Fiji

Corporate - Tax credits and incentives

Last reviewed - 14 July 2020

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:

Year of assessment Percentage of export income to be deducted (%)
2018 50
2019 50
2020 60
2021 60
2022 60

'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 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.

Employment incentives

Salary and wages paid to first-time employees (including apprentices and trainees) for the first 12 months of employment qualify for a 200% deduction, subject to certain conditions. This deduction is available until 31 December 2020. Effective from 1 April 2020, the deduction has been increased to 300% and is available until 31 December 2023.

Salary and wages paid to students qualify for a 200% deduction, subject to certain conditions. This deduction is available until 31 December 2020. Effective from 1 April 2020, the deduction has been increased to 300% and is available until 31 December 2023.

Salary and wages paid to disabled persons qualify for a 300% deduction, subject to certain conditions. This deduction is available until 31 December 2022. Effective from 1 April 2020, the deduction has been increased to 400% and is available until 31 December 2023.

Employees’ education fees qualify for a 150% deduction, subject to certain conditions.

Effective 1 January 2019, the cost incurred by an employer providing employee training qualify for a 150% deduction if training providers approved by the FRCS conduct the training.

Effective 1 January 2019, salaries and wages paid to employees taking family care leave qualify for a 150% deduction, subject to certain conditions.

Effective 1 January 2019, salaries and wages paid to employees taking paternity leave qualify for a 150% deduction.

Effective 1 April 2020, a person is also allowed a deduction for 300% of the amount of salary or wages paid between 1 April 2020 to 31 December 2020 to an employee affected by COVID-19 and who is required by the Ministry of Health and Medical Services to be quarantined.

Hotel industry incentives

The existing Hotel Investment Incentive Package will be repealed and replaced with the new Hotel Investment Incentive Package effective from 1 April 2020. The new Hotel Investment Incentive Package will be applicable from 1 April 2020 to 31 December 2022.

The following incentives are available under the new Hotel Investment Incentive Package.

Approved capital expenditure incurred in building, renovating, or expanding a new or existing hotel is subject to an investment allowance of 25% of the approved expenditure, in addition to normal depreciation. Previously this was only applicable to new hotels.

The short life investment package (SLIP) incentive has been revised to include construction of new hotel or integrated tourism development with capital investment of FJ $250,000 or more (previously FJ $7,000,000) subject to certain conditions.

Under the new Short Life Investment Package (SLIP), the following concessions are available to a company:

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

The recipients of provisional approval for hotel investment tax 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.

Medical industry incentives

Approved capital expenditure incurred in building, renovating, or expanding a private hospital (minimum capital investment of FJD 1 million) or ancillary medical centre (minimum capital investment of FJD 500,000) is allowed an investment allowance of 60% of the approved expenditure, 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 ten years, provided that the capital investment in the private hospital or ancillary medical centre is more than 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.

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.

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.

Filmmaking 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.

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.

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)

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.

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 the following commercial agricultural farming and agro-processing activities, subject to certain conditions:

  • Any new activity approved between 1 January 2009 and 31 December 2028, for a period of 5 to 13 consecutive fiscal years, depending on the level of capital investment.

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.

Any gain derived from the following sale of shares shall be exempt from CIT:

  • For the purpose of listing on the SPSE, subject to certain conditions.
  • By a resident of shares in an SPSE-listed company.

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 50% 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.

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.