This incentive is specifically designed to assist construction of new hotels, renovation and refurbishment of existing hotels or integrated tourism development.
Investment allowance of 50% of total capital expenditure is allowed as a deduction.
- Approved hotels shall commence construction of the project within two years from the date the provisional approval was granted.
- Investment Allowance can only be written-off against the income of the hotel business or income from the hotel premises.
- There should not be any shift of tax revenue to other countries.
- The Hotel Investment Incentive Package will be applicable from 1 April, 2020 to 31 December 2022.
Part 2, Income Tax (Hotel Investment Incentives) Regulations 2016
SHORT LIFE INVESTMENT PACKAGE
This incentive is designed to assist new projects relating to the construction of hotels and integrated tourism development.
The income of any approved new hotel will be exempted from tax as follows:
- Capital investment from FJ $250,000 to FJ $1,000,000 for a period of 5 consecutive fiscal years; or
- Capital investments from FJ $1,000,001 to FJ $2,000,000 for a period of 7 consecutive fiscal years; or
- Capital investment from FJ $2,000,001 to FJ $40,000,000 a period of 13 consecutive fiscal years.
- Capital Investment above FJ $40,000,000 a period of 25 consecutive fiscal years.
- Approved companies under the SLIP incentive are eligible for duty concession under Code 244 of the Customs Tariff on all capital goods (including capital equipment, plant & machinery including building materials, furnishings and fittings, room amenities, kitchen and dining room equipment and utensils and specialized water sports equipment) not available in Fiji.
- For capital investments above $250,000 where the construction commences on or after 1 April 2020, the approved project shall be completed within 24 months from the date the provisional approval was granted.
- Short Life Investment Package (SLIP) Incentives is available for retirement facilities, hospital and resorts.
- SLIP incentives is also available for NEW apartments with a minimum capital investment of $7,000,000 provided the length of stay is not more than 6 months.
Extended Short Life Investment Package (SLIP) include renovations and refurbishments of existing hotels or resorts:
- 5 year tax holiday for investments more than $2,000,000. The incentive will be available effective from 1 August 2021 until 31 December 2022. This incentive can be claimed only once.
Part 3, Income Tax (Hotel Investment Incentives) Regulations 2016.
OTHER INCENTIVES FOR THE TOURISM INDUSTRY
Exempt Income – Backpacker Operators
In accordance with Part 9, Income Tax (Exempt Income) Regulations 2016, locally owned backpacker operators are exempt from income tax provided their annual gross turnover is not exceeding FJ$1m.
Hotels and Resorts
In accordance with Code 235 to Part 3 of the Customs Tariff, Hotels and Resorts are eligible for duty concessions for the following:
- Building materials, furnishings and fittings, equipment including front office equipment, room amenities, kitchen and dining room equipment and utensils, which are not manufactured and available in Fiji for goods that have a fiscal duty of more than 10% can qualify at a rate of 5% Fiscal Duty, Free Import Excise and 9% VAT.
- Building materials, furnishings and fittings, equipment including front office equipment, room amenities, kitchen and dining room equipment and utensils, which are not manufactured and available in Fiji for goods that have a fiscal duty of more than 5% can qualify at a rate of 3% Fiscal Duty, Free Import Excise and 9% VAT.
- Heavy plant and machinery for project development work provided such plant and machinery is re-exported after completion of the project at a rate of Free Fiscal Duty, Free Import Excise and 9% VAT.
- Duty free importation for all hotels and resorts will be available from 1 August 2021 until 31 December 2022. 5% ECAL will also be waived on all imports
In accordance with Code 270 to Part 3 of the Customs Tariff, approved companies registered to operate water sports related businesses and other tourism related activities are eligible for duty concession for jet skis at a rate of 5% Fiscal Duty, Free Import Excise and 9% VAT.
Retirement Village Incentives
Effective 1 August2019, the following concessions are available to a company constructing a new retirement village with capital investment of at least FJD 250,000 (effective 1 August 2018; previously FJD $500,000):
Exemption from Corporate income tax for a period of five, seven, or 13 years, depending on the investment level.
Duty-free entry of certain capital equipment, plant, and machinery, upon receiving provisional approval from the Minister.