Fiji

The tax incentives in Fiji are designed primarily to promote export sales and to encourage the development of industries that are considered of benefit to the economic development of Fiji.

Export income deduction (EID)

A deduction for export income is allowed in accordance with the following:

Notwithstanding the above, effective 1 August 2021, the agriculture, forestry, and fisheries sector will qualify for EID of 90%. This will be available until 2024.

'Export income' means chargeable income derived by a taxpayer from the business of exporting goods and services but excludes re-exports. 

Information and communication technology (ICT) tax incentives

The income of an ICT operator granted a licence after 1 January 2009 may be exempt from CIT for a period of 13 years from the date of issue of the licence. 

The income of the following may be exempt from CIT for a period of 13 years from the date of approval:

• ICT start-ups involved in application design or software development.
• Accredited ICT training institutions.

The expenses incurred by the following entities shall qualify for a 150% deduction:

• ICT start-ups involved in application design or software development.
• Accredited ICT training institutions.

A company is allowed a 250% deduction for research and development (R&D) expenses incurred in the ICT industry.

Effective 1 August 2021, new ICT infrastructure investment incentives are available with income tax exemption for up to 20 years depending on the level of capital investment and other conditions.

Effective 1 July 2023, ICT Incentive Regulations have been amended to change the definition of ICT business, i.e., services provided by businesses registered with the BPO Council of Fiji that provide specific services. The income tax exemption is based on capital investment and minimum employees.

Furthermore, ICT start-up incentive (13-year tax exemption) is now redundant and no longer exists. Income tax exemption is based on capital investment and minimum employees, as follows:

• 5-year exemption period for $100,000 to $250,000 capital investment and 25 minimum employees
• 7-year exemption period for $250,001 to $500,000 capital investment and 50 minimum employees
• 10-year exemption period for $500,001 to $1,000,000 capital investment and 75 minimum employees
• 13-year exemption period for greater than $1000,000 capital investment and 100 minimum employees

See Tax Free Regions (TFR) below for TFR incentives applicable to an ICT Park.

Employment incentives

Employment incentives (additional deductions) may be available in respect of salary and wages paid to the following categories of employees:

• First-time employees (available only until 31 July 2023).
• Part-time workers.
• Work placements.
• Persons with disabilities.
• Apprenticeships (effective from 1 August 2022). 

Employment incentives (additional deductions) are also available for employee development, family care, maternity leave, and paternity leave paid to employees. Family care and paternity leave are no longer available from 1 April 2022.

Employment incentives (additional deductions) are also available for salaries and wages paid to certain employees required to quarantine by the Ministry of Health.

Hotel industry incentives

The following hotel incentives may be available, subject to certain conditions:

• Investment allowance equal to a certain percentage of the total approved capital expenditure incurred in the hotel project in addition to normal depreciation.
• Short Life Investment Package (SLIP) for approved project, with an income tax exemption for up to 20 years for tax on profits derived from the operation of the hotel depending on the level of capital investment.

Duty concessions are also available on the importation of certain capital equipment, plant and machinery, and other items subject to approval.

The recipients of provisional approval for hotel investment incentives are required to complete the hotel projects within two years from the date provisional approval is granted.

The incentives are also available for new apartments, subject to certain conditions.

Effective 1 August 2020, a 150% tax deduction will be available for hotels and resorts for amounts paid for any salaries or wages paid for employment of local artists.

Effective 1 April 2022, the SLIP was extended to renovations and refurbishments of existing hotels or resorts. The five-year tax holiday for investments of more than FJD 2 million will be extended for an additional 12 months until 31 December 2023. The duty-free importation for all hotels and resorts will also be extended for an additional 12 months until 31 December 2023.

Effective 1 August 2022, provisions have been introduced allowing any hotel or integrated tourism development owner to seek a further extension to complete the construction of a new hotel or the extension, refurbishment, and renovation of an existing hotel or integrated tourism development.

Effective 1 August 2023, SLIP is now only available to companies carrying out a short life investment project as its first business.

Medical industry incentives

Approved capital expenditure incurred in building, renovating, or expanding a private hospital (minimum capital investment of FJD 500,000 effective 1 August 2020, previously FJD 1 million) or ancillary medical centre (minimum capital investment of FJD 500,000) is allowed an investment allowance of 30% or 60% (previously 60%) of the approved expenditure, depending on the level of investment, in addition to normal depreciation.

The tax incentive shall also apply to hospitals under Government Private Public Partnerships.

