Private ruling: Work related expenses
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for a contribution to a professional association? | A1: Yes.

Relevant facts and circumstances: Your employer proposed to change the contracts that you would be subject to. The proposed new contracts would have resulted in reduced pay and less favourable employment conditions. You made a contribution to a professional association to fight against the changes. Contribution money was spent to pay legal fees, conduct meetings for members in relation to the ongoing legal negotiations and conduct a public awareness campaign.

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 to the extent to which they are capital or of a capital, private or domestic nature. Taxation Ruling TR 2000/7 Income tax: subscriptions, joining fees, levies and contributions paid to associations by individuals states that where contributions are paid by members to a professional association, what is important is the connection between the purpose for payment of the levy and the activities by which the assessable income of the member is produced. Example 9 in TR 2000/7 states: 51. Jeremy is a university lecturer. At his university the academics are requested to pay their Staff Association a one-off levy equal to one day's pay. This money is paid into the association's 'fighting fund'. The money paid into this fighting fund is then used by the Association to improve the members' salary and working conditions. The levy is not used for political purposes, but is used solely for protecting the interest of members, safeguarding their jobs and for obtaining legal advice or instituting legal proceedings on behalf of their members. 52. Given the purposes of the fund, it is considered that the necessary connection exists between the payment of the levy and the derivation of Jeremy's assessable income. A deduction for this levy is allowable to him under section 8-1 of the Act. In your case, you made a contribution to a professional association in order to maintain your pay and conditions. Your situation is comparable to that described in example 9 in TR 2000/7. Therefore, you are entitled to a deduction for the expenses incurred under section 8-1 of the ITAA 1997.