Norfolk Island

Basic taxes (briefly)

Personal tax No
Corporate tax (in detail) There is corporate income tax in Norfolk.
Capital gains tax. Details There is corporate income tax in Norfolk.
VAT. Details Registered persons must lodge monthly GST returns with the Chief Revenue Officer at the GST Office and pay a 12% GST on the gross revenue amount collected for that month’s transactions, less any input tax credits, when lodging the GST return.
Other taxes Customs Import Duty; Business Transactions Levy
Government fee $215
Stamp duty No

International tax agreement

   


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TAXATION

Overview

Norfolk Island currently does not have a number of taxes such as those found in Australia and New Zealand, including payroll tax, company tax, income tax, land rates, fringe benefit tax, capital gains tax or land and property tax.

Personal Income Tax

There is no personal income tax in Norfolk.

Corporate tax

There is no corporate income tax in Norfolk.

Capital gains tax

Capital gains are not taxed in Norfolk.

Withholding tax

There is no withholding tax in Norfolk.

GST

Registered persons must lodge monthly GST returns with the Chief Revenue Officer at the GST Office and pay a 12% GST on the gross revenue amount collected for that month’s transactions, less any input tax credits, when lodging the GST return.

Stamp duty

There is no stamp duty in Norfolk.

Government fee

Norfolk companies pay annual fee for lodging annual return. Currently a local company pays $215 and a foreign company pays $880.

Other taxes and duties

Customs Import Duty is applicable to an import that is not for resale.
Business Transactions Levy is payable at 4% upon business change of ownership arrangements and/or interests. If the sale of business includes real estate, then the Levy may be paid through the Land Registry Office.

Conditions of Enjoying Tax Benefits

In accordance with the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, the Taxation Administration Act 1953, the Superannuation Industry (Supervision) Act 1993 and the Income Tax (Transitional Provisions) Act 1997), income derived by Territory residents, Territory companies or Territory trusts of Norfolk Island, from sources in Norfolk Island and from outside Australia, is exempt from income tax.
Therefore to our understanding the income tax exemption is only available for “Territory companies” while the definition of such companies is very strict. A company is, for the purposes of this Division, a Territory company in relation to the year of income if, and only if:
  • the company was incorporated in a prescribed Territory;
  • at all times during the year of income the company was managed and controlled wholly and exclusively in that Territory and was so managed and controlled by a person who was a Territory resident or by persons who were Territory residents;
  • at no time during the year of income was a shareholding interest in the company held by a person (not being a company) who was not a Territory resident;
  • at no time during the year of income was a person, or were 2 or more persons, in a position to affect any rights in connexion with the company of the holder of a shareholding interest in the company; and
  • no agreement was entered into before or during the year of income by virtue of which a person or persons would be in a position after the year of income to affect any rights in connexion with the company of the holder of a shareholding interest in the company.

That’s why we’re afraid that companies incorporated in Norfolk Island will be regarded as tax liable, for directors, shareholders and beneficial owners of such companies will be non-residents of Norfolk Island.

Double Tax Agreements

Norfolk does not have separate double taxation agreements, as it is represented as a part of Australia in tax agreements concluded by Australia. In the meantime, Australia has exchange of tax information relationships with 104 jurisdictions through:
  • 44 DTCs: Aruba, Austria, Belgium, Canada, Chile, China, Czech Republic, Denmark, Fiji, Finland, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Kiribati, South Korea, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Papua New Guinea, Philippines, Poland, Romania, Russian Federation, Singapore, Slovakia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Timor-Leste, Turkey, United Kingdom, United States, Vietnam,
  • 38 TIEAs: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Belize, Bermuda, Brunei, Cayman Islands, Cook Islands, Costa Rica, Curaçao, Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Isle of Man, Jersey, Liberia, Liechtenstein, Macao, Marshall Islands, Mauritius, Monaco, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Sint Maarten, Turks and Caicos Islands, Uruguay, Vanuatu, British Virgin Islands.

Foreign exchange control

There is no exchange control in Norfolk.

ACCOUNTS

Accounting records

A Norfolk company shall keep such accounting records as correctly record and explain the transactions of the company and the financial position of the company. A company shall retain the accounting records kept for a period of 7 years after the completion of the transactions to which they relate. The company shall keep the accounting records at such place or places as its directors determine. If any accounting records of a company are kept at a place outside Norfolk Island, the company shall, if required by the Registrar to produce those records at a place in Norfolk Island, comply with the requirement not later than 28 days after the requirement is made. The accounting records of a company shall be kept in writing in the English language.
If default is made, a director of the company who failed to take all reasonable steps to secure compliance by the company with the provision and any officer of the company who is in default are each guilty of an offence. 25 penalty units or imprisonment or both.

Financial statements

The directors of a company shall, not less than 14 days before an annual general meeting of the company cause to be made out a profit and loss account for the last financial year of the company, being a profit and loss account that shows fairly the profit or loss of the company for that financial year.
There is no general requirement to file accounts. The Registrar may, by notice in writing served on a company, require the company to lodge with the Registrar a copy of the relevant documents of the company in relation to a specified financial year, or specified financial years, of the company. A company on which the Registrar has served a notice shall, within 14 days after receiving the notice, lodge with the Registrar a copy of the relevant documents of the company in relation to the financial year of the company that is, or each of the financial years of the company that are, specified in the notice.

Audit

A Norfolk company is required to appoint an auditor to audit accounts with some exemptions.

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.

A Norfolk company shall within one month after the date of the annual general meeting of the company lodge with the Registrar an annual return containing a list of members and such other particulars as are prescribed and accompanied by the prescribed documents. If a company fails to comply with this requirement, the company and any officer of the company who is in default are each guilty of an offence.

    Taxes of Norfolk

    Min. rate for corporate tax No
    Capital gains tax No
    VAT 12%
    Withholding tax No
    Exchange control No
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