A whole new range of business expenditure has become tax deductable under amendments to the Income Tax Assessment Act 1997 (Cth) (Act). The expenditure is intriguingly called "blackhole expenditure". This article overviews the new blackhole expenditure tax deduction provisions, particularly for expenses relating to intellectual property and its commercialisation.
1. What is blackhole expenditure?
One Australian Government website defines the phrase this way: "Blackholes occur when business expenses are not recognised under the income tax laws." The formal name of the new law is Tax Laws Amendment (2006 Measures No. 1) Act 2006.
Blackhole expenditure is made up primarily of business start-up costs. For example, for the commercialisation of intellectual property, a spin-off or start-up company might be formed. The new blackhole provisions may provide tax deductions for commercialisation costs incurred by the intellectual property originator, provided they are not claimable elsewhere.
It's time to stop believing the myth that lawyers can provide legal protection with words alone. In addition to words, protection in contacts requires knowledge and know-how regarding business process, policies, training, standards, and codes of conduct. Why is this so?
In February 2010 there have been two significant copyright decisions. The first is Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24. This first instance Federal Court of Australia decision went against the copyright claimants, 34 companies involved largely in film production funding and distribution.
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