Private ruling: Dog expenses
Published: August 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for a portion of the food, medical and insurance expenses incurred in relation to your dog? | A1: No

Relevant facts and circumstances: You are sometimes required to work from your workplace overnight and on an 'on call' basis outside of your normal shifts. When you work late at night or are called into work during the night you always take your dog with you as you are generally at your workplace by yourself at these times. The dog sits in the office and barks or growls when people arrive. He is trained to come on demand if you feel in danger; however, he has not been professionally trained as a guard dog. The dog is a large dog with a deep bark and can look threatening. You also visit clients after hours and your dog accompanies you on these visits, sitting in your car. Your dog does not accompany you to work full time, on the days you are not on call or working at night the dog remains at your home. You incur expenses in relation to your dog including for food, insurance, vaccinations and medications.

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 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. There must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income ( Ronpibon Tin NL & Tongkah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 8 ATD 431; (1949) 4 AITR 236), and the expenditure must not be capital, private or domestic in nature. A dog is ordinarily considered a pet and therefore expenses incurred in relation to a dog are generally not deductible as they are private or domestic in nature. However, in some instances a dog is considered a working beast or item of plant for a business, for example, a guard dog used to provide security for business premises that remains on site at all times and a working dog used to muster stock. An animal does not qualify as plant unless it is used in a business ( Case M59 , 80 ATC 409 and Case M72 , 80 ATC 497). In your case, the dog accompanies you to work late at night and when you are on call and also guards your vehicle while you are visiting clients after hours. However, at all other times it is a pet that resides with you. On balance, we consider that the costs incurred in relation to your dog are essentially private in nature. Accordingly, you cannot claim a deduction for the food, medical and insurance expenses incurred in relation to your dog.

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