Taxation Determination
TD 93/4
Income tax: is a local government councillor who receives an allowance or other remuneration subject to the substantiation requirements of sections 82KZ and sections 82KUA to 82KY in relation to expenses he or she incurs in carrying out council duties?
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FOI status:
may be releasedFOI number: I 1213811| 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. A councillor who receives an allowance or other remuneration and incurs expenses whilst performing council duties must comply with the substantiation requirements relating to car expenses, travel expenses and eligible expenses in relation to meal and travel allowances. He or she is not required to substantiate other expenses but must be able to show that he or she has incurred those expenses to be entitled to a deduction.
2. Sections 82KUA to 82KY of the Income Tax Assessment Act 1936 require taxpayers to substantiate car expenses in certain circumstances.
3. Section 82KZ provides that a deduction is not allowable for travel expenses, employment-related expenses and eligible expenses in relation to a meal or travel allowance unless documentary evidence is obtained. An 'employment-related expense' is defined in section 82KT as an expense incurred in producing salary or wages (but not including a car expense, a travel expense or an eligible expense in relation to a meal or travel allowance). According to paragraph (pa) of the definition of 'salary or wages' in subsection 221A(1), payments by way of remuneration or allowances to members of a local governing body are not "salary or wages". Therefore, any expenses (other than car and travel expenses and eligible expenses in relation to a meal or travel allowance) incurred by a local government councillor in performing council duties cannot be 'employment-related expenses'. They are not required to be substantiated under section 82KZ, although, if required, the councillor must be able to prove that he or she has incurred that expenditure.
Example:
A councillor receives an allowance of $8000. He or she incurs the following costs in performing council duties : home office expenses $300, car expenses $4000 , travel expenses $500 telephone expenses $200.
The councillor must substantiate the car and travel costs to be allowed a deduction. He or she need not substantiate the home office and telephone expenses to be allowed a deduction, but, if required, must be able to prove that those expenses were incurred.
Commissioner of Taxation
21/01/93
Previously issued as Draft TD 92/D199
References
ATO references:
NO MPS 541/1
Subject References:
car expenses;
employment-related expenses;
local government councillors;
meal allowances;
substantiation;
travel allowances;
travel expenses;
Legislative References:
ITAA 82KT;
ITAA 82KUA;
ITAA 82KY;
ITAA 82 KZ,
ITAA 221A(1)(pa)
| Date: | Version: | Change: | |
| You are here | 21 January 1993 | Original ruling | |
| 11 July 2012 | Withdrawn |