Private ruling: Deductions
Published: September 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for taxes paid during your employment in country A? | A1: No

Relevant facts and circumstances: You were employed in country A by a company for a number of months. You paid tax on your income in country A.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 25-5(2)

Reasons for decision: Summary: Subsection 25-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) states that a taxpayer cannot deduct: (a) tax; or (b) an amount withheld or payable; or (c) expenditure for borrowing money (including payments of interest) to pay an amount covered by paragraph (a) or (b); or (d) expenditure for a matter relating to the commission (or possible commission) of an offence against an Australian law or a foreign law; or (e) a fee or commission for advice about the operation of a Commonwealth law relating to taxation, unless that advice is provided by a recognised tax adviser. The taxes that you paid while employed in country A are all taxes. Therefore, they are not deductible under paragraph (a) of subsection 25-5 (2) of the ITAA 1997.