Private ruling: Deduction for work related self-education expenses - Graduate Certificate in Minerals & Energy Economics
Published: September 2013
Ruling period: Year ended 30 June 2013

Ruling: Q1: Are you entitled to a deduction for work related self-education expenses for costs incurred in respect of your studies? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are currently employed on a full time basis in the mining industry and have been for a number of years. You are employed as an engineer and you are responsible for managing and maintaining the facilities maintenance (operational) and capital expenditure of the company. You are studying to obtain a Graduate Certificate in Minerals & Energy Economics which is the initial subject relating to the Masters of Science (Mineral and Energy Economics). You request time away from your employment for study leave in weekly blocks and spend a considerable amount of time during the days you attend your workplace after hours and on the weekends studying your subjects. You have undertaken the studies to assist with your current employment in the field of maintenance analysis and improvements engineer at the mine. The studies relate to your current employment by developing a broader understanding of the management maintenance budget in regard to operational expenditure, capital expenditure and depreciation of the assets. The knowledge gained from the studies endeavours to enhance the profitability of the mine facility to ensure the mine continually improves in output and competitiveness for production locally, nationally and internationally by a more rounded understanding or correct business strategies for the mine. You are paying the full fees unsupported by any Commonwealth funding. You incurred self-education expenses in the 2013 income year.

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 98/9 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. In your case, the Commissioner is satisfied that the study you are undertaking is directly related and connected to your current income earning activities. Accordingly, you are entitled to a deduction for your self-education expenses.