IRU

The use of IRUs in a telecommunications capacity

Indefeasible rights of use agreements (IRU’s) are commonly used in telecommunications agreements for the supply of cable system capacity services.  IRU’s have specific tax treatment under section 995.1 of the Income Tax Assessment Act 1997 (Cth) and are treated as capital expenditure for suppliers and customers.  Tax considerations play a central role in structuring IRU’s. Below, we set out the key areas an IRU must cover to be tax compliant. [Read more…]

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