Private ruling: Work related expenses
Published: July 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for obtaining a renewal of a police clearance certificate? | A1: Yes.

Relevant facts and circumstances: You are an employee. You are required to obtain a police clearance certificate on an annual basis to be able to undertake your employment duties. You pay the application fee for the police clearance.

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. Taxation Ruling TR 98/6 states that a deduction is not allowable for the cost of obtaining a police clearance certificate (PCC) where it is obtained as a prerequisite to starting work. Although the police clearance certificate may be necessary for the employment into the industry, the expense is an outgoing that precedes the earning of assessable income. In your case, you have been working with the same employer for several years. It is a requirement that you obtain a PCC on a yearly basis to be able to undertake your work duties. It is considered that as you have been employed in the same industry for a period of time the expense is necessary to preserve your existing income stream. The cost is for the renewal of your PCC as opposed to the cost of obtaining an initial PCC for employment into the industry. Therefore, the cost of obtaining the renewal of the PCC is deductable under section 8-1 of the ITAA 1997, provided you are continuously employed in the industry at the time of renewal.