Private ruling: Deduction for visa
Published: October 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for the cost of obtaining a visa? | 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 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.

Relevant facts: You came to Australia holding a Temporary Work Visa in 2012 which was sponsored and paid for by your employer. | Your visa enables you to work until a certain date. | To allow you to continue being employed you are required to get a permanent residency visa. | You have incurred expenses associated with the permanent residency visa which was incurred solely for the purpose on continuing to earn employment income with your employer. | You were not reimbursed by your employer for the expense.