The ATO recently issued a ruling outlining their view on the deductibility of expenditure incurred in acquiring, developing, maintaining or modifying a website for use in the carrying on of a business.
Expenditure may be considered “revenue” in nature and is therefore generally deductible if it is incurred in maintaining a website. This relates to preservation of the website but does not include:
- altering the functionality of the website
- improving the efficiency or function of the website or
- extending the useful life of the website.
If however, 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 that case, an outright deduction cannot be claimed.