Turn on tax reporting for fixed assets

If you have the Adviser user role, turn on tax reporting to run alongside book value reporting for your assets. After you turn it on, you can select tax depreciation settings for your fixed assets and asset types, create pools, run tax depreciation, and run and view tax depreciation reports.

Before you start

Make sure you have selected your fixed assets start date.

About your tax reporting start date

Your tax reporting start date must be:

  • The first day of your financial year.
  • The first day of a month. If your financial year does not start on the first day of a month, for example 6 April, depreciation won't be posted correctly. You can change your financial year, or maintain your fixed asset register outside Xero. Talk to your accountant or bookkeeper about what's best for you.

The available dates depend on when you last ran depreciation.

  • No depreciation has been run - Your tax reporting start date will be your fixed assets start date.
  • Last depreciation date is part way through your financial year - Your tax reporting start date will be the start of that financial year. For example, if your year end is 30 June, and you last ran depreciation on 31 January 2016, your tax reporting start date will be 1 July 2015.

    If you disposed an asset after your last financial year end (after 30 June 2015 in this example), you'll need to undo the disposal before you can turn on tax reporting. Redo the disposal after you've turned it on. Alternatively, wait until depreciation has been run to 30 June 2016 and turn on tax reporting on 1 July 2016.

  • Last depreciation date is the end of your financial year - You can select either the start of the just-completed financial year, or the start of your next financial year. For example, if your year end is 30 June and your last depreciation date is 30 June 2016, you can select either 1 July 2015 or 1 July 2016 as your tax reporting start date.

    If you disposed an asset after your last year end (after 30 June 2016 in this example), you'll need to undo the disposal before you can turn on tax reporting. Redo the disposal after you've turned it on. Alternatively, wait until depreciation has been run to 30 June 2017 and turn on tax reporting on 1 July 2017.

What happens when you turn on tax reporting

When you turn on tax reporting, Xero:

  • Adds a Tax Depreciation Default section to all your fixed asset types and copies the Book Depreciation Default values over. You can edit the asset type to change the tax depreciation details.
  • Adds a Tax Value section to all draft and registered fixed assets and copies the Book Value details over. You can edit the asset to change the tax depreciation details.
  • Adds a Pools tab to your fixed assets settings and the Fixed Assets screen on the Accounts menu. You can now create a fixed asset pool.
  • Calculates tax depreciation alongside book depreciation when you run depreciation in Xero.
  • Makes available fixed asset tax reports.

Turn on tax reporting

  1. On the Settings menu, select General Settings.
  2. Under the Features heading, click Fixed Assets.
  3. Click the Tax Reporting tab.
  4. If you have the option of more than one start date, select a start date.
  5. Click Start Tax Reporting.

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