WORLD TRADE
ORGANIZATIONG/SCM/Q3/FJI/7/Suppl.1
30 September 2002
(02-5208)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Replies by FIJI to a Request by the UNITED STATES1
Supplement
The following communication, dated 17 September 2002, has been received from the
Permanent Mission of Fiji.
_______________
Pursuant to Article 27.4 of the Agreement on Subsidies and Countervailing Measures and
with reference to G/SCM/N/74/FJI (5 March 2002), the Government of the Republic of the Fiji
Islands submits herewith the remaining applicable legislation requested by the United States of
America relating to the Short-Term Export Profit Deduction; Export Processing Factories/Export
Processing Zones Scheme.  Please circulate the documents to Members for their information.
                                                     
1 G/SCM/Q3/FJI/6G/SCM/Q3/FJI/7/Suppl.1
Page 2
Fiji Income Tax Act [cap. 201] 1985
EXPORT INCOME DEDUCTION
Section 21B inserted
12. The principal Act is amended by inserting the following new section after section 21A
"Export income deduction ”
21B(1) In determining total income, a deduction for export income shall be allowed  in accordance
with this section.
     (2) The amount of the deduction, representing a percentage of the export income, is set out in the
following Table
TABLE
Year of assessment Percentage of export income to
be deducted
2001 and 20022003 and 2004
2005 and 2006
2007 and 2008
2009 and every year thereafter100%
  75%
  50%
  25%    0%
     (3) For the purposes of this section, "export income" means income derived by a taxpayer from
the business of export goods or services.
     (4) A deduction may not be claimed under this section in respect of income for which a deduction
or rebate is claim or allowed under the Fifth Schedule".G/SCM/Q3/FJI/7/Suppl.1
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[3106] GOVERNMENT OF THE SOVEREIGN DEMOCRATIC REPUBLIC OF FIJI
DECREE No 57
TAX FREE ZONES DECREE 1991
ARRANGEMENT OF SECTIONS
SECTION
PART 1 - PRELIMINARY
1. Short title
2. Acts to be read as one
3. Interpretation
PART II - ESTABLISHMENT OF TAX FREE ZONE
4. Declaration, variation of Tax Free Zone and provision of customs facilities
5. Development, management and control of Tax Free Zone
PART III - LICENSING OF TAX FREE ZONE ACTIVITIES
6. Application of a licence in Tax Free Zone
7. Grant of Tax Free Zone Licence, criteria for grant of licence and diversion of manufactured
goods for sales in Fiji
8. Conditions of operating licence9. Revocation of licence, variation of conditions and transfer
10. Register of operating licences.
PART IV - DUTY AND TAX EXEMPTIONS
11. Duty and tax exemptions for licensed activities in Tax Free Zones.
PART V - CUSTOMS CONTROL AND DISPOSAL OF GOODS IN TAX FREE ZONES
12. Disposal of goods taken into Tax Free Zones
13. Utilisation of exempted goods
PART VI - MISCELLANEOUS
14. Enforcement officer
15. Power to make regulations
16. Offences and penalties
17. Application to Tax Free Factories
18. CommencementG/SCM/Q3/FJI/7/Suppl.1
Page 4
A DEGREE TO PROVIDE FOR THE ESTABLISHMENT, MANAGEMENT,
CONTROL, LICENSING AND REGISTRATION OF
TAX FREE ZONES AND RELATED MATTERS
IN exercise of the powers vested in me as President of the Sovereign Democratic Republic of Fiji and
Commander-in-Chief of the Armed Forces, and acting in accordance with the advice of the Prime
