Business & Self-Employed
As a general rule, deductions are allowed for any expense wholly and exclusively incurred for the purpose of the trade, business, profession, employment or vocation of the taxpayer.
Expenses which are personal and capital in nature are not allowable for taxation purposes when determining a taxpayer’s final chargeable income.
Examples of allowable deductions:
- repairs & maintenance of fixed assets of the business that are not capital in nature.
- legal fees incurred in relation to the recovery of debts.
- parking meter fees rather than parking fines.
- utility bills for the business premises (e.g. electricity, telephone & water).
- entertainment expenses for the purpose of business.
- accounting fees paid to registered tax agents.
- insurance premiums paid as cover for company assets.
- bad debts written off where the taxpayer has exhausted all avenues in recovering the debts.
For example the business expenses for a taxi proprietor would include:
- repair and maintenance of taxis registered under the business name.
- fuel and oil.
- wheel tax and fitness.
- base fees.
- bank interest if taxi is under mortgage, etc.
In addition, Section 21 of the Income Tax Act specifically permits the following deductions:
- depreciation on capital assets and buildings.
- employers’ contributions to an approved fund less any amount that is recovered from the employee in respect of that contribution or half of the eight percent statutory contribution paid by the employer to the Fiji National Provident Fund.
- subject to the Commissioner’s discretion, expenditure incurred on experimentation, scientific research or investigation connected with the taxpayer’s business on prospecting for minerals (including natural gas or oil) in Fiji by a holder of a mining right lease etc. (conditions apply).
- 150% of the amount of any contributions by taxpayers carrying on business in Fiji to the Tourism Fiji previously known as Fiji Visitors Bureau.
- any consideration on the grant of a lease for business purposes or, expenditure incurred under an obligation to effect improvements on land or buildings where the right of use is granted to the tenant who carries out such improvements (conditions apply).
- any deduction authorised under the Hotels Aid Act.
- donations to approved charities – any amount paid up to a maximum of FJ$100,000.
- 150% of the amount of salaries and wages paid to a new employee between 1 January 1997 and 31st December, 20018 (conditions apply).
- subject to section 21D, an amount, not exceeding FJ$1,000 , being the value of discount included in total income under section 11A in respect of shares or options acquired in a qualifying employee share scheme.
- 150% income tax deduction for stock exchange listing costs.
- 150% income tax deduction for direct capital expenditure in rural banking program by commercial banks.
- 150% income tax deduction for contributions to the Fiji Heritage Foundation.
- the amount spent in investment or re-investment by a taxpayer engaged in value adding processes using at least 50% of local materials in food processing, agriculture processing, fisheries or forestry business.
- 40% of capital expenditure incurred by any existing businesses located in Vanua Levu excluding those businesses under the twelfth schedule (conditions apply)
- 200% the amount of any cash donation exceeding $1000 made by any taxpayer between the periods 22nd December 2012 and 31st March, 2013 by depositing into the Prime Minister‘s Disaster Rehabilitation Fund, Bank of the South Pacific Bank Account.
- 200% the amount of the cost of new computers, laptops and tablets donated to rural schools registered with the Ministry of Education (conditions apply)
- 150% the amount of the cost of new computers, laptops and tablets donated to urban schools registered with the Ministry of Education (conditions apply)
- 150% the amount of cash donation with a minimum of $10,000 and a maximum of $100,000, made by any business towards the Disaster Rehabilitation Fund
- 150% the cash sponsorship exceeding $100,000 and not exceeding $200,000, made by a company towards the hiring of international sporting coaches
- 150% the amount of cash donation not exceeding $50,000 made by a business towards any approved housing project by the Government, for squatters
- 150% times the amount of cash donation exceeding $50,000 made by a business to a Sports Fund [as approved by the Commissioner of Inland Revenue] for the purposes of sports development in the Fiji
Allowable deductions for taxation purposes also include income from pension, cash donation to Approved Charities/Organisations, dividend (except Fijian Holdings Unit Trust as from 1st January, 2007) and redundancy payments approved by FRCA, etc.
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