What's the effective life of Australia's data centres?

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What's the effective life of Australia's data centres?

ATO proposes specific depreciation lifespans.

The Australian Taxation Office is asking the IT industry to pitch in and help it work out the effective lifespan of data centres and the kit that runs them.

On Friday the ATO quietly published a draft determination for the effective lives of assets used in the data centre industry.

Following a routine review of the assets and equipment listed in its taxation ruling 2016/1 (effective life of depreciating assets), the ATO decided that sustained growth in the local data centre industry over the last few years necessitated its own category.

Data centre operators to date have either self-assessed the useful lives of their facilities and equipment for depreciation purposes, or have turned to more general categories under Table B of the TR 2016/1.

Those who choose to self-assess need to be prepared to explain the rationale of their lifespan choice should they be audited by the ATO.

The tax office wants to give data centre operators more certainty in their depreciation claims, and so has collated a list of 19 data centre assets with suggested lifespans for industry feedback.

Assets listed include aisle containments, chillers, air conditioning units, cooling towers, humidifiers, water tanks, UPS, racks, leak detection systems, raised floors, and rectifiers.

Suggested lifespans - which the ATO came to following consultation with data centre operators and equipment manufacturers - range from five years for humidifiers and UPS batteries to 40 years for raised floors.

Should the draft lifespans be made official, data centre operators will need use the suggested figures or explain to the ATO how they came to a different number should they be audited.

The ATO is taking comment until Februrary 28. The new lifespans would come into effect from July 1 this year.

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