FijiTax Guide

2013

PKF Worldwide Tax Guide 2013 I

Fore

wor

d

foreword

A country’s tax regime is always a key factor for any business considering moving into new markets. What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double tax treaties in place? How will foreign source income be taxed?

Since 1994, the PKF network of independent member firms, administered by PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses with the answers to these key tax questions. This handy reference guide provides clients and professional practitioners with comprehensive tax and business information for over 90 countries throughout the world.

As you will appreciate, the production of the WWTG is a huge team effort and I would like to thank all tax experts within PFK member firms who gave up their time to contribute the vital information on their country’s taxes that forms the heart of this publication.

I hope that the combination of the WWTG and assistance from your local PKF member firm will provide you with the advice you need to make the right decisions for your international business.

Richard SackinChairman, PKF International Tax CommitteeEisner Amper LLP richard.sackin@eisneramper.com

PKF Worldwide Tax Guide 2013II

Disclaimer

important disclaimer

This publication should not be regarded as offering a complete explanation of the taxation matters that are contained within this publication.This publication has been sold or distributed on the express terms and understanding that the publishers and the authors are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication, nor for any error in, or omission from, this publication.

The publishers and the authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication.

Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.

PKF International is a network of legally independent member firms administered by PKF International Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility or liability for the actions or inactions on the part of any individual member firm or firms.

PKF Worldwide Tax Guide 2013 III

Pref

ace

preface

The PKF Worldwide Tax Guide 2013 (WWTG) is an annual publication that provides an overview of the taxation and business regulation regimes of the world’s most significant trading countries. In compiling this publication, member firms of the PKF network have based their summaries on information current on 1 January 2013, while also noting imminent changes where necessary.

On a country-by-country basis, each summary addresses the major taxes applicable to business; how taxable income is determined; sundry other related taxation and business issues; and the country’s personal tax regime. The final section of each country summary sets out the Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments.

While the WWTG should not to be regarded as offering a complete explanation of the taxation issues in each country, we hope readers will use the publication as their first point of reference and then use the services of their local PKF member firm to provide specific information and advice.

In addition to the printed version of the WWTG, individual country taxation guides are available in PDF format which can be downloaded from the PKF website at www.pkf.com

PKF INTERNATIONAL LIMITEDMAY 2013

©PKF INTERNATIONAL LIMITEDALL RIGHTS RESERVEDUSE APPROVED WITH ATTRIBUTION

PKF Worldwide Tax Guide 2013IV

Introduction

about pKf international limited

PKF International Limited (PKFI) administers the PKF network of legally independent member firms. There are around 300 member firms and correspondents in 440 locations in around 125 countries providing accounting and business advisory services. PKFI member firms employ around 2,270 partners and more than 22,000 staff.PKFI is the 11th largest global accountancy network and its member firms have $2.68 billion aggregate fee income (year end June 2012). The network is a member of the Forum of Firms, an organisation dedicated to consistent and high quality standards of financial reporting and auditing practices worldwide.

Services provided by member firms include:

Assurance & AdvisoryInsolvency – Corporate & PersonalFinancial Planning/Wealth managementTaxationCorporate FinanceForensic AccountingManagement ConsultancyHotel ConsultancyIT Consultancy

PKF member firms are organised into five geographical regions covering Africa; Latin America; Asia Pacific; Europe, the Middle East & India (EMEI); and North America & the Caribbean. Each region elects representatives to the board of PKF International Limited which administers the network. While the member firms remain separate and independent, international tax, corporate finance, professional standards, audit, hotel consultancy and business development committees work together to improve quality standards, develop initiatives and share knowledge and best practice cross the network.

Please visit www.pkf.com for more information.

