Taxation Determination TD 92/143







[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]: 1. No. There is insufficient connection between establishment expenses incurred by a company and the derivation of assessable income from its income producing activities for the expenses to be deductible under the first limb of section 8-1. The costs are not incidental or relevant to the operations or activities regularly carried on by a company for the production of its assessable income ( Ronpibon Tin NL v FC of T (1949) 78 CLR 47). | 2. Establishment expenses are not necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income under the second limb of section 8-1. The expenses do not have the character of a working expense or form part of the cost of a company's trading operations ( John Fairfax & Sons Pty Ltd v FC of T (1959) 101 CLR 30). | 3. Establishment expenses are outgoings on the business entity, structure or organisation or its ownership and are not deductible under section 8-1. They are outgoings of capital or of a capital nature. | Section 8-1 of the Income Tax Assessment Act 1997, to which this Determination refers, expresses the same ideas as subsection 51(1) of the Income Tax Assessment Act 1936. | Note: The Addendum to this Determination that issued on 5 May 1999 applies in relation to the 1997-98 or a later income year. | Commissioner of Taxation 20/08/92


Legislative references: ITAA 51(1) ITAA 1997 8-1
Case references: Ronpibon Tin NL v FC of T (1949) 78 CLR 47
Subject references: deductions stock exchange listing expenses