Fiji has introduced a capital gains tax
("CGT") on disposals of capital assets.
The Capital Gains Tax Decree 2011 (Fiji) ("CGT
Decree") comes into force from 1 May 2011 and applies to
capital gains arising on the disposal of capital assets on or after
A person liable for CGT in respect of a capital asset disposal
must file a capital gains tax return ("CGT
Return") within 30 days after the disposal of the
capital asset. The CGT is payable at the same time of filing the
CGT Return.The rate of CGT payable is 10% which is applied against
the capital gain arising on disposal. Non-resident individuals,
companies, trusts and partnerships will be caught under
Fiji's CGT regime if the capital asset being disposed is a
"Fiji Asset" as defined under section 2 of the CGT Decree
("Fiji Asset") unless the capital gain
is "an exempt capital gain" under
section 7 of the CGT Decree.
When does a Disposal of a Capital Asset Occur?
Generally a person makes a disposal at the time the person parts
with the ownership of the asset. For example when the capital asset
is sold, exchanged or transferred.
Computation of the Capital Gain
Broadly, the capital gain made by a person on the disposal of a
capital asset is the consideration received less the cost of the
asset at the time of disposal. A capital loss on another asset
cannot be applied against a capital gain made on another asset:
section 10(2) of the CGT Decree.
We set out below a few CGT scenarios.
Example 1: Capital gain made on disposal of
shares in a company listed on the South Pacific Stock Exchange by a
non resident company ("Company A").
Company A is not subject to CGT. This is an exempt capital gain
under section 7 (1)(c) of the CGT Decree.
Example 2: Capital gain made on the disposal of
shares issued in an unlisted Fiji company where the shares issued
in the unlisted Fiji company are held by a non-resident company
("Company B") .Company B is subject to
CGT under section 6(3) of the CGT Decree. Even though Company B is
a non-resident, CGT is payable because the shares are issued in a
Example 3: Capital gain made on the disposal of
a Fijian holiday house by Company B. Company B is subject to CGT
because the asset satisfies the definition of a Fiji Asset.
Example 4: Capital Gain made on disposal of a
Fiji resident's principal place of residence in Fiji.
Generally, a Fiji resident is not subject to CGT on the disposal
because the capital gain is exempt from CGT under section 7(1)(b)
of the CGT Decree.
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