ATO eyes new tax rules for computers

Launches effective life review for computers and computer peripherals

The Australian Taxation Office will examine the rules governing the tax treatment of computers, the agency has revealed.

The ATO has launched an effective life review of computers.

The ATO's decisions on the effective life of a particular class of capital expense govern how much an individual can claim for an asset's decline in value each year.

Individuals are able to claim a tax deduction for the work-related portion of a range of hardware, including computers and printers.

Currently, desktop PC and software are depreciated over four years. Laptops are depreciated over three years.

(Items that cost less than $300 can be claimed in a single year.)

The ATO review will cover "hardware that relates to computing," including peripherals.

The ATO's briefing on the review states that its purpose "is to ensure our effective life determinations to reflect current industry practices and expectations,"

The agency plans to have new effective life determinations ready to apply from 1 July 2016.

The ATO said it will issue draft effective lives before any final decisions are made.

The agency recently suffered problems with its myTax service due to a spike in usage in the wake of the end of the 2014-15 financial year.

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