Private ruling: Training costs
Date of advice: 25 June 2015
Published: June 2015
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for the cost of training to improve your presentation skills? | A1: Yes.


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. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). Similarly, if the study of a subject of self-education objectively leads to, or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future, a deduction is allowable. To determine whether circumstances exist which would support the deduction for a communication course we must look to the 'essential character' of the expenditure. It is necessary to determine whether there is a sufficient nexus between the expenditure and the taxpayer's income-earning activities. In Case Z42 92 ATC 381; AAT Case 8419 (1992) 24 ATR 1183 it was held that a senior newspaper journalist whose duties involved interviewing people and making presentations, was allowed a deduction for the cost of a speech course because it was incurred in maintaining or increasing his ability in his current employment and therefore was incurred in carrying on that employment. We consider that your circumstances are similar to the above case. Internal and external communication and presentations are an integral part of your duties as an advisor. Your workplace feedback identified the need to improve your presentation skills. The training you will be undertaking is specifically tailored to meet your individual employment needs and to improve your presentation skills. As there is a sufficient nexus between the training costs and your current income earning activities, you are entitled to a deduction for the costs to be incurred for the training under section 8-1 of the ITAA 1997.

Relevant facts: You are employed as an advisor and sell products to clients. | Your employment duties include making regular presentations to clients. | You are required to present either to management or to external clients information on various products. This occurs most days. | You have received feedback that you need to improve your presentation skills for your work presentations. | You have contacted a speech and communication trainer to request assistance to improve your presentation skills. The trainer will assess your needs and develop a program that addresses your particular requirements.