Taxation Determination TD 93/83







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. Yes, factoring fees are allowable deductions under subsection 51(1), where : | Example: XYZ Ltd has book debts of $10,000. It enters into a factoring arrangement with its subsidiary, ABC Ltd. ABC Ltd acquires the debts from XYZ Ltd at face value less the agreed factoring fee of 5 percent of face value. | The $500 factoring fee is an allowable deduction under subsection 51(1), provided the factoring arrangement is comparable to normal commercial standards in the taxpayer's industry and there are no tax avoidance implications. | Commissioner of Taxation 13/5/93 | Previously issued as Draft TD 93/D13


Related rulings: IT 2538; IT 2432
Legislative references: ITAA S51(1)
Subject references: allowable deductions; factoring of debts; factoring fees