The Inland Revenue Department last provided guidance to software developers around taxation in 1993. Unsurprisingly, technology has expanded in unforeseen ways since then and in recognition of this, the IRD has released an issues paper relating to the taxation of expenditure in software development. It is now seeking submissions from the industry as to how to address such difficult concepts as:

- the depreciation regime for software;

- how to address research and development costs; and

- how to apply trading stock rules where software is developed for sale or licence.

The guidance that results out of this call for submissions could affect a software development company's tax position for years to come, so have your say before 25 August.