In last night’s federal budget, the Australian IT industry was hoping for tax deductibility of Year 2000-related costs, and a more industry-friendly approach to capital gains tax. According to a report in yesterday’s Australian newspaper, the Y2K issue could be a winner. Although precise details will not be available till the budget is brought down, it seems business will be eligible for immediate tax deductions relating to the cost of replacing computer software to achieve Y2K compliance. Apparently the Tax Office has decided that business should be allowed to claim most of the costs associated with adjusting computer systems for the move into the next millennium. The sting in the tail is that the software purchased for purposes other than year 2000 compliance will no longer be immediately tax-deductible.
