Fiji

Individual - Significant developments

Last reviewed - 08 June 2021

Income tax

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 (that is, before the introduction of CGT in Fiji).

The following amendments to the Fiji Income Tax Act (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 Fiji Income Tax Act (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 applies to debt created up to 31 December 2021.
  • The export income deduction (EID) of 60% has been extended until 2024. Persons engaged in 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 online shopping website with integrated payment platform.
  • A 200% tax deduction will be available for expenses incurred for any investment in 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 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 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 - income tax exemption for up to 20 years depending on the level of capital investment and other conditions.

Effective from 1 August 2020, subject to certain conditions, a tax deduction will be allowed on loans (inclusive of both principal amount and interest accrued) taken from a licensed financial institution for medical treatment.

As part of the COVID-19 response and effective from 1 April 2020:

  • The rule for advance payment of tax for individuals will be relaxed from the current three payments at a rate of 331/3% to nine payments at a rate of 111/9 % due at the end of each month from April 2020 to December 2020, and penalties on estimated tax will also be removed. 
  • Any penalty payable in respect of any failure by a taxpayer to file a tax return by the due date is deemed to have been waived if the due date falls on a date within the amnesty period (i.e. the period commencing on and from 31 March 2020 to 31 December 2020).
  • If an individual has a net business loss, the individual’s employment income is reduced by the net business loss in computing the chargeable income, provided that the amount reduced does not exceed 20,000 Fijian dollars (FJD).
  • The compulsory Fiji National Provident Fund (FNPF) employer and employee contributions have been reduced to 5% respectively.

The following amendments to the Fiji Income Tax Act (FITA) 2015 and its Regulations are effective from 1 August 2019 unless indicated otherwise:

  • Tax losses incurred on or after 1 January 2019 can be carried forward for eight years.
  • The withholding tax (WHT) summary should be lodged monthly instead of annually.
  • The export income deduction (EID) of 50% has been reinstated from 1 January 2018 and has been extended until 2020.
  • The tax rate for redundancy payments of 15% has been repealed. Redundancy payment shall be included in taxable income subject to the normal individual income tax rates.
  • Assets costing FJD 1,000 or less may be fully depreciated in the year of acquisition, subject to certain conditions.
  • 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.
  • Introduction of the Post Production Facility Investment Package.
  • Income tax exemption on income from a Public Private Partnership investment for a residential housing development for the term of the partnership, subject to conditions.

The following changes are effective from 1 January 2020:

  • 100% of the employer's statutory FNPF contribution paid by the employer has been reinstated as a tax deduction.
  • The cash donations exceeding FJD 15,000 (previously FJD 50,000) to a Sports Fund for purposes of sports development in Fiji shall qualify for a deduction of 150%.

Effective 1 April 2020, a 150% tax deduction is available for employer additional contributions paid up to 10% of the total salary paid to the employee.

Tax Administration Act (TAA)

The following amendments to the TAA and related Regulations are effective 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 - within 3 years of the date the taxpayer filed the self assessment return or within 3 years of the date the CEO of the FRCS serves notice of the tax assessment on the taxpayer.
    • in any other case - within 6 years of the date the taxpayer filed the self assessment return or within 6 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 $1.25 million - within 3 years of serving the notice of the original or amended assessment.
    • in any other case - within 6 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 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 withholding tax in accordance with the Mutual Agreement Procedure under the respective international tax treaty.
  • A $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 3 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 Electronic Fiscal Device (EFD) has been further deferred until 31 December 2023. 

Effective 1 April 2020, any penalty payable in respect of any failure by a taxpayer to file a tax return by the due date is deemed to have been waived if the due date falls on a date within the amnesty period (i.e. the period commencing on and from 31 March 2020 to 31 December 2020).

The following amendments to the TAA are effective 1 August 2019:

  • A claim for tax refund is not admissible if the taxpayer has failed to lodge a tax return or any document required by law and does not make a claim within three years after yea- end unless the refund is attributable to an error by the tax authority.
  • The late lodgement penalty would also apply if any documents required by the tax laws (other than a tax return) are not lodged.
  • Tax returns and required documents may be lodged by electronic means.
  • Notices may be served by electronic means.
  • Lodgement may be made electronically by the due date even if the due date falls on a non-working day.

Value-added tax (VAT)

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.

The supply of residential accommodation is exempt from VAT effective 1 August 2020.

The importation of the following shall not be subject to VAT effective 1 August 2019:

  • Hybrid and electric charging vessels.
  • Ships for coasting-trade.

Environment and climate adaptation levy (ECAL)

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 movers 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) and 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 which both wash and dry
    • Household and commercial clothes-dryers
    • Dish washing machines
    • Electric stoves
    • Microwave ovens
    • Hair dryers
    • Toasters
    • Electric kettles

The following amendments to the ECAL Act are effective from 1 August 2020:

  • ECAL has been reduced from 10% to 5% on prescribed services, income, super yacht charter fees, imported white goods, and imported vehicles.
  • The threshold for application of ECAL has been increased from FJD 1.25 million to FJD 3 million.
  • ECAL refund is allowed for persons who import goods for the purposes of re-export based on specific conditions.

The following amendments to the ECAL Act are effective from 7 July 2019 unless indicated otherwise:

  • ECAL on plastic bags will increase from FJD 0.20 to FJD 0.50 effective from 1 January 2020.
  • ECAL shall be applicable on the importation of the following goods:
    • Hybrid vehicles.
    • Smart phones.
    • Air conditioners.
    • Refrigerator and freezers.
    • Televisions.
    • Clothes washers and dryers.
    • Dish washers.
    • Electric stoves.
    • Microwave ovens.
    • Electric lawn mowers.
    • Hair dryers.
    • Toasters.
    • Electric kettles.

The following amendments to the ECAL Act are effective from 1 August 2020:

  • ECAL is reduced from 10% to 5% on prescribed services, income, imported white goods, and imported vehicles.
  • The annual gross turnover threshold for ECAL exemption has been increased from FJD 1.25 million to FJD 3 million.
  • ECAL refund is allowed for persons who import goods for the purposes of re-export based on specific conditions.

The following amendments to the ECAL Act are effective from 7 July 2019 unless indicated otherwise:

  • ECAL on plastic bags will increase from FJD 0.20 to FJD 0.50 effective from 1 January 2020.
  • ECAL shall be applicable on the importation of the following goods:
    • Hybrid vehicles.
    • Smart phones.
    • Air conditioners.
    • Refrigerator and freezers.
    • Televisions.
    • Clothes washers and dryers.
    • Dish washers.
    • Electric stoves.
    • Microwave ovens.
    • Electric lawn mowers.
    • Hair dryers.
    • Toasters.
    • Electric kettles.

    Stamp duties

    Effective from 1 August 2020, the Stamp Duty Act will be repealed; however, any document that is executed or takes effect before 1 August 2020 remains subject to stamp duty.

    Effective from 1 April 2020 and for the period commencing on and from 1 April 2020 to 31 December 2020, stamp duty exemption applies on:

    • any mortgage, except the transfer or assignment of a mortgage and, for the avoidance of doubt, where stamp duty payable on any other instrument is as per the like duty for a mortgage, the exemption in this sub paragraph does not apply to such instrument, and
    • any air waybill for any goods, merchandise, or effects to be exported from Fiji.

    Offshore loans shall be exempt from stamp duty, provided the funds are deposited into a bank account in Fiji.