It is a tax deducted from income such as dividend, interest, royalty that are received by either a resident or non-resident.
Categories of income to which it applies
Withholding Tax are tax authorized by Sections 8, 8A, 9, 9A, 10 and 10A of the Income Tax Act in respect of dividend, interest, management fee, miscellaneous, know how payments and royalties.
1. Non-Resident Dividend Withholding Tax (Section 8 Income Tax Act)
The person liable for the tax shall be the person to whom or in whose favour a dividend is declared, paid or credited.
Non-Resident Miscellaneous Withholding Tax (Section 8A Income Tax Act)
Tax is payable in respect of following payments:
Any sum paid or credited for the supply of professional services or other independent activities of similar character.
The person liable for the tax shall be the person to whom or in whose favour the sums mentioned above accrues. The person making the payment is responsible to remit the amount deducted to FRCA every month.
3. Non-Resident Interest Withholding Tax (Section 9 Income Tax Act)
A withholding tax of 10% known as Non-Resident Interest Withholding Tax will apply on any interest accrued in favour of-
4. Resident Interest Withholding Final Tax (Section 9A Income Tax Act)
The person liable for the tax shall be the person; estate, company to whom or in whose favour the interest accrues.
Resident interest withholding tax withheld is a final tax on the amount in respect of which the tax has been withheld and—
5. Dividend Tax (Section 10 Income Tax Act)
The person liable for the tax shall be the person; to whom or in whose favour the dividend accrues.
Royalty Withholding Tax (Section 10A Income Tax Act)
The person liable for the tax shall be the person to whom or in whose favour the royalty or other payment accrues.
Double Tax Agreement country rates
The table below details the withholding tax rate that applies in respect of each of the payments to a party from one of the countries having a double tax agreement with Fiji.
|Country||Royalty||Interest||Dividend *||Management Fee||Know-How|
Dividend withholding tax will only apply to the extent that dividend are distributed out of retained earnings on which no corporate tax has been paid.
Allowing of Tax Credits
In case where tax credit is given the income should be included in the calculation of total income and tax chargeable shall be abated by any withholding tax paid.
Evidence of tax paid should be submitted to substantiate claim. If evidence is lost, a certified copy can be obtained otherwise no credit will be given. Under the Double Tax Agreement (NZ, UK, Japan, Korea, Australia, Malaysia, PNG, Singapore, United Arab Emirates, Qatar and India), member countries do exchange information through the respective competent authority.
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