The Fiji ITA imposes a general tax on the income plus a number of specific taxes. Some of the specific taxes have names, some don’t. As a general proposition, income, or any particular instance of income, will only be subject to tax once. (The Act, in other words, solves the problem of double tax that can result from having both a general tax and specific taxes.) Income classified as exempt (s.20) is exempt for all purposes. It is not subject to the general tax on income and it is not subject to any specific taxes.

The Facts:

X is an engineer and New Zealand national. He is employed by Road Builders (Fiji) Ltd (‘RBco’). The job description requires X to supervise the construction of roadworks undertaken by the company throughout Fiji. X is required to live ‘on-site’.

(Note: X is currently classified as a resident for Fiji tax purposes.)

Below is some more detailed information concerning X’s sources of income for the tax year.

Remuneration Package from employment with RBco

Sign on fee 25,000

Annual salary 100,000

Annual travel allowance 5,000

Standard employer contribution to FNPF 10,000

Free on site housing

Free use of company car after hours

Free meals at company on-site canteen

X also received a bonus of $10,000. This was a voluntary payment by RBco.

Other income

Interest on term deposit with ANZ Suva 1,000

Dividends from Unit Trust of Fiji 6,500

Dividends from Fiji Pte Ltd (a private Fiji co) 3,000

Required:

What tax (if any) will each of the above listed items be subject to?

Create 4 columns as shown below.

Allocate each item to one of the 4 columns.

With each item include in brackets reference to any relevant section/s.

In the case of specific taxes, include reference to the name of the specific tax.

In the case of exempt income, include reference to the Part and paragraph in the regulations.

Income Tax s.8

various specific taxes

FBT Part 4

exempt income

Answer rating: 100% (QA)

Remuneration Package from employment with RBco Sign on fee s8 25000 Annual ... View the full answer