Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 11/34)
Character Range: 1687396–1690317

the quarter ending on 30 June 2001. NewIT's income for that period (after taking into account any reductions under sections 86‑20 and 86‑25) includes $20,000 that is Ron's personal services income, and NewIT pays this to Ron on 12 July 2001.
 The $20,000 that Ron receives is assessable income for the income year ended on 30 June 2001.
 (2) However, this section does not affect the time at which the *personal services entity is treated as having paid the salary or wages.
Note 1: Therefore neither the timing of the entity's deduction for the payment, nor the timing of the obligation to withhold amounts under section 12‑35 in Schedule 1 to the Taxation Administration Act 1953, is affected.
Note 2: However, these payments are treated as relating to the preceding income year for the purposes of the rules relating to payment summaries, PAYG credits and PAYG withholding non‑compliance tax (see Subdivisions 16‑C, 18‑A and 18‑D in Schedule 1 to the Taxation Administration Act 1953).

Subdivision 86‑B—Entitlement to deductions

Table of sections
86‑60 General rule for deduction entitlements of personal services entities
86‑65 Entity maintenance deductions
86‑70 Car expenses
86‑75 Superannuation
86‑80 Salary or wages promptly paid
86‑85 Deduction entitlements of personal services entities for amounts included in an individual's assessable income
86‑87 Personal services entity cannot deduct net personal services income loss
86‑90 Application of Divisions 28 and 900 to personal services entities

86‑60  General rule for deduction entitlements of personal services entities
  A *personal services entity cannot deduct under this Act an amount to the extent that it relates to gaining or producing an individual's *personal services income, unless:
 (a) the individual could have deducted the amount under this Act if the circumstances giving rise to the entity's entitlement to deduct the amount had applied instead to the individual; or
Note: In particular, Division 85 specifies limits on an individual's entitlements to deductions relating to the individual's personal services income.
 (b) the entity receives the individual's *personal services income in the course of conducting a *personal services business.

86‑65  Entity maintenance deductions
 (1) Section 86‑60 does not stop a *personal services entity deducting an amount to the extent that it is an *entity maintenance deduction.
Note: See section 86‑25 for how entity maintenance deductions are offset against a personal services entity's income.
 (2) Each of these is an entity maintenance deduction:
 (a) any fee or charge payable by the entity for opening, operating or closing an account with an *ADI;
 (b) any deduction under section 25‑5 (about tax‑related expenses);
 (c) any loss or outgoing incurred in relation to preparation or lodgment of any document the entity is required to lodge under the Corporations Act 2001;
 (d) any fee or