Website costs need to be capitalized when the site meets the definition of an intangible asset under accounting standards. In Canada, this follows IAS 38 (International Accounting Standard 38) for public companies or ASPE Section 3064 for private enterprises. The test is whether the website will generate probable future economic benefits and whether costs can be reliably measured. A basic brochure website with static pages about your business is usually expensed immediately because it's considered advertising or marketing. An e-commerce platform, member portal, or SaaS application that directly generates revenue or measurably reduces costs gets capitalized. The planning and content creation phases are always expensed. Only the actual development and implementation costs get capitalized once technical feasibility is established. Capitalized website costs are then amortized over the asset's useful life, typically 3 to 5 years in our experience. Ongoing hosting, domain renewals, and minor content updates are operating expenses. Major redesigns or functionality additions that extend the site's life or capabilities are capitalized separately. The practical threshold matters. A $3,000 WordPress site for a local contractor gets expensed. A $45,000 custom e-commerce build with inventory integration gets capitalized. The $15,000 to $25,000 range is where most businesses need their accountant to weigh in based on the site's revenue function. At Ottawa SEO Inc., we've seen clients trip up by capitalizing basic sites or expensing legitimate assets. The CRA scrutinizes this during audits because it affects taxable income timing. A capitalized asset spreads the deduction over years, while an expense hits the current year. For tax planning, some businesses prefer immediate expensing when cash flow allows, even if capitalization is technically correct. The key documentation is a statement of work that separates planning, design, development, and content costs. Your accountant needs to see what you're actually building and whether it fits the asset definition. When in doubt, lean conservative and expense it, or get a written opinion before filing.