After receiving clarification from the ATO with regards to depreciation for assets purchased prior to 1 July 2016, the ATO has advised that Norfolk businesses can bring in assets previously purchased, which is great news. Businesses just have to take into consideration the decline in value from when the asset was originally purchased to now. In a nutshell the ATO are saying that if you have purchased anything for your business that hasn't surpassed its depreciation value then a depreciation value may be able to be calculated for it and may be a tax benefit.
There are two options for this:
Option 1 – For a fee, you can get a quantity surveyors report. The report will provide a business owner with a report detailing out all of the assets of the business, their written down value at 1 July 2016, and a schedule of depreciation for future use. The reports alone typically start from $300-$500, however you would have to factor in travel costs as well. You could probably get together with other business owners on the island and organise for one firm to come over and do a bulk valuation for everyone. That way you may be able to spread the travel costs.
Option 2 - If you have business records dating far enough back, you can provide your accountant with a list of assets you have purchased for the business, including their purchase date and amount, and they can calculate their depreciation and written down value to bring in.
These reports and calculations do not need to be completed prior to 30th June, however your accountant will need the information prior to being able to complete your Tax Returns.
In my opinion the ATO have been very generous to allow for this special dispensation for Norfolk Island businesses in accordance with the 2016 International Centre For Economics Report into Norfolk Island's economy. Part of their recommendations included not establishing a GST regime on island as it would be seen to be detrimental to kick starting the local economy.
Please seek the advice of a qualified accountant to take full advantage of this tax opportunity.