PKF Worldwide Tax Guide 2013 V

Stru

ctur

e

structure of country descriptions

a. taXes payable

FEDERAL TAXES AND LEVIES COMPANY TAX CAPITAL GAINS TAX BRANCH PROFITS TAX SALES TAX/VALUE ADDED TAX FRINGE BENEFITS TAX LOCAL TAXES OTHER TAXES

b. determination of taXable income

CAPITAL ALLOWANCES DEPRECIATION STOCK/INVENTORY CAPITAL GAINS AND LOSSES DIVIDENDS INTEREST DEDUCTIONS LOSSES FOREIGN SOURCED INCOME INCENTIVES

c. foreiGn taX relief

d. corporate Groups

e. related party transactions

f. witHHoldinG taX

G. eXcHanGe control

H. personal taX

i. treaty and non-treaty witHHoldinG taX rates

PKF Worldwide Tax Guide 2013VI

Time Zones

AAlgeria . . . . . . . . . . . . . . . . . . . .1 pmAngola . . . . . . . . . . . . . . . . . . . .1 pmArgentina . . . . . . . . . . . . . . . . . .9 amAustralia - Melbourne . . . . . . . . . . . . .10 pm Sydney . . . . . . . . . . . . . . .10 pm Adelaide . . . . . . . . . . . . 9.30 pm Perth . . . . . . . . . . . . . . . . . .8 pmAustria . . . . . . . . . . . . . . . . . . . .1 pm

BBahamas . . . . . . . . . . . . . . . . . . .7 amBahrain . . . . . . . . . . . . . . . . . . . .3 pmBelgium . . . . . . . . . . . . . . . . . . . .1 pmBelize . . . . . . . . . . . . . . . . . . . . .6 amBermuda . . . . . . . . . . . . . . . . . . .8 amBrazil. . . . . . . . . . . . . . . . . . . . . .7 amBritish Virgin Islands . . . . . . . . . . .8 am

CCanada - Toronto . . . . . . . . . . . . . . . .7 am Winnipeg . . . . . . . . . . . . . . .6 am Calgary . . . . . . . . . . . . . . . .5 am Vancouver . . . . . . . . . . . . . .4 amCayman Islands . . . . . . . . . . . . . .7 amChile . . . . . . . . . . . . . . . . . . . . . .8 amChina - Beijing . . . . . . . . . . . . . .10 pmColombia . . . . . . . . . . . . . . . . . . .7 amCyprus . . . . . . . . . . . . . . . . . . . .2 pmCzech Republic . . . . . . . . . . . . . .1 pm

DDenmark . . . . . . . . . . . . . . . . . . .1 pmDominican Republic . . . . . . . . . . .7 am

EEcuador . . . . . . . . . . . . . . . . . . . .7 amEgypt . . . . . . . . . . . . . . . . . . . . .2 pmEl Salvador . . . . . . . . . . . . . . . . .6 amEstonia . . . . . . . . . . . . . . . . . . . .2 pm

FFiji . . . . . . . . . . . . . . . . .12 midnightFinland . . . . . . . . . . . . . . . . . . . .2 pmFrance. . . . . . . . . . . . . . . . . . . . .1 pm

GGambia (The) . . . . . . . . . . . . . 12 noonGermany . . . . . . . . . . . . . . . . . . .1 pmGhana . . . . . . . . . . . . . . . . . . 12 noonGreece . . . . . . . . . . . . . . . . . . . .2 pmGrenada . . . . . . . . . . . . . . . . . . .8 amGuatemala . . . . . . . . . . . . . . . . . .6 am

Guernsey . . . . . . . . . . . . . . . . 12 noonGuyana . . . . . . . . . . . . . . . . . . . .7 am

HHong Kong . . . . . . . . . . . . . . . . .8 pmHungary . . . . . . . . . . . . . . . . . . .1 pm

IIndia . . . . . . . . . . . . . . . . . . . 5.30 pmIndonesia. . . . . . . . . . . . . . . . . . .7 pmIreland . . . . . . . . . . . . . . . . . . 12 noonIsle of Man . . . . . . . . . . . . . . 12 noonIsrael . . . . . . . . . . . . . . . . . . . . . .2 pmItaly . . . . . . . . . . . . . . . . . . . . . .1 pm