Under the Medical Investment Package (MIP), the following concessions are available to a company:

• Exemption from CIT for a period of up to 20 years effective from 1 August 2020 (previously ten years), provided that the capital investment in the private hospital or ancillary medical centre is more than FJD 2.5 million or FJD 500,000 from 1 August 2020 (previously FJD 7 million or FJD 2 million), respectively.
• Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.

Any tax losses incurred by an entity granted approval for the investment allowance or MIP may be carried forward for eight years but may only be set off against income of the medical business or from the hospital premises.

Residential housing incentives

The following concessions are available to a company developing buildings for residential purposes with a capital investment of more than FJD 2 million and at least 20 residential housing units, subject to certain conditions:

• Subsidy of 3%, 5%, or 7% (depending on the sale price per unit) of the total approved capital expenditure incurred, in addition to normal depreciation.
• Duty-free and VAT-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.
• Effective 1 August 2020, the Residential Housing Development Incentive Package has been amended to include duty concessions on the importation of raw materials, machinery, and equipment for the establishment of the housing project.

The recipients of provisional approval are required to complete the projects within two years from the date provisional approval is granted.

Effective 1 August 2019, a company that enters into a Public Private Partnership investment for a residential housing development shall be exempt from CIT for the term of the partnership, subject to conditions.

The Income Tax Subdivision of Land Incentives have been extended from 31 July 2022 to 31 July 2024.

Effective 1 August 2022, the Residential Housing and Development Incentive Package has been further incentivised as follows by introducing the New Residential Housing and Development Incentive Package for minimum capital investment of FJD 5 million with at least ten residential housing units and where project commences on or after 1 August 2022 and the building is completed within 24 months from the date of provisional approval:

• A 50% developer profit exemption.
• Customs concession (zero duty) on the importation of qualifying capital goods.

Electric vehicle charging station incentives

The following concessions are available to a company developing electric vehicle charging stations with a capital investment of more than FJD 100,000 (effective 1 August 2018; previously FJD 500,000):

• Subsidy of 5% of the total approved capital expenditure incurred, in addition to normal depreciation.
• Exemption from CIT for a period of seven years.
• Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.

Effective 1 August 2022, the Electric Vehicle Charging Station Development Package has been further incentivised as follows:

• The minimum investment threshold has been reduced from FJD 100,000 to FJD 50,000.
• The subsidy has been increased from 5% to 10% on total capital expenditure incurred in the development of electric vehicle charging stations.
• A taxpayer may apply to claim 100% write-off in the year of expenditure in respect of capital expenditure incurred for the purchase of an electric vehicle used for the taxpayer’s business.

Film-making and audio-visual incentives

A tax exemption or reduced tax rate is available on the income of non-resident employees of an approved non-resident company engaged or intending to be engaged in making a film in Fiji.

As part of the COVID-19 budget announcements, the government has announced that the processing of new provisional applications for film tax rebate, as well as pending payments of film rebate refunds, will be suspended until further notice.

A resident entity (excluding an entity holding a broadcast licence in television or radio in Fiji or with substantial shareholdings in the same) may deduct up to 150% of expenditure on audio-visual production in respect of income in the year of the expenditure. 'Audio-visual productions' include production for exhibition or sale of theatrical films, broadcast television, direct-to-video and video disk programme, audio recording, computer software, and interactive websites.

A tax exemption is available on the income derived by a taxpayer from the commercial exploitation of a copyright until the taxpayer has received from the commercial exploitation a return of up to 60% of the expenditure. The expenditure must be of capital nature and in relation to the audio-visual production costs in respect of a qualifying audio-visual production.

Tax concessions are also available for residents of areas declared as studio city zones by the appropriate government minister.

Furthermore, tax rebates of 75% of the company’s total Fiji expenditure on the films or TV commercials but not exceeding FJD 15 million (effective 1 August 2019; previously 47% of total qualifying Fiji production expenditure but not exceeding FJD 28.2 million) are available for local production companies.

Effective 1 August 2019, a 200% tax deduction is available on expenses incurred from the importation of filming equipment for film making and audio-visual production by a Fiji company.

Effective 1 August 2019, the following concession is available to a company that sets up a post-production facility with capital investment of at least FJD 2 million:

• Exemption from CIT for a period of seven years.
• Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.

The Income Tax (Film-making and Audio-visual Incentives) Regulations 2016 have been amended effective from 1 April 2022 to make the following changes:

• The film tax rebate has been decreased from 75% to 20%.
• The maximum rebate payable per approved final certificate will not be more than FJD 4 million (previously FJD 15 million).

