The ATO has released a public taxation ruling covering the ATO’s views on the deductibility of expenditure incurred in acquiring, developing, maintaining or modifying a website for use in the carrying on of a business.
Importantly, if the expenditure is incurred in maintaining a website, it would be considered 'revenue' in nature, and therefore generally deductible upfront. This would be the case where the expenditure relates to the preservation of the website, and does not:
- Alter the functionality of the website
- Improve the efficiency or function of the website
- Extend the useful life of the website.
However, if the expenditure is incurred in acquiring or developing a commercial website for a new or existing business, or even in modifying an existing website, it would generally be considered capital in nature (in which case an outright deduction cannot be claimed).
Please contact us if you want any guidance about the ATO's latest views on this important issue. Please refer to TR2016/D1
- Super changes may require action by 30 June 2017
- Tax officers "hit the streets" to "help small businesses"
- Reduction in FBT rate from 1 April 2017
- No overtime meal allowance, no overtime meal deduction
- Diverting personal services income to SMSFs
- Making 'intangible' capital improvements to pre-CGT assets
- Ride-Sourcing is 'Taxi Travel'
- Deductibility of expenditure on a commercial website
- ATO Data Matching Programs Activated
- Changes to the ‘Backpacker Tax’