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RBF offers accounts scheme

December 31
12:00 2008

image Written By : SERA JANINE. Effective from today non-residents would be part of an initiative by the interim Government to assist in the country’s balance of payments.
This is after the Reserve Bank of Fiji announced the opening of Foreign Currency Accounts Scheme to non-residents.
“The Scheme offers tax-exemption on interest earned on term deposits held with local banks and deposit taking institutions. Under the Scheme, non-residents can either hold foreign currency denominated deposits or Fiji dollar accounts,” said RBF Governor Savenaca Narube.
“However, on foreign currency deposits, investors with deposits of more than the equivalent of F$300,000 will be eligible for tax exemptions on the interest income.”
However, participants have been encouraged to hold funds in Fiji dollar term deposits as there is no threshold to qualify for tax-free exemption on interest income. Mr Narube said the country as a whole would benefit in some way from this scheme.
“The Scheme is expected not only to benefit participants but also the country in terms of the expected foreign exchange that would be brought in,” he said.
The programme is open to citizens of all countries, including Fiji residents who have emigrated.
For foreign currency accounts, any amount maybe placed in fixed deposit
This is if the source of funds are from external sources in US dollars, Japanese Yen, Euro and Australian and New Zealand and the British pound.
This may include funds from Fiji sources for example, participant’s own funds derived from savings, dividends etc. where exchange control approval has been granted for the purchase of foreign currency.
“Interest income for deposits above F$300,000 will be exempt from local tax, however, participants in the “Foreign Currency Accounts Scheme” must apply to FIRCA for a Certificate of Exemption from income tax,” said Mr Narube.
Participants are required to renew this Certificate annually.
Application for Certificate of Exemption from Resident Interest Witholding Tax” which is available on FIRCA’s website: www.frca.org.fj. The application form is to be submitted together with a copy of the participant’s most recent bank statement of his bank account in Fiji.
In a press release FIRCA stated RIWT would not be deducted at source only if the taxpayer provides a valid certificate of exemption.
However, other conditions remain the same and are consistent with the Income Tax Act.

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