13 May 088 Depreciation of computer softwareThe Government will increase the period over which capital expenditure on in house computer software is depreciated from 2.5 years to 4 years. This will apply to expenditure incurred on or after 7.30 pm (AEST) on 13 May 2008. The measure reduces a tax concession and tax expenditure. This measure has an ongoing gain to revenue which is estimated to be $1.3 billion over the forward estimates period.
In house software is computer software, or the right to use computer software, that is acquired, developed or developed by someone else and that is mainly used by the taxpayer in performing the functions for which the software was developed (that is, not for resale). This would include off the shelf software acquired for use by a taxpayer. Expenditure on in house computer software will continue to be depreciated on a straight line basis.
For a copy of the Treasurer's press release, No 2008/49, 13 May 2008, go here