Private ruling: Deduction of Pre-Employment Expenses
Date of advice: 24 February 2016
Published: April 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for licence fees paid for your professional registration? | A1: No


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 a loss or outgoing which is incurred in gaining or producing assessable income, unless the loss or outgoing is capital, or is of a capital, private or domestic nature. A deduction is not allowable under section 8-1 of the ITAA 1997 for fees paid to enable a taxpayer to be admitted to practise in a profession, as they are considered to be capital or of a capital nature (Taxation Ruling TR 95/9). In your case, the expenses incurred by you in paying fees were incurred in order to obtain your professional registration. The registration gives you a right to work in your profession in Australia. The expense was not incurred in doing your work in your profession. The cost of registering is therefore capital or of a capital nature, and is not deductible under section 8-1 of the ITAA 1997. Consequently you are not entitled to a deduction for the expenses.

Relevant facts: You recently migrated to Australia and commenced working in your profession shortly afterwards. | Prior to commencing working in Australia you had to receive the required accreditation from the appropriate authorities in Australia. | As part of this process you paid fees to different Australian authorities that regulate your profession prior to your arrival in Australia.