Income
Tax in Fiji
Tax in Fiji
Personal Income Tax
Residence Rules:
For tax purposes, an
individual is considered a resident if he/she actually resides in Fiji, or:
individual is considered a resident if he/she actually resides in Fiji, or:
·
whose domicile is in Fiji, unless the
tax authorities are satisfied that his/her permanent place of abode is outside
of Fiji or
whose domicile is in Fiji, unless the
tax authorities are satisfied that his/her permanent place of abode is outside
of Fiji or
·
who has been in Fiji either continuously
or intermittently for more than one-half of the income year, unless the tax
authorities are satisfied that his/her usual place of abode is located outside
of Fiji and that there was no intention to become resident in Fiji.
who has been in Fiji either continuously
or intermittently for more than one-half of the income year, unless the tax
authorities are satisfied that his/her usual place of abode is located outside
of Fiji and that there was no intention to become resident in Fiji.
Compliance Requirements For Tax
Returns In The Fiji Island:
Returns In The Fiji Island:
Residents:
Every person liable to
taxation under the Income Tax Act of Fiji is required to lodge an income tax
return with the tax authorities declaring all sources of income by 31 March of
every year in respect of the income in the immediately preceding year.
taxation under the Income Tax Act of Fiji is required to lodge an income tax
return with the tax authorities declaring all sources of income by 31 March of
every year in respect of the income in the immediately preceding year.
Fiji has a PAYE
(Pay-As-You-Earn) system pursuant to which PAYE tax is deducted at the source
by the employer and remitted to the Inland Revenue. An individual who derives
income from employment or from any other sources is required to file an annual
income tax return based on a calendar year.
(Pay-As-You-Earn) system pursuant to which PAYE tax is deducted at the source
by the employer and remitted to the Inland Revenue. An individual who derives
income from employment or from any other sources is required to file an annual
income tax return based on a calendar year.
An individual who
derives taxable income from sources other than employment is also required to
make provisional tax payments in three equal installments (30 April, 31 August,
and 30 November). The installments are usually based on the previous year’s
income tax assessment.
derives taxable income from sources other than employment is also required to
make provisional tax payments in three equal installments (30 April, 31 August,
and 30 November). The installments are usually based on the previous year’s
income tax assessment.
Under the Tax
Administration Decree of 2009, for late lodgment of income tax returns the
maximum penalty is 20 percent of the amount of tax outstanding under the return
and FJD1.00 per day in any other case. For the late payment of tax there is a
flat rate of 25 percent of the outstanding balance that is charged,
irrespective of the length of the delay.
Administration Decree of 2009, for late lodgment of income tax returns the
maximum penalty is 20 percent of the amount of tax outstanding under the return
and FJD1.00 per day in any other case. For the late payment of tax there is a
flat rate of 25 percent of the outstanding balance that is charged,
irrespective of the length of the delay.
Non-residents:
The compliance
requirements for non-residents are basically the same as that of the residents,
except where the assignee is on a three-year contract in Fiji they need only
declare their Fiji-sourced income. The tax authorities may demand for the
lodgment of the final tax return and settlement of the tax matters before the
departure of the individual from Fiji.
requirements for non-residents are basically the same as that of the residents,
except where the assignee is on a three-year contract in Fiji they need only
declare their Fiji-sourced income. The tax authorities may demand for the
lodgment of the final tax return and settlement of the tax matters before the
departure of the individual from Fiji.
Tax Rate:
|
Chrgeable
Income(FJD) |
Tax Payable(FJD)
|
|
0
– 30,000 |
Nil
|
|
30,001-
50,000 |
18%
of excess over FJD30,000 |
|
50,001
– 270,000 |
FJD3,600
+ 20% of excess over FJD50,000 |
|
270,001
– 300,000 |
FJD47,600
+ 20% of excess over FJD270,000 |
|
300,001
– 350,000 |
FJD53,600
+ 20% of excess over FJD300,000 |
|
350,001
– 400,000 |
FJD63,600
+ 20% of excess over FJD350,000 |
|
400,001
– 450,000 |
FJD73,600
+ 20% of excess over FJD400,000 |
|
450,001
– 500,000 |
FJD83,600
+ 20% of excess over FJD450,000 |
|
500,
001 – 1,000,000 |
FJD93,600
+ 20% of excess over FJD500,000 |
|
1,000,001
+ |
FJD193,600
+ 20% of excess over FJD1,000,000 |
Taxable Income:
There
are three main categories of incomes of individuals, namely:
are three main categories of incomes of individuals, namely:
·
income from employment.
income from employment.