JJamaica . . . . . . . . . . . . . . . . . . .7 amJapan . . . . . . . . . . . . . . . . . . . . .9 pmJordan . . . . . . . . . . . . . . . . . . . .2 pm

KKenya . . . . . . . . . . . . . . . . . . . . .3 pm

LLatvia . . . . . . . . . . . . . . . . . . . . .2 pmLebanon . . . . . . . . . . . . . . . . . . .2 pmLuxembourg . . . . . . . . . . . . . . . .1 pm

MMalaysia . . . . . . . . . . . . . . . . . . .8 pmMalta . . . . . . . . . . . . . . . . . . . . .1 pmMexico . . . . . . . . . . . . . . . . . . . .6 amMorocco . . . . . . . . . . . . . . . . 12 noon

NNamibia. . . . . . . . . . . . . . . . . . . .2 pmNetherlands (The) . . . . . . . . . . . . .1 pmNew Zealand . . . . . . . . . . .12 midnightNigeria . . . . . . . . . . . . . . . . . . . .1 pmNorway . . . . . . . . . . . . . . . . . . . .1 pm

OOman . . . . . . . . . . . . . . . . . . . . .4 pm

PPanama. . . . . . . . . . . . . . . . . . . .7 amPapua New Guinea. . . . . . . . . . .10 pmPeru . . . . . . . . . . . . . . . . . . . . . .7 amPhilippines . . . . . . . . . . . . . . . . . .8 pmPoland. . . . . . . . . . . . . . . . . . . . .1 pmPortugal . . . . . . . . . . . . . . . . . . .1 pmQQatar. . . . . . . . . . . . . . . . . . . . . .8 am

RRomania . . . . . . . . . . . . . . . . . . .2 pm

international time Zones

AT 12 NOON, GREENwICH MEAN TIME, THE STANDARD TIME ELSEwHERE IS:

PKF Worldwide Tax Guide 2013 VII

Tim

e Zo

nes

Russia - Moscow . . . . . . . . . . . . . . .3 pm St Petersburg . . . . . . . . . . . .3 pm

SSingapore . . . . . . . . . . . . . . . . . .7 pmSlovak Republic . . . . . . . . . . . . . .1 pmSlovenia . . . . . . . . . . . . . . . . . . .1 pmSouth Africa . . . . . . . . . . . . . . . . .2 pmSpain . . . . . . . . . . . . . . . . . . . . .1 pmSweden . . . . . . . . . . . . . . . . . . . .1 pmSwitzerland . . . . . . . . . . . . . . . . .1 pm

TTaiwan . . . . . . . . . . . . . . . . . . . .8 pmThailand . . . . . . . . . . . . . . . . . . .8 pmTunisia . . . . . . . . . . . . . . . . . 12 noonTurkey . . . . . . . . . . . . . . . . . . . . .2 pmTurks and Caicos Islands . . . . . . .7 am

UUganda . . . . . . . . . . . . . . . . . . . .3 pmUkraine . . . . . . . . . . . . . . . . . . . .2 pmUnited Arab Emirates . . . . . . . . . .4 pmUnited Kingdom . . . . . . .(GMT) 12 noonUnited States of America - New York City . . . . . . . . . . . .7 am Washington, D.C. . . . . . . . . .7 am Chicago . . . . . . . . . . . . . . . .6 am Houston . . . . . . . . . . . . . . . .6 am Denver . . . . . . . . . . . . . . . .5 am Los Angeles . . . . . . . . . . . . .4 am San Francisco . . . . . . . . . . .4 amUruguay . . . . . . . . . . . . . . . . . . .9 am

VVenezuela . . . . . . . . . . . . . . . . . .8 am

ZZimbabwe . . . . . . . . . . . . . . . . . .2 pm

PKF Worldwide Tax Guide 2013 1

fiji

Currency: Fiji Dollar Dial Code To: 679 Dial Code Out: 00

Member Firm:City: Name: Contact Information:Suva Pradeep Patel 331 4300/ 331 4617 ppatel@pkf.com.fj

a. taXes payable

NATIONAL TAxES AND LEVIESCOMPANy TAxCompany tax is payable by Fiji resident companies on taxable income derived from all sources. Non-resident companies are required to pay the tax on income sourced in Fiji.

