Fiji

Individual - Significant developments

Last reviewed - 19 July 2022

Income tax

The following amendments to the Fiji Income Tax Act (FITA) 2015 and related Regulations come into effect from 1 April 2022 and apply to individuals conducting a business (including partnerships):

  • The debt forgiveness provisions under the COVID-19 response budget have been extended to 31 December 2023 and applies to debt created up to 31 December 2022.
  • 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 has been extended from 31 December 2022 to 31 December 2023.
  • A 200% tax deduction is allowed for any salary and wages paid to an employee when the employee is on maternity leave.
  • Interest derived by a resident person from a resident company or permanent establishment in Fiji of a non-resident company that does not exceed $1,000 per annual is an exempt income.
  • ECAL of 5% has been removed and the SRT rate has increased by the same percentage (i.e., 5%) for the computation of personal income tax. The tax burden remains the same.
  • The 200% tax deduction available to landlords of commercial buildings for the amount of reduction of rent has been extended from 31 July 2022 to 31 July 2023.
  • A 200% tax deduction is allowed for sponsorships of not less than $250,000 made to the company that owns and operates the Fijian Drua team.

The following amendment to the Fiji Income Tax Act (FITA) 2015 comes into effect from 19 August 2021:

  • Any capital gains made by a person on the disposal of shares is exempt from capital gains tax (CGT) if the shares were held by the person from before 1 May 2011 (i.e. before the introduction of CGT in Fiji).

The following amendments to the FITA 2015 and related Regulations come into effective from 1 August 2021:

  • The re-organisation provisions have been extended to include resident partnerships.

The following amendments to the FITA 2015 and related Regulations come into effective from 1 August 2021 and apply to individuals conducting a business (including partnerships):

  • The debt forgiveness provisions under the COVID-19 response budget have been extended to 31 December 2022 and apply to debt created up to 31 December 2021.
  • The export income deduction (EID) of 60% has been extended until 2024. Persons engaged in the agriculture, fisheries, or forestry sector will qualify for EID of 90% until 2024.
  • 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. 
  • A 200% tax deduction is available for Fiji National Provident Fund (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 to a taxpayer for costs incurred from 1 August 2021 to 31 December 2023 for the installation, implementation, and operation of an electronic fiscal device (EFD).
  • 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 a primary or secondary contact of a person who has tested positive. The deduction has been extended to 31 December 2022.
  • Any hotel or integrated tourism development owner who has been granted provisional approval for investment allowance under the hotel investment incentives on or after 1 January 2016 shall complete construction of the project within 24 months from the date of provisional approval.
  • The hotel investment allowance incentive has been increased to 50% (previously 25%).
  • The income tax subdivision of land incentives have been amended to replace the investment allowance previously available with income tax exemption on developer profits derived from the subdivision of land.
  • New incentive packages have been introduced for commercial agricultural farming and agro-processing business with an income tax exemption for up to 20 years depending on the level of capital investment and other conditions.

Tax Administration Act (TAA)

The following amendments to the TAA and related Regulations are effective from 1 August 2021:

  • A tax assessment (original tax assessment) may only be amended as follows:
    • In case of fraud, wilful neglect, or serious omission by or on behalf of the taxpayer: At any time.
    • In case of a company with a gross turnover of less than 1.25 million Fijian dollars (FJD): Within three years of the date the taxpayer filed the self-assessment return or within three years of the date the CEO of the Fiji Revenue and Customs Service (FRCS) serves notice of the tax assessment on the taxpayer.
    • In any other case: Within six years of the date the taxpayer filed the self-assessment return or within six years of the date the CEO of the FRCS serves notice of the tax assessment on the taxpayer.
  • An amended tax assessment may be amended as follows:
    • In case of fraud, wilful neglect, or serious omission by or on behalf of the taxpayer: As the CEO of the FRCS deems fit.
    • In case of a company with a gross turnover of less than FJD 1.25 million: Within three years of serving the notice of the original or amended assessment on the taxpayer.
    • In any other case: Within six years of serving the notice of the original or amended assessment on the taxpayer.
  • If the FRCS is required to pay a refund of overpaid tax to a taxpayer under any tax law, the FRCS must first apply the amount of the refund against any tax or duty owing by the taxpayer under any tax, customs, or excise law.
  • If a non-resident person derived a fee for the provision of a professional service and paid non-resident withholding tax (WHT) to the FRCS on the same contrary to an international tax treaty to which Fiji is a party, the non-resident person may make a claim for a refund of the non-resident WHT in accordance with the Mutual Agreement Procedure (MAP) under the respective international tax treaty.
  • A FJD 500 penalty will be imposed on a taxpayer who presents or submits a dishonoured cheque.
  • Penalty for failure to pay tax by the due date is deemed to have been waived if the taxpayer makes payment arrangements with the FRCS within three months from 1 August 2021 and pays the tax before 30 June 2022.
  • Previously only the Tax Tribunal could, at any stage in a proceeding, refer a decision to the CEO of the FRCS for reconsideration. This is now also extended to the Tax Court.
  • The implementation of EFD has been further deferred until 31 December 2023. 

Value-added tax (VAT)

The following amendments to the VAT Act are effective from 1 April 2022:

  • Certain "basic foods items" are zero-rated for VAT purposes. 
  • Certain prescribed goods and services are subject to VAT at the rate of 15%. 

The following amendments to the VAT Act are effective from 1 August 2021:

  • An insurance indemnity payment received pursuant to a contract of parametric insurance is not deemed to be consideration received for a supply of services by a registered person in the course or furtherance of the registered person's taxable activity.
  • Parametric insurance is an exempt supply for VAT purposes.
  • Nothing shall prohibit the FRCS CEO from disclosing the VAT registration status of any person.
  • Crew allowance and unaccompanied luggage for a travelling passenger are not subject to importation VAT.
  • The definition of omnibus for VAT zero rating purposes was amended to align with the definition contained in the Land Transport Act 1998.

Environment and climate adaptation levy (ECAL)

The following amendments to the ECAL Act are effective from 1 April 2022:

  • The 5% ECAL previously applicable on prescribed services, white goods and passenger motor vehicles, superyacht charter, plastics and personal income has been removed.
  • The 50 cents ECAL on plastic bags has been renamed as Plastic Bag Levy.
  • The 5% ECAL on superyacht charters has been renamed as Superyacht Charter Fee.

The following amendments to the ECAL Act are effective from 1 August 2021:

  • Subject to certain other conditions, provision is made to allow for the refund of ECAL levied or paid inadvertently or erroneously, provided that the claim for the refund is made within one year from the date of the ECAL payment unless the refund is attributable to an error made by the FRCS.
  • ECAL exemption on the importation of smart phones and electric lawn mowers under concession codes 212 (private individual), 218 (passengers disembarking in Fiji), 218A (crew allowance for international commercial scheduled flight), and 219A (a bona fide passenger finally disembarking in Fiji) of the Customs Tariff Act 1986. 
  • ECAL exemption for the importation of the following items under concessions codes 212 (private individual), 218 (passengers disembarking in Fiji), 218A (crew allowance for international commercial scheduled flight), 219A (a bona fide passenger finally disembarking in Fiji), 235 (existing hotels and resorts), and 235A:
    • Air conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated.
    • Refrigerators and freezers.
    • Televisions.
    • Household and commercial laundry-type washing machines, including machines that both wash and dry.
    • Household and commercial clothes-dryers.
    • Dish washing machines.
    • Electric stoves.
    • Microwave ovens.
    • Hair dryers.
    • Toasters.
    • Electric kettles.