Exempt Income Tax on

Agriculture profits

There are various types of tax incentives currently available for businesses engaging in the agricultural sector. It comprises of Commercial Agriculture and Agro-Processing, Small Micro Enterprises (SME’s) and Bio-Fuel Production Incentives.

Apart from being tax free, all items for agricultural purposes are granted duty free concessions. However, the respective tax incentive is subject to specific conditions.

For Commercial Agriculture and Agro-Processing Tax Incentive the income of the taxpayer shall be exempt only if the activity is a new activity approved by Fiji Revenue and Customs Authority (FRCA) and established from January 1, 2015 to December 31, 2018.

The investment threshold and income tax holiday is as follows:

For Small and Medium Enterprises or SME’s, the income shall be exempt from Income Tax only if the annual gross turnover or sales does not exceed $500,000.

For Bio – Fuel Production – the income of the taxpayer shall be exempt for a period of 10 consecutive fiscal/tax years only if the applicant engages in a new activity in processing agricultural commodities into bio-fuels and is approved by FRCA and established from 1st January 2009 to 31st December 2018.

To qualify, the taxpayer must have a minimum capital investment of $1,000,000 and employ 20 or more local employees in each of the 10 years.

Duty free on importation

of agricultural items

There are duty exemptions available on the importation of plant, machinery and equipment for initial establishment of the factory, chemical required for bio-fuel production and all agricultural items.

However, 9% import VAT will still apply on importation of these items which would be refunded to those that register for VAT purpose.

For Commercial Agriculture and Agro-Processing and Bio – Fuel Production incentives, the investor will have to make an application to FRCA to qualify for the incentive.

The application should include a comprehensive background of the project such as the director and shareholder details, statement of assets and liabilities, location and description of the site of the project, details of the business activities, sketch plan of the project, costing and financing details, completion dates, employment details, etc.

For the SME incentive, the investor can claim for the exemption in the income tax return for a fiscal/tax year.

Exempt from stamp duties

SME agriculture

The Minister for Economy had announced for waiver of stamp duty on all instruments or written documents for Small & Micro Enterprises effective from January 1, 2016.

Small & Micro Enterprises under Stamp Duties Act includes any business with an annual gross turnover or sales not exceeding $500,000.

Therefore all SMEs engaged in agricultural activities can qualify for this stamp duty waiver provided that are a bonafide registered business, tax and customs compliant and provide a Statutory Declaration confirming that they have a gross turnover not exceeding $500,000. Copies of financial statements must be attached where applicable.

The policy intention for this incentive is to assist the SME’s. Post assessment audits will be conducted to verify declarations.

Severe penalties will be imposed where taxpayers make false declarations or scheme to evade this tax.

VAT application

On the other hand if a person registers for VAT, they would have to charge VAT on all their sales and at the same time will be able to claim an input claim on all VAT paid in relation to the business and abide by the VAT Decree.

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