Private ruling: Registration fee
Published: September 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for a registration fee? | A1: No.

Relevant facts and circumstances: In order for you to gain employment in your profession in Australia it was necessary for you to become registered with an organisation. You were required to pay a fee for this registration.

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. For expenditure to be deductible, the expenditure must have the essential character of an outgoing incurred in gaining assessable income. It is not sufficient that the expenditure is a prerequisite to the derivation of assessable income; it must contribute to the derivation of that income. Expenditure that is a prerequisite to obtaining employment is not deductible as it is incurred at a point too soon to be regarded as being incurred in gaining assessable income. You were required to become registered with an organisation to be able to work in your profession in Australia. The expenses you incurred to obtain this registration were a prerequisite to earning your assessable income. Accordingly, you are not entitled to a deduction under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.