IRD Banning Failed Software Development Deductions

Forums › ICT Policies and Regulation › IRD Banning Failed Software Development Deductions

wreck90

780 posts

Ultimate Geek
Inactive user

#83022 9-May-2011 08:45

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10724282

IRD make the ridiculous justification that failed software projects do not contribute to income.

I think this is crazy, failures are part of running a business.

Surely the same argument applies to all business ideas that fail. eg, if you spend money on any type of project which fails to produce income.

Nice one IRD, you just killed the New Zealand software development industry. Certainly if I were an iphone developer I'd be going overseas.

1 | 2

3926 posts

Uber Geek
+1 received by user: 759

Trusted

#466987 9-May-2011 08:54

LOL WTF - what a stupid move. I don't see how the IRD can nilly willy make these calls either. It's like when the police tried to reclassify MSAA rifles without parliament putting through any ammendments, it fell over in court.

Speedtest 2019-10-14

davidcole

6099 posts

Uber Geek
+1 received by user: 1465

Trusted

#467003 9-May-2011 09:31

Does seem a bit ridiculous, as technically isn't a failed project R & D - or maybe I high risk project needs to be labeled that and it would skirt these stupid new rules.

Previously known as psycik

Home Assistant: Gigabyte AMD A8 Brix, Home Assistant with Aeotech ZWave Controller, Raspberry PI, Wemos D1 Mini, Zwave, Shelly Humidity and Temperature sensors
Media:Chromecast v2, ATV4 4k, ATV4, HDHomeRun Dual
Server Host Plex Server 3x3TB, 4x4TB using MergerFS, Samsung 850 evo 512 GB SSD, Proxmox Server with 1xW10, 2xUbuntu 22.04 LTS, Backblaze Backups, usenetprime.com fastmail.com Sharesies Trakt.TV Sharesight

dman

956 posts

Ultimate Geek
+1 received by user: 33

#467764 10-May-2011 22:20

what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

https://www.youtube.com/c/SoundSpeeding

robbyp

1199 posts

Uber Geek
+1 received by user: 8

#467768 10-May-2011 22:41

dman: what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

Thats bean counters for you.

grant_k

3539 posts

Uber Geek
+1 received by user: 124

Trusted

#467772 10-May-2011 23:01

dman: what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

Agreed! This sort of head-in-the-sand mentality will only serve to drive more of our best and brightest offshore.

robbyp

1199 posts

Uber Geek
+1 received by user: 8

#467773 10-May-2011 23:23

grant_k:
dman: what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

Agreed! This sort of head-in-the-sand mentality will only serve to drive more of our best and brightest offshore.

What are the rules in Oz?

Mighty Ape

Shop now at Mighty Ape (affiliate link).

wreck90

780 posts

Ultimate Geek
Inactive user

#467798 11-May-2011 08:39

robbyp:
grant_k:
dman: what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

Agreed! This sort of head-in-the-sand mentality will only serve to drive more of our best and brightest offshore.

What are the rules in Oz?

I'd suppose Oz like most other countries would allow software development costs to be tax deductible regardless of the outcome of the project.

If this applied in the USA MS windows/google /facebook etc would have been developed elsewhere.

Software is a representation of 'ideas'. IRD are killing incentive to make new ideas in New Zealand.

wreck90

780 posts

Ultimate Geek
Inactive user

#467799 11-May-2011 08:40

grant_k:
dman: what drugs was this guy smoking who approved this ruling? must have been some potent stuff

seriously what the.... !!! :-o

is the talk of our work at the moment, way to go IRD for setting NZ back a 100 years

Agreed! This sort of head-in-the-sand mentality will only serve to drive more of our best and brightest offshore.

Incidentally, complain to your local mp.

I did.

grant_k

3539 posts

Uber Geek
+1 received by user: 124

Trusted

#467805 11-May-2011 08:54

wreck90: Incidentally, complain to your local mp.

I did.

That's a very good idea. After the election, our local MP will be the candidate whom I helped to get selected. So I'll have some good leverage there

bobmeister

106 posts

Master Geek
+1 received by user: 3

#467808 11-May-2011 09:12

I think that this means that there will never be "failed" software developments again, as successful ones can be deducted/depreciated. Failed projects will become part of successful ones.

wreck90

780 posts

Ultimate Geek
Inactive user

#467819 11-May-2011 09:38

bobmeister: I think that this means that there will never be "failed" software developments again, as successful ones can be deducted/depreciated. Failed projects will become part of successful ones.

It shows the absurdity of the law. Imagine the complexity of trying to audit whether a project was successful or not.

I wonder if INCIS would have been developed in NZ under these IRD rulings? It must be one of the larger IT Failures in NZ.

I know of so many projects which would not have gone ahead had these laws been in place back then.

Lenovo

Shop now for Lenovo laptops and other devices (affiliate link).

webwat

2036 posts

Uber Geek
+1 received by user: 145

Trusted

#468047 11-May-2011 20:26

If a software project really is failed, then it certainly contributes to costs! I guess they will all come out of a general R&D budget until they can be allocated to something taxable, or just get classed as work on internal software?

Time to find a new industry!

dman

956 posts

Ultimate Geek
+1 received by user: 33

#468081 11-May-2011 21:56

wreck90:
bobmeister: I think that this means that there will never be "failed" software developments again, as successful ones can be deducted/depreciated. Failed projects will become part of successful ones.

It shows the absurdity of the law. Imagine the complexity of trying to audit whether a project was successful or not.

my $1 million project that only produced a "hello world" program I'm counting as a SUCCESS!! :-D

yay, go me and my "Hello World" program that truly is the best and most expensive one in the world

Well... until somebody else has a $10 million project which they must turn around into a "success"...

https://www.youtube.com/c/SoundSpeeding

dman

956 posts

Ultimate Geek
+1 received by user: 33

#469345 15-May-2011 17:14

More analysis:

http://www.nzcs.org.nz/newsletter/article/122

https://www.youtube.com/c/SoundSpeeding

wreck90

780 posts

Ultimate Geek
Inactive user

#469507 16-May-2011 09:47

I contacted my local MP (Simon Bridges) and outlined my concerns.

This is the response from his office (after firstly misinterpreting the new treatment of project expenses).....

"I see what you mean but still feel you need to seek professional guidance.
IRD?s position apparently does not come as ?a change in Policy?, it comes from a new interpretation of the Act, i.e. there is no discretion in its view ? it?s the Law and they?ve been interpreting it wrongly in the past."

So, they are basically telling me to go away and talk to an accountant (what help is that to correct an industry taxation issue? ).

Very disappointing that my local MP does not really care about this.

1 | 2