The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

13 May 2008

NO.049

Depreciation Period for Computer Software

The Government will increase the depreciation period for expenditure on 'in-house computer software' which is capital in nature from 2.5 years to 4 years.

This measure has an ongoing gain to revenue estimated at $1.3 billion over the forward estimates period, and demonstrates the Rudd Government's commitment to finding savings in the Budget to help tackle inflationary pressures.

This measure will apply to expenditure on 'in-house computer software' incurred on or after 7.30 pm (AEST) on 13 May 2008.

Expenditure on 'in-house computer software' is expenditure by the taxpayer on acquiring, developing or having someone else develop computer software which is mainly used by the taxpayer. Expenditure on 'in-house computer software' will continue to be depreciated on a straight line basis.

A 4 year depreciation period for expenditure on 'in-house computer software' is the same period as the Commissioner for Taxation's 'safe harbour' effective life for computer hardware.

Australian taxpayers are entitled to a tax system that is as fair and efficient as possible and this measure will help achieve that goal.

13 May 2008