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wreck90

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#83022 9-May-2011 08:45
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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. 



 

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Zeon
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  #466987 9-May-2011 08:54
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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.




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davidcole
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  #467003 9-May-2011 09:31
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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.




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dman
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  #467764 10-May-2011 22:20
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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






robbyp
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  #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
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  #467772 10-May-2011 23:01
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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
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  #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? 

wreck90

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  #467798 11-May-2011 08:39
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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.  





 
 
 

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wreck90

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  #467799 11-May-2011 08:40
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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
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  #467805 11-May-2011 08:54
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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 Wink





bobmeister
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  #467808 11-May-2011 09:12
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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

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  #467819 11-May-2011 09:38
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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. 

webwat
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  #468047 11-May-2011 20:26
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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
953 posts

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  #468081 11-May-2011 21:56
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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"... 




dman
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wreck90

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  #469507 16-May-2011 09:47
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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.


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