Private ruling: Self education expenses
Published: January 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the cost of attending productions? | A1: No.

Relevant facts and circumstances: You are currently employed in the entertainment industry. You attend the performances of other productions so that you can be made aware of current practices. This will allow you to remain up-to-date and to give you a competitive edge when competing for work by making you a stand out and a more desirable commodity. You consider that attending these performances is important to your professional development and allows you to make the work you do more professional.

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) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 56 ALR 785; 8 ATD 431 the High Court stated that: 'For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing assessable it must be incidental and relevant to that end. The words "incurred in gaining or producing the assessable income" mean in the course of gaining or producing such income.' Taxation Ruling TR 95/20 provides information on deductions for work related expenses for employee performing artists. TR 95/20 states that a deduction is allowable for the cost of theatre and film tickets if the show is directly relevant to the income earning activities of the performing artist. The Ruling states that a deduction is allowable for the cost of attendance at theatre performances if the performances have a content specifically related to the employee performing artist's current work. Costs associated with attendance at performances for general interest or entertainment or other private purposes are not an allowable deduction. It can not be said that the theatre performances you attended had a content specifically related to your current work. It is considered that the content of the performance was not directly relevant to your income earning activities. Even though you may be made aware of current practices used in the performances and use some ideas in your work, the benefit gained is too remote and the proportion of the expense that relates to work is incidental to the private expenditure. Whilst it is acknowledged that you will gain some benefits in attending other performances; this does not in itself mean that the expenditure is incurred in gaining or producing your assessable income. The performances may broaden your knowledge and benefit you; however, these reasons alone are not enough to demonstrate a sufficient connection between the expenses and your income-producing activities. Attending a production is a recreational activity that is open to all to experience and may be relevant to other occupations and members of the public. Attending a production does not specifically relate to your employment duties and is essentially private in nature. Therefore the associated costs are not regarded as being an allowable deduction. You consider the purpose of attending performances is part of your ongoing professional development as you want to be made aware of current practices and how that might influence your work. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is considered to be too remote. The knowledge and experience gained from attending the theatre is too general in nature for the expenses to be incurred in the course of gaining your assessable income. Furthermore, your expenses of attending performances are considered private and domestic in nature and you are not entitled to at deduction under section 8-1 of the ITAA 1997. Therefore, the costs of tickets, the travel involved and the parking are not deductible.

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