Resident companies are those that are incorporated in Fiji or carry on business in Fiji and have either practical management and control in Fiji or voting power controlled by shareholders who are Fijian residents.

The resident company tax rate is 20% for all companies. This is effective for the tax year 2012 and thereafter. The tax rate of 20% is also applicable to branches of foreign companies and insurance companies.

With effect from 1 January 2013, the corporate tax rate is 18.5% for newly listed companies on the South Pacific Stock Exchange provided that the company has 40% local shareholding structure and 17% for foreign companies that establish their headquarters in Fiji.

The tax year usually runs from 1 January to 31 December although alternative fiscal years are permitted.

A company is required to make advance company tax payments in four instalments. Three instalments of 30% of estimated tax liability each are required to be paid by the last day of the 6th, 9th and 12th month of the fiscal year, and the balance by last day of the 2nd month following the end of the fiscal year.

CAPITAL GAINS TAxA Capital Gains Tax (CGT) regime was introduced from 1 May 2011 and CGT is charged at the rate of 10%. However, where a capital asset was bought for the sole purpose of resale or as part of a profit-making scheme, any profits or gains are treated as taxable company income and subject to income tax at the corporate tax rate. BRANCH PROFITS TAxWhere a branch of a foreign company operates in Fiji, the profits of the branch are subject to Fiji corporate tax at the following rates:

Non-resident shipping companies 2%

Other non-resident companies carrying on business in Fiji(e.g. branch profits) 20%

Foreign Companies with Headquarters in Fiji 17%

SALES TAx/VALUE ADDED TAx (VAT)There is no sales tax in Fiji although there is excise duty payable by manufacturers on sales of certain products such as alcohol, tobacco and carbonated drinks.

VAT is charged at a rate of 15% on most goods and services in Fiji; the exceptions being certain exempt items such as financial services, residential dwellings, educational services and certain zero-rated items such as goods and services exported and certain basic food items.

SERVICE TURNOVER TAxService Turnover Tax is charged at the rate of 5% and is applicable on hotel turnover and a wide range of tourism-related services and recreational activities.

FRINGE BENEFITS TAxFringe Benefits Tax (FBT) was introduced with effect from 1 January 2012 at a rate of 20%.

FBT is payable on the value of in-kind or non-cash benefits that the employer or associate of the employer provides to their employees. FBT is payable by the employer or the associate of the employer.

Fiji

PKF Worldwide Tax Guide 20132

FBT is calculated at the rate of 20% on a “gross-up value basis”. The FBT regime outlines special valuation rules for all categories of fringe benefits.

The FBT regime provides a number of fringe benefits that are subject to FBT including debt waiver, household personnel, housing, loan, meals or refreshments, motor vehicles, private expenditure, property and residual fringe benefits.

STAMP DUTyStamp duty is imposed on transfers of shares, transfers of properties, agreements, mortgages, partnership agreements, short term insurance policies, etc.

OTHER TAxESThese include import customs duty, import excise duty and excise duty on certain manufactured products (alcohol, tobacco).

b. determination of taXable income

Taxable income of a company is determined by ascertaining assessable income less allowable deductions. Generally, expenditure and/or losses are deductible provided they are incurred in gaining or producing assessable income. Items of a capital or domestic nature are non-deductible.