Minister and the Cabinet, I hereby make the following Decree -
PART I - PRELIMINARY
Short title
1. This Decree may be cited as the Tax Free Zones Decree 1991.
Acts to be read as one
2. This Decree shall be read as one with the -
(a) Customs Act and the Customs Tariff Act is so far as it relates to customs and duties;
(b) Income Tax Act in so far as it relates to income tax;(c) Excise Act in so far as it relates to excise; and
(d) The Exchange Control Act in so far as it relates to foreign exchange
Interpretation
3. In this Decree unless the context otherwise requires - "authorised Officer" means any person
appointed under paragraph (c) of Section 8 of this Decree; "company" means a company
resident in Fiji, as defined in the Income Tax Act "duty" means any duty leviable under the
Customs Tariff Act; "enforcement officer" means
(a) any customs officer
(b) an officer of the Ministry of Finance, th e Ministry of Trade and Commerce or the Fiji
Trade and Investment Board designated in writing by his respective Minister as an
enforcement officer for the purpose of this Decree;
 "excise duty" means any duty leviable under the Excise Act;
"export" means to take or cause to take out of Fiji, "Fiji" includes the internal waters of Fiji, the archipelagic waters of Fiji and the
territorial seas of Fiji as defined in the Marine Spaces Act;
"Minister" means the Minister responsible for trade and commerce;
"operating licence" means a licence granted by the Minister under subsection (1) of
Section 7 of this Decree;"tax" means any levy or tax chargeable under the Income Tax Act,
"Tax Free Zone" means any area or building declared to be a Tax Free Zone" means
any area or building declared to be a Tax Free Zone under subsection (1) of Section 4
of this Decree and includes Tax Free Factories approved by the Minister for Finance
prior to the coming into force of this Decree;"Trade" business or manufacture" means any activity, that generates export of goods
or services, which the Minister in concurrence with the Minister for Finance may
authorise any Company licenced under Section 7 to carry on within a Tax Free Zone.G/SCM/Q3/FJI/7/Suppl.1
Page 5
PART II - ESTABLISHMENT OF TAX FREE ZONES
Declaration, variation of Tax Free Zone and provision of customs facilities
4.-(1) The Minister, in concurrence with the Minister of Finance, may at any time declare -
(a) that on or after a specified date any area of land and buildings thereon shall be a Tax
Free Zone,
(b) a variation in the size of the area already declared as a Tax Free Zone under
paragraph (a) of this subsection
    (2) Areas that may be declared Tax Free Zones under subsection (1) of this Section shall include
office and other facilities required for the proper customs supervision of goods entering or
leaving the Zones.
Development, management and control of Tax Free Zones
5-(1) Responsibility for the development , management and control of Tax Free Zones shall vest in
the Minister.
    (2) The Minister, in concurrence with the Minister of Finance, may delegate responsibility for the
development, management, or control of Tax Free Zones to any statutory body, Government
Department or company.
PART III - LICENSING OF TAX FREE ZONE ACTIVITIES
Application for a licence in Tax 'Free Zones.
6. -(1) Any company may apply to the Minister for an operating licence.    (2) Every application under subsection (1) of this Section shall be made in a form as specified in
Schedule 1 to this Decree.
Grant of Tax Free Zone Licence, Criteria for grant of
Licence and diversion of manufactured goods for sales in Fiji
7. (1) The Minister, in concurrence with the Minister of Finance, may grant to any company an
operating licence in a form as specified in Sche dule 2 to this Decree authorising the carrying
on of any trade, business or manufacture in a Tax Free Zone.
    (2) Any company seeking an operating licence for the carrying on of any trade, business or
manufacture in a Tax Free Zone shall be required to -
(a) derive all of its chargeable income from export sales, which may include sales to a
company licensed under subsection (1) of this Section;
(b) generate employment opportunities for the people of Fiji;
(c) enhance, expand and improve the technological and trading capability and capacity of
the economy of Fiji;  andG/SCM/Q3/FJI/7/Suppl.1
Page 6
(d) comply with any other condition deemed by  the Minister to be appropriate under the
circumstances.
    (3) The Minister, in concurrence with the Minister of Finance, may allow any company licensed
under subsection (1) of this Section to divert part of its production for sale within Fijiprovided it is demonstrated that the sale of such goods shall be to the economic benefit of Fiji.
Such goods shall be deemed to have been imported into Fiji and shall become liable for duty
under Schedule 2 of the Customs Tariff Act at the time of removal from a Tax Free Zone.
Conditions of operating licence
8. The Minister may attach to an operating licence certain conditions including conditions in
regard to the following matters -
(a) the date, fixed by the Minister after consultation with the licensee, on or before which
the licensee shall commence the trade, business or manufacture authorised by the
licence;
(b) the revocation of the licence if the licensee should at any time after the grant of the
licence undertake in a Tax Free Zone any trade, business or manufacture not
authorised by the licence;  and
(c) the appointment by the licensee of an authorised officer who shall be an individual
person and who shall be a resident as defined in the Income Tax Act.
