Pay Back New India Assurance $1M, Court Orders Customs Services

The Court of Appeal has overturned a ruling by the Tax Court and ordered Fiji Revenue and Customs Services (FRCS) to refund New India Assurance Company Limited a tax of more than $1 million.
Justice Almeida Guneratne, Justice Eric Basnayake and Justice Farzana Jameel ordered that $1,112,261.85 be returned by FRCS.
The Tax Court had earlier ruled on whether local branch profit remittance tax is an additional tax on branch profits paid or credited for remittance.
The branch profile remittance additional normal tax is payable when the profits earned by the branch is sent to the parent company.
The court of appeal ruled that when a branch reinvests profits in term deposits in Fiji that is not a remittance.
“When profits are made in Fiji, those profits, after tax should be free for any other use. Only if the profits are either paid or credited for remittance does it become subject to the 15 per cent additional tax.”
In the case of New India Assurance Company Limited, the Fiji Court of Appeal found that no profits were paid or credited for remittance to their head office.
In addition, FRCS has also been ordered to pay New India Assurance Company Limited $5000 in court costs.
Edited by Naisa Koroi