CIT is payable and assessed on taxable income of the business. Taxable income is calculated by subtracting allowable deductions from all assessable income (i.e. all sources of income).
Inventories are normally valued at the lower of cost and net realisable value. While the first in first out (FIFO) method is acceptable, the last in first out (LIFO) method is not, for either book or tax purposes. Conformity between book and tax reporting is not required, and there are no special provisions for valuing inventories or determining inventory flows.
Any profit or gain accrued or derived from the sale or disposal of real or personal property, or any interest therein, shall be subject to income tax when:
- the business of the company comprises dealing in such property
- the property is acquired for the purpose of selling or otherwise disposing thereof, or
- any profit or gain is derived from the carrying on or carrying out of any undertaking or scheme entered into or devised for the purpose of making a profit.
Otherwise, the capital gain may be subject to CGT of 10% (see Capital gains tax [CGT] in the Other taxes section for more information).
Dividends are no longer subject to tax in the hands of the shareholders.
Interest income derived by a resident from a company shall be appropriately subject to resident interest WHT of 10%, which may be claimed as a tax credit against income tax payable on income. Exempt income shall not be subject to WHT.
Effective 1 April 2022, interest derived by a resident person from a resident company or PE in Fiji of a non-resident company that does not exceed FJD 1,000 per annum is exempt income.
Royalty income derived by a resident company or PE may be appropriately subject to contractors’ WHT of 5%, which may be claimed as a tax credit against income tax payable on income.
Royalty income derived by a non-resident company without a PE in Fiji should be appropriately subject to WHT at the rate of 15%.
The income of the partners from a partnership for any income year is equal to each partners' respective share of income from that partnership. Each partner declares income separately and is individually liable for filing a tax return for each applicable year.
Liability of directors/shareholders
Directors/shareholders of companies in liquidation or with insufficient assets to satisfy tax liabilities may be held liable for any outstanding tax liability of the company, under certain conditions.
Other significant items
Where a foreign-controlled business in Fiji produces less income than might be expected, the revenue authorities may determine the income for tax purposes.
Resident corporations are taxed on their worldwide income. Foreign income derived from a treaty country is taxed according to the treaty. Foreign income sourced from a non-treaty country by a Fiji tax resident is subject to income tax in Fiji. A credit is allowed in Fiji for foreign tax paid on foreign income. The tax credit is limited to the lesser of the Fiji tax payable or the foreign tax paid on such income. There are no special provisions for taxing undistributed income of foreign subsidiaries.