DEPRECIATIONAssets are subject to broad banded depreciation rates from 2.5% to 50%. The effective life of the asset is used to determine the depreciation rate. A loading of 20% can be applied to the broad banded rates. New buildings constructed before 31 December 2014 qualify for an accelerated depreciation allowance at the rate of 20%. A tax deduction at the rate of 100% is available by way of accelerated depreciation for new plant and machinery used for manufacturing purposes.

STOCKS/INVENTORyTrading stock on hand at the beginning and the end of each income year must be taken into account in determining assessable income. The closing value adopted becomes the opening value at the beginning of the following year. The taxpayer has the option to value stock at cost or the lower of cost or net realisable value. Valuation methods include FIFO and average cost.

INTEREST DEDUCTIONSInterest is deductible where it is incurred in gaining or producing assessable income.

HEAD OFFICE ExPENSESDeductions for head office charges or similar payments are restricted to 3% of total gross Fiji Income.

TAx LOSSESTax losses are allowed to be carried forward for four years provided there is continuity of at least 51% ownership or there is no substantial change in the nature of the business.

For hotels, losses resulting from allowances and deductions under the Eleventh Schedule of the Income Tax Act are allowed to be carried forward for eight years.

Loss carry-back and inter-group company transfers are not permitted.

FOREIGN SOURCED INCOMEResident corporations are taxed on their worldwide income. Income derived from a treaty country is taxed in Fiji, subject to treaty provisions.

INCENTIVESSpecific deductions and concessions are available for certain industries and business sectors such as mining, hotel and tourism-related industries, film making and audio-visual industries, ICT, manufacturing, fisheries, agriculture, food processing, dairy and forestry.

An income tax exemption is available to certain small and micro enterprises with turnover of less than $300,000.

There are generous income tax and other incentives available to various industries which include an income tax exemption for seven to 20 years. There are also special depreciation allowance and duty concessions available to approved major hotel developments.

Fiji

PKF Worldwide Tax Guide 2013 3

An accelerated write-off at the rate of 20% on construction of new buildings is available until 31 December 2014 subject to certain requirements.

A 100% tax deduction is available by way of accelerated depreciation for new plant and machinery used for manufacturing purposes.

Generous income tax and other incentives including a tax holiday period are available for the ICT industry. Furthermore, an attractive tax incentive package is available for qualifying industries established on the island of Vanua Levu and other remote islands.

Profits from qualifying exports are eligible for certain exemptions from income tax.

c. foreiGn taX relief

A credit is allowed for tax paid in another country on foreign income, limited to the lesser of the Fiji or overseas tax payable on such income.

d. corporate Groups

Group taxation is not permitted.

e. related party transactions

All related party transactions are required to be undertaken for arm’s-length (market) consideration. Fiji has specific transfer pricing provisions and anti-avoidance provisions within the Income Tax Act. Fiji also has comprehensive Transfer Pricing Regulations.

f. witHHoldinG taX

Non-resident withholding tax is deducted from interest, dividends, management fees, know-how fees and royalties paid to non-residents. Withholding tax is levied subject to tax treaty provisions.

Dividend withholding tax is not payable to the extent such dividends are paid out of tax-paid company profits.

G. eXcHanGe control

Overseas remittances in and out of Fiji, including repatriation of capital and remittance of profits, dividends, interest and loan repayments, generally require prior approval of the Reserve Bank of Fiji.

Currently, there are certain restrictions on repatriation of capital and remittance of profits and dividends. Non-resident controlled entities are subject to certain borrowing restrictions.

H. personal taX

Income tax is payable by Fijian residents on their worldwide income. Non-resident individuals pay tax on Fiji-sourced income only. Residence is determined with reference to domicile, place of fixed abode and length of time spent in Fiji.

Income tax is payable on assessable income less allowable deductions. Assessable income includes employment income, business income, rents, interest and dividends.

Deductions are allowable for expenditure incurred in earning assessable income (self-employed income/business profits) with limited deductions against employment income.

Employment-related earnings have tax deductions at source. Self-employed individuals and those with non-salary/wage income are required to pay provisional tax in three instalments based on the previous year’s tax liability.