·
income from property.
income from property.
·
income from business/investments.
income from business/investments.
Income from employment:
For
taxpayers that receive income from employment, their total income will include
income from emoluments. This includes:
taxpayers that receive income from employment, their total income will include
income from emoluments. This includes:
·
salary, wages, overtime, bonus,
remuneration.
salary, wages, overtime, bonus,
remuneration.
·
gratuities.
gratuities.
·
the estimated annual total of any quarters or board or residence.
the estimated annual total of any quarters or board or residence.
·
the estimated annual total of any other allowance granted in
respect of employment (in cash).
the estimated annual total of any other allowance granted in
respect of employment (in cash).
·
stipends.
stipends.
·
commission, or other amounts for
services.
commission, or other amounts for
services.
·
directors’ or management fees.
directors’ or management fees.
·
retiring allowances or pension, accruing
in, derived from or received in Fiji.
retiring allowances or pension, accruing
in, derived from or received in Fiji.
All
employment income is subject to PAYE
Final Tax; however, some payments are exempt from tax.
employment income is subject to PAYE
Final Tax; however, some payments are exempt from tax.
An
employee who also receives income from business or share of estate/ partnership
must lodge a business return.
employee who also receives income from business or share of estate/ partnership
must lodge a business return.
Income from property:
This
includes the following:
includes the following:
·
rental/lease income (excluding native
lease), whether derived individually, through a Real Estate Agent or the
government.
rental/lease income (excluding native
lease), whether derived individually, through a Real Estate Agent or the
government.
Income from business/investments:
This
includes the following:
includes the following:
·
interest received from loans/money
lending whether licensed or not.
interest received from loans/money
lending whether licensed or not.
·
dividends received from
shares/investments.
dividends received from
shares/investments.
Corporate Income Tax:
Resident Rules:
A
company is considered to be resident in Fiji if it is incorporated under Fiji
law. Companies incorporated under foreign law are considered to be Fiji
resident if they carry on business in Fiji and have either its practical
management and control in Fiji, or its voting power controlled by resident
shareholders. Non-resident companies are taxed only on their Fiji sourced income.
Resident companies are taxed on their worldwide income.
company is considered to be resident in Fiji if it is incorporated under Fiji
law. Companies incorporated under foreign law are considered to be Fiji
resident if they carry on business in Fiji and have either its practical
management and control in Fiji, or its voting power controlled by resident
shareholders. Non-resident companies are taxed only on their Fiji sourced income.
Resident companies are taxed on their worldwide income.
Tax Rate:
|
Corporate
Entity |
Tax Rate(%)
|
|
Resident/Non-Resident
companies |
20
|
|
Listed
companies in the South Pacific Stock Exchange (SPSE) |
10
|
|
Foreign
companies whose regional/global headquarters are based in Fiji |
17
|
International
Withholding Tax Rates:
Withholding Tax Rates:
Dividends
paid or credited to a non-resident are subject to withholding tax at 15 percent
to the extent that the underlying profits have not been subject to corporate
income tax. Fully qualifying dividends are not subject to withholding tax. The
rate of withholding tax may vary under a tax treaty.
paid or credited to a non-resident are subject to withholding tax at 15 percent
to the extent that the underlying profits have not been subject to corporate
income tax. Fully qualifying dividends are not subject to withholding tax. The
rate of withholding tax may vary under a tax treaty.
Royalty
payments to non-residents are subject to withholding tax at 15 percent. This
rate may vary under a tax treaty. Royalty withholding tax is also applicable to
residents at 15 percent.
payments to non-residents are subject to withholding tax at 15 percent. This
rate may vary under a tax treaty. Royalty withholding tax is also applicable to
residents at 15 percent.
Miscellaneous
payments (such as know-how payments, management payments and professional
services) to nonresidents are subject to withholding tax at 15 percent. This
rate may vary under a tax treaty.
payments (such as know-how payments, management payments and professional
services) to nonresidents are subject to withholding tax at 15 percent. This
rate may vary under a tax treaty.
Interest
payments to non-residents are subject to withholding tax at 10 percent. This
rate may vary under a tax treaty. A separate resident withholding tax regime
exists.
payments to non-residents are subject to withholding tax at 10 percent. This
rate may vary under a tax treaty. A separate resident withholding tax regime
exists.