Warehouse construction incentives

Effective 1 August 2019, the following concessions are available to a company in the warehouse business with a capital investment of more than FJD 250,000:

• Investment allowance of 50% or 100% (depending on the level of investment) of the total capital expenditure incurred (excluding the cost of land), in addition to normal depreciation.
• Exemption from CIT for a period of five, seven, or 13 years, depending on the level of investment.
• Duty-free entry of certain raw materials, plant machinery, and equipment, upon receiving provisional approval from the Minister.

Effective 1 July 2023, Warehouse Construction Incentives has been repealed. Applications received before 1 July 2023 will still be processed.

Retirement village incentives

Effective 1 August 2019, the following concessions are available to a company constructing a new retirement village with capital investment of at least FJD 250,000 (effective 1 August 2018; previously FJD 500,000):

• Exemption from CIT for a period of five, seven, or 13 years, depending on the investment level.
• Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.

Manufacture of pharmaceutical products investment package

Effective 1 August 2019, the following concessions are available to a company that develops a building or buildings for the manufacture of pharmaceutical products with capital investment of more than FJD 250,000:

• Exemption from CIT for a period of five, seven, or 13 years, depending on the investment level.
• Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.

The recipients of provisional approval are required to complete the projects within two years from the date provisional approval is granted.

Tax Free Regions (TFRs) incentives

The following concessions may be available to a newly incorporated entity engaged in trade, business, or manufacture in the TFRs:

• Exemption from CIT for a period of 5 to 20 consecutive fiscal years for a new activity established between 1 January 2009 to 31 December 2028, depending on the level of investment and the equity held by an iTaukei landowner.
• Duty-free entry of raw materials, machinery, and equipment (including parts and materials) required for the establishment of the business.

The areas declared TFRs are Vanua Levu, Rotuma, Kadavu, Lomaiviti, Lau, Naboro (effective 1 August 2019), and the airport side of the Rewa Bridge, excluding the town of Nausori up to the Ba side of the Matawalu River (previously Korovou to Tavua).

CIT exemption of 5, 7, or 13 years (depending on the amount of capital investment) is available to a taxpayer engaged in any new activity established in the TFR, subject to certain conditions.

Effective 1 August 2021, the TFR incentives have been extended to include investment in an ICT Park with income tax exemption for up to 25 years depending on the level of capital investment in an ICT Park and other conditions.

Submarine network cable investment incentives

Effective 1 August 2021 and subject to certain conditions, the following concessions are available to an approved company that undertakes a project involving the establishment of a new submarine network cable business including the construction, renovation, or refurbishment of a building, factory, or plant into a cable landing station or other associated infrastructure development:

• Exemption from CIT for a period of 30 years on the income of the submarine network cable business where the capital investment is more than FJD 40 million.
• Upon receiving provisional approval, duty-free entry of all capital goods imported by or on behalf of the applicant and used in the carrying out of the project.

Recycling business investment incentives

Effective 1 August 2021 and subject to certain conditions, the following concessions are available to an approved company that undertakes a project involving the establishment of a new recycling business building, factory, or plant that meets the minimum capital investment threshold including the construction, renovation, or refurbishment of a building, factory, or plant:

• Exemption from CIT for a period of up to 20 years on the income of the recycling business depending on the level of capital investment.
• Upon receiving provisional approval, duty-free entry of all capital goods imported by or on behalf of the applicant and used in the carrying out of the project.

Commercial agricultural farming and agro-processing business investment incentives

Effective 1 August 2021 and subject to certain conditions, the following concessions are available to an approved entity that undertakes a project involving the establishment of a new commercial agricultural farming and agro-processing business building, factory, plant, or farm that meets the minimum capital investment threshold including the construction, renovation, or refurbishment of a building, factory, plant, or farm:

• Exemption from CIT for a period of up to 20 years on the income of the commercial agricultural farming and agro-processing business depending on the level of capital investment.
• Upon receiving provisional approval, duty-free entry of all capital goods imported by or on behalf of the applicant and used in the carrying out of the project.

Other tax incentives

An investment allowance of 55% is available for the construction or refurbishment and renovation of a vessel, in addition to normal depreciation, subject to certain conditions.

An approved mining company may, for a specified period, be exempt from CIT or taxed at a lower rate. The holder of a valid prospecting licence may write off approved expenditure on prospecting for minerals against income from all sources.

A 150% deduction is available for direct capital expenditure incurred by commercial banks in rural banking programmes.

Investors engaged in value adding processes in the food processing, agricultural processing, fisheries, or forestry business may be able to claim a 100% deduction with respect to amounts invested or re-invested (for expansion), provided that the businesses meet the 50% local content rule.