Revocation of licence, variation of
conditions and transfer
9 - (1) A licence may be revoked by the Minister -
(a) where there has been a breach of any condition of the licence, or(b) where the licensee is convicted of an offence against the Customs Act
    (2) The Minister shall not revoke an operating licence unless a notice in writing is given
informing the licensee of the intention to revoke  the licence and giving the licensee at least
twenty one days within which the licensee may make representation to the Minister.
    (3) The Minister shall consider any representation made by the licensee and make a decision
whether or not to revoke a licence.  The Minister's decision under this subsection shall be
final and shall not be challenged in any Court.
    (4) The Minister, in concurrence with the Minister of Finance, may
(a) vary at any time the conditions of a licence; and
(b) approve the transfer of a licence to another company fulfilling the requirements set
out at subsection (2) of Section 7.
Register of licences
10-(1) The Minister shall establish and maintain a register of the licences granted under
subsection (1) of Section 7 of this Decree.G/SCM/Q3/FJI/7/Suppl.1
Page 7
    (2) There shall be entered in the register in respect of each licence -
(a) the date of commencement of the licence;
(b) the name, registered address and the authorised officer of the company to which the
licence was granted;  and
(c) the trade, business or manufacture to which the licence relates.
    (3) The register shall be kept in the Ministry of Trade and Commerce in Suva and shall be open
to inspection during such times as the Minister may direct, subject to the payment of a fee often dollars for each inspection.
    (4) Where a licence is transferred by the licensee in accordance with paragraph (b) subsection (4)
of section 9 of this Decree, the Company to which it is transferred shall submit its name, and
registered address and authorised officer for inclusion in the register.
PART IV - DUTY AND TAX EXEMPTIONS
Duty and tax exemptions for licensed activities in Tax Free Zone
11. A license granted by the Minister under subsection (1) of Section 7 shall provide, for a period
of thirteen consecutive fiscal years from the commencement of such a licence, the exemption
of the licensee, in accordance with the Customs Tariff Act, the Excise Act and the Income
Tax Act, from the payment of the following -
(a) duties leviable on the importation or purchase ex bond or excise duty leviable on
purchase ex-excise factory of machinery and equipment (including parts and
materials) insofar as they are required for the establishment and factory operation of
the trade, business or manufacture to be carried out in a Tax Free Zone;
(b) taxes normally leviable under the Income Tax Act in respect of chargeable income of
a company licensed under subsection  (1) of Section 7;
(c) taxes leviable under the Income Tax Act, excepting dividen tax, on dividends derived
by a resident shareholder in companies licensed under subsection (1) of Section 7;
(d) withholding taxes leviable on income under the Income Tax Act:
Provided that where such income is subjected to tax under the laws of the state of that
person, then tax exemption under this paragraph will not apply.
PART V - CUSTOMS CONTROL AND DISPOSAL
OF GOODS IN TAX FREE ZONES
Disposal of goods taken into Tax Free Zones
12- (1) No person shall deal with or otherwise dispose of any goods taken into a Tax Free Zone
except in the manner hereinafter provided.
    (2) Goods in a Tax Free Zone may -G/SCM/Q3/FJI/7/Suppl.1
Page 8
(a) be removed from such Tax Free Zone for export or sent into another Tax Free Zone
either in the original pac or otherwise;  or
(b) be stored, exhibited, processed or manufactured or published other uses in accordance
with the provisions of this Decree;  or
(c) be destroyed or be disposed of as the Comptroller of Customs may direct.
Utilisation of exempted goods
13. Subject to the provisions of section 12 all goods exempted under section  shall be utilised
only in a Tax Free Zone.
PART VI - MISCELLANEOUS
Enforcement officers
113. Enforcement officers shall be responsible for the proper efficient administration and control
of the provisions of this Decree.
Power to make regulations
14. The Minister of Finance may make regulations for the pro administration of this Decree and
shall prescribe the places where and form and manner in which entry of goods under the
Customs Act shall be delivered and customs duties shall be paid.
