Domain name 'profits' may attract tax

November 19 2002

The amount of money available to Australian Internet projects from a new foundation will depend partly on an Australian Taxation Office ruling on the tax status of the peak Internet names body auDA.

auDA chief executive Chris Disspain said discussions underway with the Tax Office would affect the earnings available from the recent $2.6 million sale of generic domain names for the proposed auDA foundation.

An unexpectedly high level of interest in the names left the non-profit organisation in danger of making money, and a trust to direct the money to improving the Internet for public purposes is being set up.

Disspain said that if auDA was ruled to be non-taxable, about $1.9 million would go into the trust. 

If tax was levied, he estimated the amount at about $1.3 million.

auDA will also be seeking support from the business community for the trust. It has not yet been decided whether the trust will be a self-funding ongoing concern, or if all the money will be spent.

At auDA's annual general meeting last week, Disspain claimed victory in auDA's recent disputes with some name resellers, saying auDA had "flexed its muscles" in two court actions.

Disspain said the company Internet Registry, which trades as NetRegister, had agreed to write to about 172,000 name owners correcting its earlier letter. 

He said he did not like spending large sums on litigation but the hardline policy on misleading reseller practices would continue.

Details at: http://www.smh.com.au/articles/2002/11/16/1037080963216.html