Is the fees for Website domain registration, an allowable deduction? The underlying question being, is this expense of a capital or revenue nature. Capital expenses have to be written off annually using depreciation while Revenue expenses can be expensed in the current year itself.
Applicable capital/revenue tests as established by case law are 1
- is it of a one-off nature?
- does it give rise to an enduring benefit?
- is it part of the business structure of a taxpayer?
Therefore, expenditure incurred in acquiring a domain name is capital expenditure 1, as it is of a one of nature, giving rise to an enduring benefit and part of the business structure of the taxpayer.
Revenue Deductions are allowed under Part D of the ITA, 2007. 2
But Customers can claim an immediate tax deduction for assets costing less than a threshold of $1000.3
2.https://www.legislation.govt.nz/act/public/2007/0097/4.0/DLM1512368.html