Offences and penalties
16 -(1) Any person who contravenes any provisions of this Decree or the provisions of any
regulations made in accordance with section 15, shall be guilty of an offence and shall,
notwithstanding the provisions of Section 9 of  this Decree, upon conviction, be liable to a fine
not exceeding three times the value of the goods which are the subject matter of the offence,
or five thousand dollars whichever is the greater; or to imprisonment for a term not exceeding
two years, or to both such fine and term of imprisonment.
    (2) Notwithstanding the provision of subsection (1) of this Section, any article in respect of which
an offence under this Decree may have been committed, together with any vehicle or anything
whatsoever used for conveyance, handling, deposit or concealment of such article or goods is
liable to forfeiture and to be disposed of as the Comptroller of Customs may direct.
Application to Tax Free Factories
17. For the avoidance of doubt, the provisions of this Decree shall be deemed to apply to the
operations of Tax Free Factories approved by the Minister of Finance before thecommencement of this Decree, as if this Decree was in force at the time that Minister's
approval was given to the operation of those Tax Free Factories.G/SCM/Q3/FJI/7/Suppl.1
Page 9
Commencement
19. This Decree shall come into force on the day it is signed.
Made this 4th day of December 1991.
PENAIA K GANILAU
President of the sovereign Democratic
Republic of Fiji and Commander-in-Chief
of the Armed Forces
__________G/SCM/Q3/FJI/7/Suppl.1
Page 10
SCHEDULE 1
[ section 6 (2) ]
Name of Applicant:…………………………………………………………………………
Company's Name:…………………………………………………………………………..
Address of Company:……………………………………………………………………….Nature of Project:……………………………………………………………………………..
Date of Project Approval:……………………………………………………………………
Proposed date of Commencement:………………………………………………………
Name and Address of Authorised Officer:……………………………………………….G/SCM/Q3/FJI/7/Suppl.1
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SCHEDULE 2
[ Section 7 (1) ]
By virtue of the powers vested in me under subsection (1) of Section 7 of the Tax Free Zone Decree,
1991 and in concurrence with the Minister of Finance, I hereby grant an operating licence to
…………………………………………………………………………………………………..
[Company Name, Address, etc]
…………………………………………………………………………………………………..……………………………………………………………………………………………………
to operate the trade, business or manufacture  described below, in the TAX FREE ZONE known
as………………………………………………………………………………..
(Designation of Tax Free Zone)
…………………………………………………………………………………………………….
on the following terms and conditions
…………………………………………………………………………………………………….
…………………………………………………………………………………………………….…………………………………………………………………………………………………….…………………………………………………………………………………………………….
(Description of Trade, Business or Manufacture)
This licence shall remain valid until it is surrendered or revoked.
Dated:………………………………. …………………………………………………
MINISTER OF TRADE & COMMERCEG/SCM/Q3/FJI/7/Suppl.1
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GOVERNMENT OF THE SOVEREIGN DEMOCRATIC REPUBLIC OF FIJI
DECREE NO. 58
INCOME TAX ACT [AMENDMENT (NO 3) DECREE 1991
A DECREE TO AMEND THE INCOME TAX ACT.
IN exercise of the powers vested in me as President of the Sovereign Democratic Republic of Fiji and
Commander-in-Chief of the Armed Forces, and acting in accordance with the advice of the Prime
Minister and the Cabinet, I hereby make the following Decree -
Short title and interpretation
1.-(1) This Decree may be cited as the Income Tax Act (Amendment )(No 3) Decree, 1991    (2) In this Decree the Income Tax Act is referred to as the "principal Act".
Section 17 amended
2. Section 17 of the principal Act is amended by substituting a semi-colon for the full stop at the
end of paragraph (52) and inserting the fo llowing paragraph immediately thereafter:-
"(53) Notwithstanding the provisions of subsection (2) of Section 21 of this Act, any dividend
which has been paid or credited in favour of a resident individual by a company holding an
operating licence granted under the provisions of the Tax Free Zones Decree 1991 out of itsprofits attributable to export earning and that such company qualified for relief in accordance
with the Fifth Schedule of this Act:
Provided that -(i) in the event of sale or disposal by any other means of shares held in such a company
by a resident individual within five years immediately following their acquisitionsuch dividend paid or credited by that company in any year .shall not be exempt from
basic tax and normal tax in the hands of the resident individual shareholder and shall
be assessed for such tax in accordance with subsection (2) of Section 21 of this act
and that such dividend shall be included as total income and apportioned over a
period including the year of sale or di sposal and the immediately preceding two
years.
