INCOME TAXES ON CORPORATIONS
1. Rates
Income tax is levied on the taxable income of resident corporations at the rate of 35%.
2. Local Income Taxes
None.
3. Capital Gains Taxes
Land sales tax is levied on the profit arising from the sale of
undeveloped land within twelve years of purchase at a graduated rate up to a maximum of 30% where the profit exceeds $9,500 (see item 26).
There are no other capital gains taxes as such, but income tax is levied on a gain resulting from property acquired for the purpose of selling or otherwise disposing of the ownership.
4. Branch Profits Taxes A branch of a foreign corporation is taxed on its Fiji-source income at the rate of 45%, the same as for nonresident corporations.
5. Foreign Tax Reliefs
Fiji residents are taxable on their worldwide income although:
q Relief is given with respect to income derived from countries with which Fiji has entered into double taxation agreements (i.e., Australia, Japan, Korea, Malaysia, New Zealand, and United Kingdom) in accordance with those agreements.
q Income derived from a country with which Fiji has not entered into a double taxation agreement is exempt from tax in Fiji provided that the income is subject to income tax in that other country.
6. Classification of Corporations
Corporations are classified for tax purposes as resident or
nonresident, and as private or public.
A resident corporation is defined as one which is incorporated in Fiji or, if not incorporated in Fiji, carries on business in Fiji and has either its central management and control in Fiji or its voting power controlled by resident shareholders. Resident corporations are liable for tax on incomes sourced both in and outside Fiji at 35% whereas nonresident corporations are taxed only on Fiji-source income
at the rate of 45%.
Whether a corporation is public or private is of importance only where resident corporations are concerned. In broad terms, a public corporation is one whose shares are listed on a recognized stock exchange or is a subsidiary of such a listed corporation. Bonus shares may be issued paid up from a corporation unappropriated profits exempt from tax, but only issues by public corporations (listed on the Suva Stock Exchange) will remain tax-free when the bonus shares are
subsequently sold. In the case of issue by other corporations, proceeds of the sales up to the nominal value of those shares will be treated as dividend income.
The tax legislation also isolates corporations under the control of not more than five persons for whom the deemed distribution provisions apply. These corporations are required to distribute up to 60% of the after-tax trading income including dividends and 100% in the case of investment corporations or where the main business is the provision of
personal services.
7. Payment of Taxes
One-third of a corporation estimated income tax liability for a fiscal year is payable on the last day of the fiscal year, and a further amount to make up the equivalent of two-thirds of the actual tax liability is due within three months of that date. Any balance is due upon issue of a notice of assessment.
INCOME TAXES ON INDIVIDUALS
9. Rates
Income tax is payable on taxable income on a graduated scale of up to 35% on income in excess of $15,000. Taxable income of individuals is arrived at after deducting personal allowances (see below) from total income.
An employee income includes the imputed value of benefits provided by the employer, such as housing, a motor vehicle, electricity, telephone, and school fees. The following is an abbreviated summary of the rates of normal tax payable on taxable income:
Taxable Income
Tax on Percentage
Over Not Over Lower Amount on Excess
$ 5,000 $ 7,000 $ 0 15%
7,000 15,000 300 25
15,000 2,300 35
Salary and wages incomes are subject to tax deductions at source (PAYE). Provisional tax is payable on all other income not subject to tax deductions at source based on the estimated tax payable thereon and is paid in three equal installments in April, August, and November.
Deductions for Individuals. In calculating the taxable income of resident individuals, the following personal allowances may
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