Business owners, do you incur “Blackhole Expenditures”? Are you aware of the treatments for such expenditures?
“Blackhole Expenditures” are often referred to as other capital expenditures or business related capital expenses. Section 40-880 deals specifically with these types of expenditure.
Post announcement of 2015-2016 Federal Budget, certain costs incurred in starting up a business by small businesses and individuals can be immediately deducted. Costs such as getting advice or services relating to the structure or operation of the proposed business, for example, formation expenses are now fully deductible in the financial year when the expenditure is incurred.
This new rule is effective from 1 July 2015.
However, certain business related costs are to be claimed in equal portions over five years, examples are:
Tax Summary 2015 & 2016