(ii) Exemption under this paragraph shall not apply on the cancellation or withdrawal of a
company's operating licence within five years of the date the licence was granted and
the resident individual shareholder shall be assessed for tax as prescribed in proviso(I) of this paragraph"
Paragraph 4 of the Fifth Schedule repealed3. Paragraph 4 of the Fifth Schedule to the principal Act is repealed and replaced by the
following paragraph:-
"4. Nature of Trade, Products and Servic es to be Approved and other Requirements:G/SCM/Q3/FJI/7/Suppl.1
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(i) The trade and product which the Minister will approve shall be a product of
manufacturing, processing, or assembly including the provision of services, the
manufacture or produce of deep-sea fishing or of production of minor agricultural
commodities.  Minor agricultural commodities shall be such commodities as the
Minister may approve but will not include sugar or copra but derivatives ofmanufacture from those commodities may be considered by the Minister as
manufactures.
(ii) An approved trade or product may include a product manufactures, processed or
assembled wholly or substantially for export although not directly exported by the
company seeking approval, in which case both the manufacturer and exporter as
separate entities may be eligible for deduction and both entities may seek approval inrespect of the same trade or product"
Paragraph 5 of the Fifth Schedule repealed
4. Paragraph 5 of the Fifth Schedule to the principal Act is repealed and replaced by the
following paragraph:-
"5 Method of Relief:
(i) Subject to paragraph 11, in respect of an approved product, a rebate in respect of the
export profits relating to such approved product for the fiscal year in which approvalis first given and the seven subsequent fiscal years, the full amount of the tax
chargeable on the export profits.
The rebate due for any year of assessment shall be limited to the amount calculated
under this sub-paragraph or the tax payable for that income year, whichever is theless.
(ii) Where a deduction under this Schedule is admissible in addition to an exemption
under the Third schedule the exemption under the Third Schedule shall first be
allowed and a deduction under this Schedule will be applied to any balance of profits
which have not been exempted.  Any apportionment or computation under this
paragraph shall be applied as if the net profit chargeable were the total profits of thetrade.
(iii) Any concession granted under this Schedule prior to the first day of January 1988
shall continue to apply and the rebate, commencing from the year of assessment 1988
shall be computed in accordance with sub-paragraph (I)".
Tax Free Zone - New paragraph 11 of Fifth Schedule
5. The Fifth Schedule to the principal Act is amended by the addition of the following new
paragraph after paragraph 10.
"11. Tax Free Zone:(i) Notwithstanding the other paragraphs of this Schedule where a trade, product or
service is approved in accordance with paragraph 4 and such trade, product or serviceis exported to the extent of ninety-five percent or more of the annual production
thereof by the company, such an enterprise shall be designated as a Tax Free Zone
and shall enjoy relief in accordance with paragraph 5 but so that the full period is
extended to thirteen years commencing from the fiscal year of approval and persistingG/SCM/Q3/FJI/7/Suppl.1
Page 14
for the twelve subsequent fiscal years, pr ovided it continues to meet the ninety-five
percent export criteria:
Provided further that where it is considered appropriate by the Minister the ninety-
five percent export criteria may be reduced in accordance with subsection (3) ofSection 7 of the Tax Free Zones Decree, 1991.
(ii) Any enterprise engaged in re-export to th e extent of ninety-five percent or more of
activities conducted by it may for the purpose of this paragraph be designated as a
Tax Free Zone and enjoy the relief as in sub-paragraph (I).
(iii) Any enterprise engaged in an approved trade or product or service which supplied
ninety-five percent or more of its annual output to a Tax Free Zone may itself be
eligible for designation as a Tax Free Zone under this paragraph".
Commencement
6. This Decree shall come into force on the day it is signed.
Made this 4th day of December 1991.
PENAIA K GANILAU
President of the Sovereign Democratic Republic of Fiji and
Commander-in-Chief of the Armed Forces.
__________