Commencing from 1 January 2013, employment income will be subject to Pay As You Earn (PAYE) as final tax. Employees with only employment income in 2013 and thereafter will no longer be required to lodge a tax return with certain exceptions. Employers need to ensure that correct PAYE has been deducted and remitted to FRCA on a monthly basis.

The individual tax rates for the year ending 31 December 2013 are as follows.

RESIDENT INDIVIDUALS The resident individual income tax and Social Responsibility Tax (SRT) structure is as follows:

Fiji

PKF Worldwide Tax Guide 20134

Chargeable income

($)

Income Tax Payable

($)

Social Responsibility Tax (Refer Note)

0 - 16,000 Nil Nil

16,001 - 22,000 7% of excess over $16,000 Nil

22,001- 50,000 420 +18% of excess over $22,000

Nil

50,001 - 270,000 5,460 +20% of excess over $50,000

Nil

270,001 - 300,000 49,460 + 20% of excess over $270,000

23% of excess over $270,000

300,001 - 350,000 55,460 +20% of excess over $300,000

6,900 + 24% of excess over $300,000

350,001 - 400,000 65,460 + 20% of excess over $350,000

18,900 + 25% of excess over $350,000

400,001 - 450,000 75,460 + 20% of excess over $400,000

31,400 + 26% of excess over $400,000

450,001 - 500,000 85,460 + 20% of excess over $450,000

44,400 + 27% of excess over $450,000

500, 001 - 1,000,000 95,460 + 20% of excess over $500,000

57,900 + 28% of excess over $500,000

1,000,001 + 195,460 + 20% of excess over $1,000,000

197,900 + 29% of excess over $1,000,000

Note: SRT is in addition to income tax at the rate applicable to the respective income band.

NON-RESIDENT INDIVIDUALS The non-resident individual income tax and Social Responsibility Tax (SRT) structure is as follows:

Chargeable income

($)

Income Tax Payable

($)

Social Responsibility Tax (Refer Note)

0 - 16,000 20% of excess of $0 Nil

16,001- 22,000 3,200 + 20% of excess over $16,000

Nil

22,001- 50,000 4,400 + 20% of excess over $22,000

Nil

50,001 - 270,000 10,000 + 20% of excess over $50,000

Nil

270,001 - 300,000 54,000 +20% of excess over $270,000

23% of excess over $270,000

300,001 - 350,000 60,000 + 20% of excess over $300,000

6,900 + 24% of excess over $300,000

350,001 - 400,000 70,000 + 20% of excess over $350,000

18,900 + 25% of excess over $350,000

400,001 - 450,000 80,000 + 20% of excess over $400,000

31,400 + 26% of excess over $400,000

450,001 - 500,000 90,000 + 20% of excess over $450,000

44,400 + 27% of excess over $450,000

500, 001 - 1,000,000 100,000 + 20% of excess over $500,000

57,900 + 28% of excess over $500,000

1,000,001 + 200,000 + 20% of excess over $1,000,000

197,900 + 29% of excess over $1,000,000

Note: SRT is in addition to income tax at the rate applicable to the respective income band

Fiji

PKF Worldwide Tax Guide 2013 5

i. treaty and non-treaty witHHoldinG taXes

Dividends (%)

Interest (%)

Royalties (%)

Know-how, management charges and

others(%)

Non resident corporations and individuals:

Non-Treaty Countries: 15 10 15 15

Treaty Countries:

Australia 20 10 15 15

Japan 15 10 15 15

Korea, Republic of 10-15 10 10 15

Malaysia 15 15 15 15

New Zealand 15 10 15 15

Papua New Guinea 17 10 15 15

Singapore 5-15 10 10 15

United Kingdom 15 10 15 15

Dividend withholding tax is not payable to the extent that such dividend is paid out of tax-paid company profits.

Withholding tax is levied subject to tax treaty provision.

Fiji

www.pkf.com