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  • Calculating your deduction where the 12-month rule is satisfied



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If you incur prepaid non-business expenditure and its eligible service period is 12 months or less, and it ends on or before the last day of the next income year, you are entitled to deduct that expenditure in the income year it was incurred.

    Example: Deduction for non-business expenditure with an eligible service period of 12 months or less

    On 1 June 2002, Jasmin, an employed solicitor, paid $1,500 subscription for the provision of a monthly professional journal for the period 1 June 2002 to 31 May 2003. Because the thing to be done under the agreement is wholly provided within a 12-month period ending before the last day of the next income year, Jasmin is entitled to a deduction for the expenditure in 2001-02.

    End of example
    Last modified: 10 Dec 2019QC 27429