Document ID: chunk:federal_register_of_legislation:C2004A00662:clause:1_3:p10
Version: federal_register_of_legislation:C2004A00662
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 10/20)
Character Range: 25644–28500

paid
86‑85 Deduction entitlements of personal services entities for amounts included in an individual's assessable income
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 Law;
 (d) any fee or charge payable by the entity to an *Australian government agency for any licence, permission, approval, authorisation, registration or certification (however described) that is granted or given under an *Australian law.

 (3) However, paragraph (2)(c) does not include any payment that the entity makes to an *associate.

86‑70  Car expenses

Cars used solely for business

 (1) Section 86‑60 does not stop a *personal services entity deducting a *car expense for a *car of which there is no *private use.

Other cars

 (2) Section 86‑60 does not stop a *personal services entity deducting:
 (a) a *car expense; or
 (b) an amount of tax payable under the Fringe Benefits Tax Assessment Act 1986 for a *car fringe benefit;
for a *car of which there is *private use. However, there cannot be, at the same time, more than one car for which such deductions can arise in relation to gaining or producing the same individual's *personal services income.

 (3) If there is more than one *car to which subsection (2) could apply at the same time, the entity must choose the car to which subsection (2) applies at that time. The choice remains in effect until the entity ceases to *hold that car.

Example: Continuing example 2 in section 86‑20: Assume