Employment incentives (additional deductions) may be available to an employer in respect of salary and wages paid to the following categories of employees:
- First-time employees.
- 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 leave, paternity leave, and maternity leave paid to employees. Family care and paternity leave are no longer available from 1 April 2022.
Employment incentives (additional deductions) are also available as part of the COVID-19 response for salaries and wages paid to certain employees required to quarantine by the Ministry of Health.
Hotel industry incentives
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. Effective 1 August 2021, the investment allowance incentive has been increased to 50%.
The recipients of provisional approval for hotel investment tax incentives are required to complete the hotel project within two years from the date provisional approval is granted. Effective 1 August 2022, provisions were introduced allowing any hotel or integrated tourism development owner to seek 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 2020, a 150% (300% effective from 1 August 2022) tax deduction will be available for hotels and resorts for amounts paid for any salaries or wages paid for employment of local artists.
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.
Tax concessions are also available for residents of areas declared as studio city zones by the appropriate government minister.
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 business registered in Fiji.
Effective 1 August 2019, the following concession is available to a person 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.
Effective 1 April 2022, The Income Tax (Film-making and Audio-visual Incentives) Regulations 2016 has been amended 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).
Other tax incentives
Effective 1 August 2021, some of the other incentives available to businesses include the following:
- The re-organisation provisions have been extended to include resident partnerships.
- 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. Effective 1 April 2022, this 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 Electronic Fiscal Device (EFD).
- Commercial agricultural farming and agro-processing business investment incentives are available, with income tax exemption for up to 20 years depending on the level of capital investment and subject to other conditions.
Effective 1 April 2020, the following incentives are available as part of government’s response to the COVID-19 pandemic:
- A landlord that reduces the commercial rent payable under a tenancy agreement is allowed a deduction for the aggregate sum of the difference between the rent payable on 26 March 2020 and the rent payable in the period commencing on and from 27 March 2020 to 31 December 2020, subject to certain conditions.
- A person is allowed a deduction for 300% of the amount of a cash donation made in a tax year to a fund established by the government to respond to the COVID-19 pandemic.
Taxpayers in the agriculture, fisheries, and tourism industries, with a maximum turnover threshold of FJD 500,000, may be exempt from income tax.
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.
Income derived by a Fiji citizen from backpacker operations with an annual gross turnover not exceeding FJD 1 million is exempt from income tax.
Income equal to 25% of the total capital expenditure incurred exceeding FJD 250,000 (effective 1 August 2019; previously FJD 1 million) for the modernisation of buildings is exempt from income tax, subject to certain conditions.
Effective 1 August 2019, income derived from a Public Private Partnership investment for a residential housing development is exempt from tax for the term of the partnership, subject to certain conditions.
Effective 1 August 2020, any interest income earned from corporate bonds listed on the SPSE are exempt for income tax purposes.
Effective 1 August 2020, a new incentive package has been introduced for the subdivision of land for residential or commercial purposes.