• Legal database
Legal database

ATO Interpretative Decision

ATO ID 2001/741

Income Tax

Deductibility of truck sub-lease and running costs
FOI status: may be released

This version is no longer current. Please follow this link to view the current version.

  • This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the taxpayer entitled to claim a deduction for sub-leasing and running costs of a truck under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. The taxpayer is entitled to claim a deduction for sub-leasing and running costs of a truck under section 8-1 of the ITAA 1997.

Facts

The taxpayer was contracted to provide services to a transport company as a contractor.

As part of this contract, the taxpayer was required to supply a suitable vehicle to carry out the work and pay all associated costs.

The taxpayer sub-leased a truck to perform the work.

Reasons for Decision

As a contractor, the taxpayer would be regarded as carrying on a business. In carrying on the business the taxpayer was required to supply a truck and pay associated costs. These costs consisted of sub-lease and running expenses. The sub-leasing and running expenses would meet the requirements of paragraph 8-1(1)(b) of the ITAA 1997 as being necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.

The taxpayer is entitled to claim a deduction under paragraph 8-1(1)(b) of the ITAA 1997 for the sub-leasing and running costs incurred in operating the truck.

Date of decision:  31 October 2001

Year of income:  Year ended 30 June 2000

Legislative References:
Income Tax Assessment Act 1997
   section 8-1
   paragraph 8-1(1)(b)

Keywords
Deductions & expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  30 November 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 31 October 2001 Original statement
  11 November 2005 Archived

Back to top