Prompted by one of our clients, we've been doing a bit of reading and research on how NZ companies should treat the development costs of the products and services that we charge for.
As software has come to form a core part of many businesses now, it's a timely reminder to check and make sure that you're treating the costs correctly for tax and accounting purposes.
Below is our understanding of Inland Reveue's official document on the subject, the exciting and riveting: "INCOME TAX – COMPUTER SOFTWARE ACQUIRED FOR USE IN A TAXPAYER’S BUSINESS". We recommend that you speak to your accountant to get specific guidance for your business and circumstance — please don't take our advice as law.
First up, it's a pretty dry read, so make sure you have plenty of caffeine on board and no tempting distractions such as cute cat gifs anywhere nearby... in fact turn off the internet and lock yourself away. Or ask your accountant to read it — that's what they're designed for.