ATO Interpretative Decision
ATO ID 2002/70 (Withdrawn)
Income Tax
Deductibility of internet and data access costs incurred for share investing activitiesFOI status: may be released
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This ATO ID is superseded by TD 2004/1.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for internet and share data access costs?
Decision
Yes. The taxpayer is entitled to claim a deduction under section 8-1 of the ITAA 1997 for internet and share data access costs to the extent that these are incurred in relation to the income producing activity of share investing.
Facts
The taxpayer is a share investor and receives income from share trading and dividends. The taxpayer incurs monthly access charges to an internet share market data service as well as internet and telephone expenses involved in the daily download of share data. The taxpayer used internet access for both business and private purposes and has claimed only the business proportion of the relevant costs.
Reasons for Decision
The taxpayer incurs costs in using the internet to download data from a share market service and for trading purposes. The costs are incurred in the gaining or producing of the assessable income.
Taxation Ruling TR 98/14 discusses the deductibility of Internet Access costs for employee journalists. Paragraph 95 states:
'...when an employee journalist utilises the information from the Internet for the purposes of researching a story or otherwise in the course of carrying out their duties, the work-related portion of the fee paid to the Internet Service Provider is an allowable deduction.'
Furthermore, under the ruling where the internet is used for both business and private purposes the costs will need to be apportioned accordingly.
The principles in the ruling apply equally to a taxpayer carrying on operations as a share investor. Therefore, the taxpayer is entitled to claim a deduction in respect of costs incurred for the use of the internet for income producing purposes. The expenditure incurred is deductible under section 8-1 of the ITAA 1997.
Date of decision: 20 November 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Related Public Rulings (including Determinations)
TR 98/14
Keywords
Deductions & expenses
Telephone expenses
Shares
Internet
ISSN: 1445-2782
| Date: | Version: | |
| 20 November 2001 | Original statement | |
| You are here | 25 November 2004 | Archived |