Private ruling: Election campaign funding
Date of advice: 26 July 2023
Published: 11 September 2023
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the election funding paid from the AEC to you included in your assessable income under section 6-5 of the Income Tax Assessment Act (ITAA 1997)? | A1: No. ATO ID 2006/72: Income Tax- Election funding received by political parties from the Australian Electoral Commission has an established ATO view that election funding received by a political party, is not assessable income under section 6-5 of the ITAA 1997. | Q2: Is the election funding paid from the AEC to you deemed to be assessable income under subdivision 20-A of the ITAA 1997? | A2: Yes, the amount of election funding paid to you would be an assessable recoupment under section 20-25 of the ITAA 1997 as it is a reimbursement in respect of a loss or outgoing. Subsection 20-20(3) of the ITAA 1997 provides that an amount received as recoupment of a loss or outgoing is an assessable recoupment if it is paid to cover the cost of a deductible expense listed in section 20-30 of the ITAA 1997 and the deduction can be claimed in the current year or in an earlier income year. The list in section 20-30 includes deductions claimed in relation to election expenses incurred for commonwealth and state elections under section 25-60 of the ITAA 1997.

Relevant facts and circumstances: You are an Australian politician registered with the Australian Electoral Commission (AEC). For the year ended 30 June 20XX, you will be including a taxable profit that resulted from the election activities in your income tax return. For the year ending 30 June 20XX, you have paid expenses with respect to your election. You will be including these expenses as deductible expenses in your FXX tax return. For the year ending 30 June 20XX, an AEC election funding has been paid to you from the AEC with respect to your FY20XX election funding claim. Based on the AEC, election funding is the money AEC distributes to eligible political parties, candidates and Senate groups to reimburse them for electoral expenditures.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 subdivision 20-A | Income Tax Assessment Act 1997 section 20-20 | Income Tax Assessment Act 1997 subsection 20-20(3) | Income Tax Assessment Act 1997 section 20-25 | Income Tax Assessment Act 1997 section 20-30 | Income Tax Assessment Act 1997 section 25-60