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Income Tax (Budget Amendment) Act 2017

REPUBLIC OF FIJI

INCOME TAX (BUDGET AMENDMENT) ACT 2017

ACT NO. 26 OF 2017

I assent.
J. K. KONROTE
President
[14 July 2017]

AN ACT

TO AMEND THE INCOME TAX ACT 2015

ENACTED by the Parliament of the Republic of Fiji—

Short title and commencement

1.—(1) This Act may be cited as the Income Tax (Budget Amendment) Act 2017.

(2) This Act comes into force on 1 August 2017.

(3) In this Act, the Income Tax Act 2015 is referred to as the "Principal Act".

Section 2 amended

2. Section 2 of the Principal Act is amended in the definition of "Social Responsibility Tax" after "section 8" by inserting ", a portion of which is the Environment and Climate Adaptation Levy payable under Part 4 of the Environment and Climate Adaptation Levy Act 2015".

Section 8 amended

3. Section 8 of the Principal Act is amended after subsection (7) by inserting the following new subsection—

"(8) Notwithstanding subsection (2), Social Responsibility Tax is not payable on the portion of chargeable income derived from a one-off payment or receipt prescribed by regulations.".

Section 10 amended

4. Section 10 of the Principal Act is amended by—

(a) in subsection (1), deleting "a dividend," and substituting "an";
(b) in subsection (2), deleting "dividend,";
(c) in subsection (3)—

• (i) deleting paragraph (a); and
• (ii) in paragraph (e), deleting "dividend,"; and

(d) in subsection (4), deleting "dividend,".

Section 20A deleted

5. The Principal Act is amended by deleting section 20A.

Section 25 amended

6. Section 25(8) of the Principal Act is amended after the seventh row by inserting the following new row—

Section 71 amended

7. Section 71(1) of the Principal Act is amended by—

(a) in paragraph (f), deleting "." and substituting "; and"; and
(b) after paragraph (f), inserting the following new paragraph—

• "(g) the provision of a health insurance cover to an employee who is a Fijian citizen.".

Section 102 amended

8. Section 102 of the Principal Act is amended by—

(a) in subsection (1)—

• (i) in paragraph (a) after ";", inserting "and";
• (ii) in paragraph (b), deleting "; and" and substituting ","; and
• (iii) deleting paragraph (c); and

(b) in subsection (5), deleting the definition of "tax avoidance scheme" and substituting the following—

• ""tax avoidance scheme" means any scheme, whether entered into by a person affected by the scheme or by another person, that directly or indirectly—
  • (a) has tax avoidance as its purpose or effect; or
  • (b) has tax avoidance as one of its purposes or effects, if the tax avoidance purpose or effect is not merely incidental;".

Section 112 amended

9. Section 112 of the Principal Act is amended by—

(a) in the heading, deleting "and dividends";
(b) deleting "(1)"; and
(c) deleting subsection (2).

Section 125 amended

10. Section 125(1) of the Principal Act is amended by—

(a) in paragraph (b)—

• (i) deleting "section 112(1)" and substituting "section 112"; and
• (ii) after ";", inserting "or"; and

(b) in paragraph (c)—

• (i) deleting "section 112(1)" and substituting "section 112"; and
• (ii) in subparagraph (ii), deleting "; or" and substituting "."; and

(c) deleting paragraph (d).

New section 143A inserted

11. The Principal Act is amended by—

(a) after section 143, inserting a new section 143A with the heading "Transitional undistributed profits";
(b) renumbering section 143(7) as section 143A(1);
(c) renumbering section 143(9A) as section 143A(2); and
(d) after section 143A(2), inserting the following new subsections—

• "(3) If any part of the net profit after tax of a company for a tax year prior to 2014 has not been distributed as a dividend prior to 30 June 2017, the company must pay tax on the undistributed amount at the rate of 1% and the tax must be paid on or before 30 September 2017.
• (4) A company who fails to pay tax on or before the due date is liable to a penalty of 75% of the amount of unpaid tax.
• (5) A company who fails to comply with subsection (4) is liable to a penalty of 5% of the amount of unpaid tax for each month of default.
• (6) Any penalty paid by a company under this section must be refunded to a taxpayer to the extent that the tax to which the penalty relates is found not to have been payable.
• (7) For the avoidance of doubt, any payment of tax prior to 30 June 2017 on the dividends distributed from the net profit after tax of a company for a tax year prior to 2014 is not refundable by the Fiji Revenue and Customs Authority."

Passed by the Parliament of the Republic of Fiji this 14th day of July 2017.