Private ruling: Whether the entity is entitled to a deduction for professional fees
Date of advice: 24 October 2016
Published: January 2017
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the entity entitled to a deduction for fees paid for professional services provided to the entity under section 8-1 of the Income Tax Assessment Act 1997 ? | A1: Yes

Relevant facts and circumstances: The entity will pay for professional services provided to it with respect to the income earning activity it undertakes.

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

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) discusses general deductions. Subsection 8-1(1) of the ITAA 1997 states you can deduct from your assessable income any loss or outgoing to the extent that: a. It is necessarily incurred in gaining or producing your assessable income; or b. It is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income. Subsection 8-1(2) of the ITAA 1997 states however, you cannot deduct a loss or outgoing under this section to the extent that: a. It is a loss or outgoing of capital, or of a capital nature; or b. Is it a loss or outgoing of a private or domestic nature; or c. It is incurred in relation to gaining or producing your exempt income or your non-assessable non-exempt income; or d. a provision of the Act prevents you from deducting it. The entity is entitled to claim the fees charged as a deduction under section 8-1 of the ITAA 1997 as it is incurred in earning its assessable income and is not excluded under subsection 8-1(2) of the ITAA 1997.