The Fiji Government engaged external consultants who are
undertaking a review of the Companies Act (Cap.247) (Fj)
and the Registration of Business Names Act (Cap.249) (Fj),
and related laws and regulation recently conducted stakeholder
consultations in Fiji.
We note that the origin of Fiji's company law owes much to
the consolidation of English company law in the Companies Act
1862 (UK). It is from this Act that the companies'
legislation in most Pacific jurisdictions (and in Australia and New
Zealand) is descended. Despite subsequent amending and
consolidating acts many of the fundamental features of the 1862 Act
have survived down to modern times, which makes this much needed
law reform timely.
One of the key changes appears to be the abolition of the
mandatory two shareholder rule in Fiji, which often leaves
Australian corporates with Fiji subsidiaries coming up with
creative ways to structure their Fiji holdings to satisfy this
Now may be a good time to undertake a legal audit so that you
are aware of your current Fiji holdings/structure in order to take
advantage of any transitional period to ensure compliance with the
new companies regime.
Proposed Capital Gains Tax Decree
Unlike Australia, Fiji does not have a specific capital gains
tax regime under its current laws. The Fiji tax authority
(FRCA) relies on section 11(a) which falls under
Part IV Division 1 of the Income Tax Act (Act),
when it seeks to calculate the amounts that are to be included in
arriving at a taxpayer's total assessable income, when a
taxpayer profits from property sales/ or there are speculative
FRCA published a practice note(1) as to how the
Commissioner of Inland Revenue (Commissioner)
intends to interpret the provisions under section 11(a), and then
apply these to an individual taxpayer's circumstances.
The drafting under section 11 of the Act is cumbersome, and it
appears that FRCA is now proposing a stand-along capital gains tax
While no taxpayer likes the imposition of a new tax law, it is
timely that the cumbersome provisions in the Act are replaced with
more modern provisions which reflect the economic realities of a
modern developing nation. Stakeholders have been consulted on the
proposed decree and we look forward to the final document being
1. Fiji Islands Revenue & Customs Application of
Income Tax Act Section 11(a) to Profits from Property Sales
Practice Statement No. 25 (Revised 15/02/08)
Winners of the 2010 Lawyers Weekly e.law Asia Pacific Box
Breaker of the Year Award and the 2009 NSW Exporter of the Year
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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