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
  • alter the functionality of the website;
  • improve the efficiency or function of the website; or
  • 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.

Editor: Please contact us if you want any guidance about the ATO’s latest views on this important issue.

 

**Disclaimer: The information is sourced through NTAA**

For tax help, please call Hart Partners today: 
Phone (03)9600 3220 Mobile: 0413 222 922 Fax (03) 9376 3507 
or email us [email protected]

Please Note:

Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

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