FijiTax Obligations Detailed

In Fiji, employers have various tax obligations including PAYE, FNPF, and other levies.

PAYE (Pay As You Earn)

Employers must withhold income tax from employee salaries and remit it to the Fiji Revenue & Customs Service (FRCS). The tax-free threshold is FJD 30,000. Above this threshold, resident employees are taxed at 18% and 20% depending on their income bracket, while non-resident employees are taxed at a flat rate of 20% from the first dollar. Employers must register for PAYE within 30 days of hiring their first employee. Monthly filing is required for employers with at least one employee earning above the tax-free threshold. Employers without any employees earning above the threshold can opt for six-monthly filing. Payment and filing deadlines are the last day of the month following the filing period.

FNPF (Fiji National Provident Fund)

FNPF is Fiji's compulsory superannuation scheme. Employers contribute 10% of an employee's gross salary, while employees contribute 8%, totaling 18%. This contribution is mandatory for Fijian citizens, with some exceptions. Expatriate employees can voluntarily join the FNPF. Contributions are due by the last day of each month.

Other Taxes and Levies

• Fringe Benefit Tax (FBT): A 20% tax on non-cash benefits provided to employees (e.g., housing, motor vehicles).
• Statutory Training Tax: Paid to the Fiji National University, calculated as a percentage of salaries and directors' fees, usually due every six months.
• Contractor's Provisional Tax: If a business engages contractors, it must withhold tax at the prescribed rate and remit it to FRCS monthly.

General Employer Responsibilities

Employers must provide payslips detailing all payments and deductions. They also need to ensure compliance with employment laws regarding contracts, working hours, and termination terms. It is crucial for employers to stay updated on tax rates and regulations, as they can change. As of today, February 5, 2025, this information is current, but it is advisable to confirm with the FRCS or a tax professional for the latest updates.

In Fiji, employee tax deductions, known as Pay As You Earn (PAYE), operate as a final tax system for single-source employment income exceeding FJ$30,000.

PAYE Tax System

PAYE is the primary method of income tax collection in Fiji, deducted at the source from employee salaries and wages. As of January 1, 2013, PAYE became a final tax, eliminating the need for annual tax returns for employees with only one source of employment income. The tax is calculated on chargeable income, which is gross income less any applicable allowances.

Tax Rates and Thresholds

The income tax threshold is FJ$30,000. This means that earnings up to this amount are not taxed. For resident employees earning above the threshold, the tax rates are:

• 18%: For the income bracket applicable as of today. More information can be found on the Fiji Revenue & Customs Service website.
• 20%: For the income bracket applicable as of today. More information can be found on the Fiji Revenue & Customs Service website.

Non-resident employees are taxed at a flat rate of 20% on their chargeable income from the first dollar earned.

Employer Responsibilities

Employers are responsible for deducting the correct PAYE amount from each employee's salary/wage and remitting it to the Fiji Revenue & Customs Service (FRCS) by the end of the month following the deduction. Employers must register with the FRCS within 30 days of starting their business and submit monthly Employer Monthly Schedules (EMS), even if no PAYE was deducted.

Employee Responsibilities: Tax Code Declaration

Employees must file a Tax Code Declaration (TCD) with their employer within five working days of starting employment.

• 'P' TCD is filed if the employment is the employee's primary source of income.
• 'S' TCD is used for secondary employment. If an employee doesn't submit a TCD within five days, the employer must deduct tax at a rate of 20%.

Exemptions and Deductions

Certain incomes are exempt from PAYE tax, including:

• Pension Income: Pensions from approved funds, like the Fiji National Provident Fund (FNPF), are exempt.
• Lump Sum Payments: Lump-sum payments (up to FJ$5,000) for changes in service conditions (excluding redundancy) are exempt under specific conditions.
• Redundancy Payments: Up to FJ$15,000 of redundancy payments is exempt, with the remainder taxed at 15%. This requires prior approval from FRCS.
• Dividends: Dividend income from specified sources, including listed companies and Fijian Holdings Unit Trust, is exempt. Other dividend income is exempt only if already taxed at the corporate level.

Previously available allowances (Marital, Child, Elderly, FNPF contributions) are no longer deductible as of January 1, 2013.

Special Tax Situations

• Multiple Employments: Employees with multiple jobs or additional income sources (like business income) must file a tax return, even if their primary employment income is below the threshold. They should use Form B and attach their employment Tax Withholding Certificate.
• Non-Resident Employees: Non-resident employees are taxed differently and should consult the FRCS or a tax advisor for specific details.
• Salary Increments for Civil Servants: Civil servants receiving salary increments might experience a temporary increase in their tax deductions for the first two pay periods. The payroll system will adjust subsequent deductions to ensure accurate annual tax payment according to their new salary.

Tax Incentives for Employers (as of June 28, 2024)

Several tax incentives are available for employers, including:

• 300% tax deduction: For wages paid for work placements, apprenticeships, and part-time workers (extended until December 31, 2025).
• 400% tax deduction: For wages paid to persons with disabilities (extended until December 31, 2025).

It's important to note that tax laws and regulations are subject to change. For the most up-to-date information, consult the Fiji Revenue & Customs Service or a qualified tax professional.

In Fiji, Value Added Tax (VAT) is a consumption tax applied to most goods and services.

