Private ruling: Work related expenses
Date of advice: 26 August 2015
Published: August 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for the costs of obtaining Permanent Residency? | A1: No.

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 arrived in Australia on a 457 visa. You were employed. You applied for Permanent Residency and it was granted during the 2014-15 financial year. Your employment contract states that "your appointment is contingent on the following: granting of appropriate Visa by the Department of Immigration and Citizenship" In applying for Permanent Residency, you incurred costs including application fees, travel costs to obtain necessary Police checks required for the application, and related document preparation costs.

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 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. Expenses are considered to have been incurred in gaining or producing assessable income where they are related to the production of assessable income. Expenses incurred to obtain a permanent residency visa are not expenses incurred in the production of assessable income. The expenses are incurred to place you in a position to be able to earn income, rather than in the completion of your work related duties. Alternatively, the predominant purpose of obtaining the visa is to allow you to remain and work legally in Australia rather than earn assessable income. Therefore the expense of obtaining the visa is considered private or domestic in nature. As the expenses incurred in obtaining the visa are not incurred in gaining or producing assessable income or are private or domestic in nature, they are not tax deductible.