The Fiji Revenue and Customs Authority subsequently issued draft transfer pricing guidelines. In recent weeks, the tax authority has been seeking feedback from stakeholders on the proposed transfer pricing regime.
Transfer pricing guidelines
The Fiji transfer pricing regime follows the arm’s length standard pursuant to the OECD’s 2010 Transfer Pricing Guidelines.
Fiji’s draft transfer pricing guidelines apply to both branches and subsidiaries, and provide that “[t]he changes have significant implications for those businesses which typically use branch structures e.g. banks and insurance companies.”
The draft guidelines clearly indicate that it is the Fijian taxpayer’s responsibility to determine that subject transactions are consistent with the arm’s length principle.
Accordingly, the draft guidelines require Fijian taxpayers to prepare contemporaneous documentation, with an expectation that benchmarking will be used, with comparables selected from New Zealand, Australia, the UK, the United States, and Canada.
The draft transfer pricing guidelines state that Fiji’s tax authority is looking to the practices of the New Zealand Inland Revenue and the Australian Taxation Office in an effort to provide a consistent approach to transfer pricing in the region.
Also, the guidelines state that Fiji’s transfer pricing regulations are consistent with that of major trading partners—including New Zealand, Australia, the UK, China, India, Japan, Malaysia, Korea, and Papua New Guinea.
For more information, contact a KPMG tax professional in Fiji:
+679 3301 155