Income tax - computer software acquired for use in a taxpayer’s business

This item covers the income tax treatment for taxpayers who purchase, lease, licence, subscribe for, develop, or commission computer software for use in their business. It updates and replaces the 1993 Policy Statement on computer software published in an Appendix to Tax Information Bulletin Vol 4, No 10 (May 1993) - except for the parts that deal with taxpayers carrying on a software development business which will be dealt with separately. The item contains reference to the interpretation statement IS 08/02: “Deductibility of Feasibility Expenditure” (Tax Information Bulletin Vol 20, No. 6 (July 2008)). Comments in the recent Court of Appeal decision CIR v Trustpower Ltd [2015] NZCA 253 have questioned some aspects of that statement. This item reflects that until that litigation is finally resolved, the Commissioner will continue to apply the position set out in the IS 08/02.