Tax Changes Threaten Software Development Projects

Tax Changes Threaten Software Development Projects

Because of recent changes to NZ tax law the need for a decent discovery and feasibility process, before undertaking a significant IT capital project, is becoming even more imperative.

Inland Revenue said last month that companies can no longer deduct money spent on unsuccessful software projects for tax purposes.

Tax specialist at KPMG Communications Adrian Michael said the rule meant companies would think twice about investing in new software.

“If you have a more risky project which might have a more uncertain outcome you might have second thoughts on it if you want to go down that road because if it goes wrong, you have this double whammy — no outcome and no tax deduction.”

The following articles highlight the issues involved: