WORLD TRADE  
ORGANIZATION   
G/SCM/N/243/FJI 
4 October 2012 
 (12-5380) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for 
the Elimination of Export Subsidies Pursuant to the Procedures Contained 
in the General Council Decision in Document WT/L/691 
 
Updating notification 
 
FIJI 
   The following communication, dated 28 September 2012, is being circulated at the request of the Delegation of Fiji. 
 
_______________ 
 
 1.0 In accordance with paragraph 10.6 of the Decision on Implementation-Related Issues and 
Concerns (WT/MIN (01)/17) and written refere nce to document G/SCM/ 39 adopted by the 
Fourth Ministerial Conference, held from 9 to 14 November, 2001 in Doha, Qatar, we would like to 
submit hereunder Fiji's annual updating notification for calendar year 2011 about the programmes for 
which extension is being sought under Article 27.4 of the Agreem ent on Subsidies and Countervailing 
Measures.  
2.0 Please note that the Action Plan required under Paragraph 1(f) of the decision contained in 
WT/L/691 is incorporated into this notificati on under the heading of each of the programmes. 
 
(i) Export Income Deduction  
 
3.0 The objective of the Export Income deduction is  to provide a facilitating mechanism available 
to local producers of exportable commodities for imported inputs (not locally produces).  For the past few years, Fiji's Balance of Payments and Foreign Reserves have been under significant strain due to 
an underperforming export sector and a burgeoning import bill in large due to the fact that Fiji is an 
import dependant country which im ports major products such as petroleum and food.  The price 
variations of these commodities have an impact on the import bill.  This is further exacerbated by the 
weak Fijian currency.  The export income deduction is  a measure to assist in stabilizing Fiji's weak 
Balance of Payment and Foreign Reserve position. In compliance with 1 (f) of WT/L/691, a schedule 
for the elimination of the Export Income Deduction Scheme is given below.  4.0 This year 40 per cent of export profit will be  taxed, and from 2013, all export profits will be 
incrementally taxed until 2016 wher eby export profits will be fully taxed, as per the table provided 
below: G/SCM/N/243/FJI 
Page 2  
 
   
Year of Assessment Percentage of Export Income to be 
Deducted 
2012 40% 
2013 30% 
2014 20% 
2015 10% 
2016 Phased Out 
 
(ii) Export Processing Factories/Expo rt Processing Zone Scheme  
 
5.0 The Government of Fiji had given a clear indicati on in its policy intentions with regard to the 
Tax free Factories/Tax Free Zone Scheme in 2001 Budget.  Essentially, no further approvals have 
been given after 31 December 2000 to companies a pplying to operate under the Scheme, which grants 
a company exporting 70% or more of its products  Fiscal duty, Value-Added tax and Income tax 
exemptions for a period of 13 years.  However, give n that some companies were given approvals prior 
to 31 December 2000, the Scheme is most likel y to cease on 2015 or earlier.  There has been no 
change to this scheme since Fiji's last notification.  
(iii) Film Making and Audio Visual Incentives 
 
6.0 This incentive is currently administered unde r the sixth schedule of the Income Tax Act of 
Fiji.  Under this scheme the following incentives are available: 
 
a) Income Tax Deductions 
 
 150 % deduction for capital expenditure on an F1 audio-visual production 
 125% deduction for capital expenditure on an F2 audio-visual production. 
 
7.0 The levels of Expenditure in Fiji for an audi o-visual production for F1 and F2 status should 
not be less than:  
 40% for a large format film, a feature f ilm or broadcast television programmes; 
 50% for a direct to video programme or video disk programme; and 
 55% for an audio recording. 
 
b) Income Tax Exemption 
 
 Net Income from an F1 production is exempt until taxpayer has received a 60% 
return on capital expended.  Thereafter, net income will be fully taxed at the marginal 
rate. 
 Net Income from an F2 production is exempt until taxpayer has received a 50% 
return on capital expended.  Thereafter, net income will be fully taxed at the marginal 
rate. 
 
8.0 Brief Description of F1 and F2  
 An F1 audio visual production must be w holly or substantially in Fiji and contain 
significant local content. 
 An F2 audio visual production can be obtained if the production entity has secured 
distribution for the production in at least  2 significant international markets and a 
guaranteed minimum return on investment is achieved, etc.  G/SCM/N/243/FJI 
 Page 3 
 
 
  9.0 Studio City Zone Concession 
 
9.1 A licensed audio-visual producer is exempt  from the payment of income tax (except for 
withholding tax) on any income derived from the production activity carried on in the Zone.  
9.2 An approved individual who derives income from work in audio-visual production including 
fees, wages, royalties, profits etc and any income  earned from sports performances including prize 
money, performance fees and endorsements is exempt  from tax. Live broadcast of films made or 
filming carried out in Fiji is zero-rated for Value Added Tax (VAT) purposes.  
10.0 Film Tax Rebates  
 10.1 The current rebate or credit on production cost s spent in Fiji available to audio-visual 
producers is 47% and the maximum allowance government grant is $11.75m.  
 
(Note:  Action Plan:  As has been included in the past notifications, the Film Making and Audio 
Visual Incentives were notified initially under Article 27.4 of the ASCM in error as it refers to a 
programme relating to trade in services which falls outside the scope of the ASCM.  It has nonetheless continued to be notified for the purpose of juridical certainty.  As it does not actually 
fall under the scope of the ASCM, Fiji has no pl ans to terminate the programme and has not 
prepared an action plan.) 
 
  
__________