Responsibility Tax (SRT), with rates ranging from 23% to 35%, depending on the income level.

Additional Mandatory Contributions

Fiji National Provident Fund (FNPF) Contributions:
Employers and employees must contribute to the Fiji National Provident Fund, which provides pensions and other social security benefits.

  • Employer Contribution: 10% of gross salary.
  • Employee Contribution: 8% of gross salary.

Withholding Taxes

  • Dividends: 9% for residents and non-residents.
  • Interest: 10% for non-residents (exempt for residents).
  • Royalties: 15%
    Withholding tax rates may be reduced under Fiji’s double taxation agreements (DTAs).

Transfer Pricing Rules

Fiji follows OECD transfer pricing guidelines. Related-party transactions must comply with the arm’s-length principle, and companies must maintain documentation to support their transfer pricing arrangements.

Special Tax Regimes

  • Tourism Sector Incentives: The government offers tax holidays, reduced CIT rates, and VAT exemptions for businesses involved in tourism-related infrastructure and services, such as hotels, resorts, and adventure tourism.
  • Agricultural and Export-Oriented Industries: Tax incentives are available for businesses involved in agriculture, fisheries, and export-oriented industries. These may include CIT reductions and exemptions from customs duties and VAT.
  • ICT and Renewable Energy: Tax holidays and CIT reductions are available for companies investing in information and communications technology (ICT) and renewable energy projects, particularly solar and wind power generation.

Other Taxes

  • Customs Duties: Import duties are levied on goods brought into Fiji, with rates generally ranging from 5% to 32%, depending on the type of goods. Essential goods and raw materials often benefit from lower rates or exemptions.
  • Excise Taxes: Excise duties are levied on certain goods, such as alcohol, tobacco, and fuel.
  • Land Lease and Property Tax: There is no general property tax in Fiji, but land leases may be subject to fees, especially for agricultural or tourism-related activities.

Double Taxation Agreements (DTAs)

Fiji has signed several double taxation agreements (DTAs) with countries such as Australia, New Zealand, and Japan. These agreements help reduce withholding taxes on dividends, interest, and royalties, and prevent the double taxation of cross-border income.

Local Taxes

Local governments in Fiji do not have authority to impose taxes. All major taxes, including VAT, CIT, and PIT, are centrally managed by the Fiji Revenue and Customs Service (FRCS).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by March 31st of the following year. Personal income tax returns are also due by the same date. The tax year in Fiji follows the calendar year.

Penalties for Late Filing:
Penalties for non-compliance or late filing include interest on overdue taxes and fines. Interest on unpaid taxes is generally set at 1.5% per month, with additional penalties for significant delays.

Recent Developments

Tourism Sector Recovery:
Fiji has introduced various tax incentives to support the recovery of its vital tourism industry, which was heavily impacted by the COVID-19 pandemic. These include tax holidays, reduced CIT rates, and customs duty exemptions for new tourism projects and expansions of existing infrastructure.

Green Energy Initiatives:
Fiji is encouraging investment in renewable energy and green technologies to combat climate change and reduce reliance on imported fossil fuels. Companies investing in solar, wind, and hydroelectric projects may qualify for tax holidays and VAT exemptions on equipment.

Digital Economy Development:
The government is focusing on expanding Fiji’s ICT sector by offering tax incentives for software development, telecommunications, and data centers. These include CIT reductions, customs duty exemptions, and VAT relief on technology-related imports.

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