Private ruling: Visa Application Expenses
Date of advice: 22 January 2016
Published: March 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for the cost of obtaining a visa? | A1: No. | Q2: Are you entitled to a deduction for the costs relating to applying for a visa? | A2: No.

Relevant facts and circumstances: You lived overseas before you were recruited by an Australian employer to work in Australia. You arrived in Australia with a Temporary Work (Skilled) visa. Your contract with your employer was extended. Your employer decided not to extend your Temporary Work (Skilled) visa and informed you of such. At this time you applied for a different visa to allow you to continue to be employed. You received a bridging visa while your application for the other visa was being decided. You also incurred other expenses, in addition to the application fees, in being awarded the bridging visa and applying for the other visa.

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 or a provision of the taxation legislation excludes it. The courts have considered the meaning of 'incurred in gaining or producing the 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 the assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing assessable income" mean in the course of gaining or producing such income. The expenditure must therefore be related to the production of assessable income. In your case, to continue working you were required to have an appropriate Australian visa. Even though you are already employed by an Australian employer and their not continuing to pay the visa fees on your behalf necessitated your expenditure, the nature of the expense doesn't change. We consider that these expenses were not incurred in the course of gaining your income. They were incurred to place you in a position to be able to earn income, rather than in the completion of your employment duties. A similar circumstance is the well settled issue of travelling to work. You incur expenses such as fuel, maintenance or fares in travelling to work and you need to get to work to be able to earn your income, however these expenses were incurred to put you in a position to perform duties of employment, rather than in performance of those duties. Therefore, you are unable to claim a deduction for your visa fees, or any other expenses related to your receipt of a bridging visa and applying for the other visa.