In May 2021, the Government announced it will allow taxpayers to self-assess the tax effective lives of certain depreciating intangible assets, such as patents, copyrights and in-house software. This forms part of the Government’s $1.2 billion Digital Economy Strategy.

The Government has released for public consultation the draft bill giving effect to this measure. The proposed legislation amends the tax law to allow taxpayers to choose whether to self-assess the effective life of eligible depreciating intangible assets or to continue to use the tax effective life set by the statute. This change will apply to assets acquired from 1 July 2023, after the temporary expensing measure has concluded.

Providing taxpayers with the option to match tax treatment of certain intangible assets to the time these assets provide economic benefits can encourage further investment in these assets and hiring in research and development.

Feedback is sought on the Exposure Draft legislation. Interested parties are encouraged to make a submission by 23 December 2021.

Further information available here.

Exposure Draft

Explanatory Memorandum


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