A CIT exemption may be available to a taxpayer engaged in certain commercial agricultural farming and agro-processing activities, subject to certain conditions.

Income derived by a taxpayer from a new activity in processing agricultural commodities into bio-fuels established between 1 January 2009 and 31 December 2028 may be exempt from CIT for a period of 5 to 13 consecutive tax years (depending on the level of capital investment), under certain conditions.

An exemption from CIT for a period of five years may be available to a taxpayer engaging in renewable energy projects and power cogeneration.

Entities in the agriculture, fisheries, and tourism industries, with a maximum turnover threshold of FJD 500,000, may also be exempt from CIT.

A 150% deduction is available on expenses incurred in reorganising a company for the purpose of listing on the SPSE.

40% of capital expenditure of not less than FJD 50,000 incurred by any existing business located in Vanua Levu is allowed as a deduction for tax purposes, subject to certain conditions.

A 150% deduction is available on expenditure not exceeding FJD 250,000 incurred in marketing goods and services for export to any of the South Pacific countries, excluding Australia and New Zealand.

The income of a shipping company derived from servicing Rotuma and the Lau Group shall be exempt from CIT for a period of seven years, subject to certain conditions.

A 150% deduction is available on expenditure incurred for uniforms made in Fiji and supplied to an employee, provided that the cost is not recovered from the employees.

A 150% deduction is available for foreign companies for capital expenditure incurred for the relocation to Fiji of its regional or global headquarters, which provides management, technical, or other supporting services to its offices or associated companies, subject to certain conditions.

250% deduction is available for companies for R&D expenses incurred in the renewable energy industry.

55% deduction is available for companies for expenditure incurred in investing in electric omnibuses.

A taxpayer who incurred more than FJD 250,000 (effective 1 August 2019; previously FJD 1 million) in capital expenditure for the modernisation of buildings may avail of CIT exemption equal to 25% of the total expenditure incurred, subject to certain conditions.

New incentive packages have been introduced effective 1 August 2020 for the following:

• Investment by private companies in buildings to be used by the government or an entity approved by the government.
• Subdivision of land for residential or commercial purposes.

Effective 1 August 2020, a 150% deduction of prescribed costs for listing a corporate bond on the SPSE is available. Furthermore, any interest income earned from corporate bonds are exempt for income tax purposes.

Effective 1 August 2021, the following additional incentives are available:

• A 150% deduction for deposits into a new pandemic reserve account set up with a financial institution.
• A 200% tax deduction will be available to a landlord of commercial buildings for the aggregate sum of the difference between the rent payable on 31 July 2021 and the rent payable for the period commencing on and from 1 August 2021 and ending on 31 July 2022, subject to certain conditions. This incentive has been extended to 31 July 2023.  
• A 200% tax deduction is available for FNPF employer additional contributions paid up to 10% of the total salary paid to the employee.
• A 200% tax deduction will be available for expenses incurred for the development or upgrade of an online shopping website with integrated payment platform.
• A 200% tax deduction will be available for expenses incurred for any investment in a fogging machine used for the purpose of sanitisation or decontamination.
• A 300% tax deduction will be available for costs incurred from 1 August 2021 to 31 December 2023 for the installation, implementation, and operation of an electronic fiscal device (EFD).

Effective from 1 April 2022, a 13-year tax holiday has been given to the company that owns and operates the Fijian Drua team. Import duty exemption will be available from 1 July 2022 to 30 June 2023 for the purpose of the establishment of a unit for the high performance of the Fijian Drua team.

The 300% tax deduction for the amount of salary or wages paid to an employee who is required by the Ministry of Health and Medical Services to be quarantined is only available if the employee has tested positive for COVID-19 or is primary or secondary contact of a person who has tested positive and has been extended from 31 December 2022 to 31 December 2023.

Effective 1 August 2022, the following additional incentives are available:

• A 100% tax deduction is available to companies for the amount of tuition and living expenses paid for a student’s education at a higher education institution. Conditions apply. Effective 1 August 2023 this incentive has been repealed.

• A hotel or resort carrying on business in Fiji is allowed a deduction for 300% (previously 150%) of the amount of any salary or wages paid for the employment of a local artist.

The income derived in connection with water extraction and bottling (or any part thereof) will be exempt from 1 August 2023 to 31 July 2030. No expenses will be allowed as a deduction or carried forward. No capital expenditure shall be depreciated or amortised, or carried forward.

Foreign tax credit

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