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  • #991032
    Tracey G
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    This is something I’ve been wondering about for a long time.

    There are many examples of developers and creatives offering digital products online for free download, and asking for (but not requiring) a donation to help them keep offering their products.

    I like supporting people who have worked hard on a quality product, even when they’re offering it free to everyone.

    My question is this: if you make a donation (an optional payment) in exchange for a digital product that you will use in your work, can this be counted as a work expense for tax purposes?

    #1179636
    bb1
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    From the ATO.

    Gifts and donations

    You can only make tax deductible gifts or donations to organisations that have the status of deductible gift recipients (DGRs).

    Deductions for gifts are claimed by the person that makes the gift (the donor).

    For you to claim a tax deduction for a gift, it must meet four conditions:
    The gift must be made to a deductible gift recipient. We call entities that are entitled to receive tax deductible gifts ‘deductible gift recipients’ (DGRs).
    The gift must truly be a gift. A gift is voluntary transfer of money or property that you receive no material benefit or advantage for.
    The gift must be covered by one of the gift types. The most common gift is money but deductions may be claimed for other types of gifts such as property or shares.
    The gift must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting the types of deductible gifts they can receive.

    #1179637
    bb1
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    I suppose the other question and its a question only as I have no idea, and our esteemed accounatants may be able to answer this one.

    Is a software developer technically allowed to ask for a “donation”, or is this just a way around the current tax system. What would the ATO’s view be on software developers asking for “donations”.

    Or could I also ask my clients to make a donation for serices i provide.

    #1179638
    Gizmo
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    Hello,

    I see “Donation” as just a term used due to ease of implementation.
    I.E I think its used as it appears many systems have the built in ability to deliver this feature with matching graphics and what not. I think paypal has this feature?

    When I see “Donation” used in reference to a non charitable cause I think of it as an optional payment.

    If it were me I would ask the person requesting a donation to send an invoice that I would then pay.

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