In the case of change of more than 50% in the underlying ownership of a company, any loss incurred in a tax year before the change, is allowed to be carried forward in the tax year after the change, provided the following conditions are fulfilled:
- The company carries on the same business after the change as it carried on before the change until the earlier loss has been fully deducted or the period for carrying forward such loss has expired; and
- Company does not, until the earlier loss has been fully deducted or the period for carrying the loss forward has expired, engage in any new business or investment after the change if the principal purpose of the company is to utilise the loss to reduce the income tax payable on the amounts derived from the new business or investment.
Any income, including capital gains derived by a resident from the sale of shares of private and public companies on reorganisation, restructure, or amalgamation for the purposes of listing or as a part of the listing process on the South Pacific Stock Exchange is exempt from tax. However, the private company is required to be listed on the South Pacific Stock Exchange within 24 months from the date of commencement of reorganisation, restructure or amalgamation. If the private company is not listed on the South Pacific Stock Exchange as mentioned above, the gain from the re-organisation, restructure or amalgamation of the private company is subject to tax under the tax laws of Fiji.
Transfer of shares due to corporate reorganization is not taxable under capital gains tax, subject to certain conditions.
A company is a group company in relation to another company if:
- The company owns, directly or through one or more interposed persons, 100% of the issued shares in the other company; or
- Another company owns, directly or through one or more interposed persons, 100% of the issued shares in both companies.
Effective 1 August 2021, the scope of the re-organization rules under the Income Tax Act, 2015 is extended to cover partnership structures and the definition of group companies is expanded to include the transfer of assets between companies that have common shareholders.