The
recipient of the payment (or to whom the payment accrues) is liable for the
withholding tax, which is levied at the earlier of payment or crediting of the
dividend, royalty, miscellaneous payment or interest and payable by the end of
the month following payment or crediting. Notwithstanding this, the tax is
payable and recoverable from the person or agent by whom such payment is made
or credited.
recipient of the payment (or to whom the payment accrues) is liable for the
withholding tax, which is levied at the earlier of payment or crediting of the
dividend, royalty, miscellaneous payment or interest and payable by the end of
the month following payment or crediting. Notwithstanding this, the tax is
payable and recoverable from the person or agent by whom such payment is made
or credited.
Dividends and
imputation:
imputation:
Company
tax paid generates qualifying dividend tax credits, which can be attached to
dividends paid. Qualifying dividend tax credits can be used by non-resident
shareholders to reduce non-resident dividend withholding tax on the dividend.
tax paid generates qualifying dividend tax credits, which can be attached to
dividends paid. Qualifying dividend tax credits can be used by non-resident
shareholders to reduce non-resident dividend withholding tax on the dividend.
Dividends
received by resident companies from Fiji incorporated companies are exempt from
income tax.
received by resident companies from Fiji incorporated companies are exempt from
income tax.
Dividends
received by a resident shareholder from companies listed on the South Pacific
Stock Exchange are exempt from income tax.
received by a resident shareholder from companies listed on the South Pacific
Stock Exchange are exempt from income tax.
Dividends
received by resident companies from non-resident subsidiaries are subject to
income tax in Fiji, with foreign tax credits generally allowed for withholding
tax paid in respect of such dividends. The quantum of foreign tax credits
allowed is capped (and a calculation is required). Tax credits are not
recognised in respect of any underlying taxes on the foreign sourced dividend.
received by resident companies from non-resident subsidiaries are subject to
income tax in Fiji, with foreign tax credits generally allowed for withholding
tax paid in respect of such dividends. The quantum of foreign tax credits
allowed is capped (and a calculation is required). Tax credits are not
recognised in respect of any underlying taxes on the foreign sourced dividend.
Capital gains:
Capital
Gains Tax (CGT) is a transactional tax and is payable at a rate of 10 percent
on the capital gain on disposal of certain capital assets. Capital losses are
not recognised for CGT purposes. The historical cost base is applicable for the
purpose of calculating any capital gain or loss.
Gains Tax (CGT) is a transactional tax and is payable at a rate of 10 percent
on the capital gain on disposal of certain capital assets. Capital losses are
not recognised for CGT purposes. The historical cost base is applicable for the
purpose of calculating any capital gain or loss.
Non-residents
are only subject to CGT on Fiji assets as defined in the CGT Decree.
are only subject to CGT on Fiji assets as defined in the CGT Decree.
Tax Losses:
Tax
losses can only be carried forward for a period of 4 years, effective from 1
January 2012. There is no provision for the carry back of tax losses. There is
no provision for the grouping or offset of tax losses. The carry forward of tax
losses has two tests, continuity of ownership and continuity of business.
losses can only be carried forward for a period of 4 years, effective from 1
January 2012. There is no provision for the carry back of tax losses. There is
no provision for the grouping or offset of tax losses. The carry forward of tax
losses has two tests, continuity of ownership and continuity of business.
Company advance
tax:
tax:
Fiji
has a company advance tax regime. Companies are subject to advance tax payments
based on the immediately preceding year’s income tax assessment as follows:
has a company advance tax regime. Companies are subject to advance tax payments
based on the immediately preceding year’s income tax assessment as follows:
·
Due 6 months before balance date : 33.3
percent
Due 6 months before balance date : 33.3
percent
·
Due 3 months before balance date : 33.3
percent
Due 3 months before balance date : 33.3
percent
·
Due by balance date : 33.4 percent
Due by balance date : 33.4 percent
Compliance
requirements:
requirements:
Company
income tax returns are required to be lodged within 3 months following the
balance date. The mandatory filing dates apply unless the company is linked to
a ‘tax agent’ under the Tax Agents Lodgement Programme whereby a deferred
filing date may be approved where the company’s tax affairs are in order.
income tax returns are required to be lodged within 3 months following the
balance date. The mandatory filing dates apply unless the company is linked to
a ‘tax agent’ under the Tax Agents Lodgement Programme whereby a deferred
filing date may be approved where the company’s tax affairs are in order.
————————————————————————————————-
Note:
Information
placed here in above is only for general perception. This may not reflect the
latest status on law and may have changed in recent time. Please seek our
professional opinion before applying the provision. Thanks.
Information
placed here in above is only for general perception. This may not reflect the
latest status on law and may have changed in recent time. Please seek our
professional opinion before applying the provision. Thanks.