VAT Rates

• Standard Rate: 15% (effective from August 1, 2023). This applies to most goods and services not specifically zero-rated or exempt.
• Zero-Rated: 0%. This applies to essential goods and services like basic foodstuffs (e.g., flour, rice, sugar, bread, canned fish, cooking oil, potatoes, onions, garlic), baby milk, powdered and liquid milk, dhal, tea, salt, soap, soap powder, toilet paper, sanitary pads, toothpaste, kerosene, cooking gas, and prescribed medicines. Exports are also zero-rated.
• Exempt: These supplies are not subject to VAT, and businesses providing these can not claim input VAT credits on related expenses. Examples: residential rent, education services provided by educational institutions, gambling services, donations by non-profit organizations, the provision of financial services, and the sale of a business as a going concern.

VAT Registration

• Threshold: Businesses must register for VAT if their annual gross turnover exceeds FJD 100,000 or if they anticipate exceeding this threshold within 12 months.
• Voluntary Registration: Businesses below the threshold can register voluntarily but are then required to remain registered for a minimum period (check current regulations for details).
• Timeframe: Registration must be completed within 21 days of becoming liable. Registration can be done online via the Fiji Revenue & Customs Service (FRCS) website.

VAT Filing and Payment

• Returns: Businesses with an annual turnover below FJD 300,000 file VAT returns annually. Businesses exceeding this threshold file returns monthly.
• Deadline: Monthly returns and payments are due by the last day of the month following the taxable period. Annual returns are due by the end of the fiscal year.
• Method: Filing and payments are typically made online through the FRCS Taxpayer Online Service (TPOS) portal.

Additional Information

Keep in mind that this information is based on the latest available data as of today, February 5, 2025, and might be subject to change. It is crucial to consult with a tax professional or refer to official FRCS resources for the most current and detailed information on VAT regulations in Fiji. The official FRCS website is a valuable resource.

Fiji offers a range of tax incentives designed to stimulate investment and economic growth across various sectors. As of today, February 5, 2025, these incentives are subject to change, and it's crucial to verify current regulations with relevant authorities.

Corporate Tax Rates

• Standard Corporate Tax Rate: The standard corporate tax rate in Fiji is generally 20%. However, specific incentives can lower this rate significantly.
• Reduced Rate for Specific Industries: Some sectors benefit from reduced corporate tax rates. For instance, companies listed on the South Pacific Stock Exchange (SPSE) are subject to a lower corporate tax rate.
• Tax Holidays: Tax holidays are available for certain investments and industries, exempting businesses from paying corporate tax for a specified period. These holidays can range from five to 20 years, depending on the nature and scale of the investment.

Investment Incentives

• Short Life Investment Package (SLIP): This package offers a 10-year tax holiday for capital investments exceeding a specified threshold. It also includes import duty exemptions on capital goods. SLIP incentives are available for investments in sectors such as retirement facilities, hospital resorts, and new apartment developments.
• Tax Deductions for Capital Expenditures: Businesses may be eligible for tax deductions on certain capital expenditures. Examples include:
  • Deductions for investments in research and development, particularly in the ICT and renewable energy sectors.
  • Deductions for the acquisition and refurbishment of existing hotels and resorts.
• Tax-Free Regions (TFRs): Businesses established in designated TFRs may qualify for tax and duty exemptions. These regions include Vanua Levu, Rotuma, Kadavu, Levuka, Lomaiviti, and Lau. Specific investment thresholds and conditions may apply.

Employment Incentives

• Deductions for Wages and Salaries: Businesses can claim deductions on wages and salaries paid to certain categories of employees. These include:
  • Increased deductions for wages paid to employees on work placements, apprenticeships, and part-time workers.
  • Higher deductions for salaries paid to persons with disabilities.
• Tax Deduction for Training: A deduction is available for expenses incurred in training employees, fostering skill development within the workforce.

Sector-Specific Incentives

• Agriculture: The agriculture sector benefits from various tax concessions and duty exemptions on imported goods. These incentives aim to encourage commercial agricultural farming, food security, and the overall development of the agricultural sector.
• Information and Communication Technology (ICT): Incentives for the ICT sector include tax exemptions based on employment levels and export percentages. Start-ups in this sector can also benefit from deductions on start-up costs.
• Audio-Visual Industry: Tax deductions are available for capital expenditure on audio-visual productions.
• Manufacturing: Deductions are available for investments in food processing and forestry, promoting value addition and resource utilization within the manufacturing sector.
• Tourism and Hospitality: The tourism sector benefits from tax holidays for new hotel developments and deductions for renovations and refurbishments of existing properties.
• Renewable Energy: Tax holidays and duty-free import provisions are available for investments in renewable energy projects, supporting sustainable development initiatives.

Other Tax Provisions

• Export Income Deduction (EID): Businesses engaged in exporting can claim a deduction on their export income, further incentivizing export-oriented activities. The EID rate may vary depending on the sector.
• Double Taxation Agreements (DTAs): Fiji has established DTAs with various countries to avoid double taxation for businesses operating internationally.

Application Procedures

The specific application procedures for each incentive may vary. It's essential to contact the Fiji Revenue & Customs Service (FRCS) or relevant government ministries for detailed information and guidance on eligibility criteria, required documentation, and application processes. Professional advice from tax consultants or business advisors can also be beneficial in navigating the incentive landscape and optimizing tax benefits.