Private ruling: Deductions
Date of advice: 15 December 2016
Published: May 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Question and answer | Are you entitled to a deduction for compulsory weekly union election contributions? | No.

Relevant facts and circumstances: You are employed by a union. You are required to make a weekly contribution of $X which is deducted from your salary to the union election fund for elections. This payment is compulsory. You are required to make this payment even if you are not contesting a union election.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: An expense is deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) if and to the extent to which it is incurred in gaining or producing your assessable income or in carrying on a business for that purpose. However you cannot claim a deduction for an expense that is of a capital, private or domestic nature. A deduction is only allowable if an expense: ● is actually incurred ● meets the deductibility tests ● Satisfies the substantiation rules. Taxation ruling 2000/7 (TR2000/7) looks at subscriptions, joining fees, levies and contributions paid to associations by individuals. Paragraph 12 of TR 2000/7 states that the following levies and contributions are not allowable deductions under section 8-1 of the Act: (a) Payments to, or to assist, a political party; (b) Payments to provide overseas relief; (c) Payments to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off by their employers; and (d) Payments by salaried elected trade union officials into a general fund for the election of union officials. Therefore the $X weekly compulsory contribution you make to the union election fund is not an allowable deduction.