ATO Interpretative Decision
ATO ID 2002/484
Income TaxPay TV expenses
FOI status: may be released
This document has changed over time. View its history.
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Is the taxpayer, an accountant, entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 for pay TV subscription fees paid to access a professional education channel?
Yes, there is a sufficient nexus between the income producing activities of the taxpayer and the content of the pay TV channel so that the subscription fee is an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997. The connection fee however, is a capital expense and not an allowable deduction. The subscription fee for the base pay TV channels is private expenditure under paragraph 8-1(2)(b) of the Income Tax Assessment Act 1997 and is not an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997.
The taxpayer is employed as an accountant and subscribes to pay TV in order to access a professional education channel. The professional education channel is a tier channel and is not included in the standard base package supplied by the pay TV operator. The professional education channel has received accreditation from the Accountant's Governing Body to deliver content that specifically meets the needs of its members and does not show any content of an entertainment nature.
The taxpayer incurs the following expenses, connection fee; subscription for base package and additional subscription for the professional education channel.
Reasons for Decision
In order for an expenditure to be deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997), it must have the essential character of an outgoing incurred in gaining assessable income (Lunney v. FCT (1958) 100 CLR 478). There must be a sufficient nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income (Ronpibon Tin NL v. FCT (1949) 78 CLR 47). The expenditure must not be capital, private or domestic in nature.
The base package provided by the pay TV operators is an entertainment product and is essentially of a private or domestic nature. The subscription fee for the base product would therefore not qualify as an allowable deduction under section 8-1 of the ITAA 1997.
Any initial connection cost or one-off membership fee will not be an allowable deduction as they are of capital and/or private nature (Case M53 80 ATC 357; (1980) 24 CTBR(NS) 234).
Taxation Ruling TR 98/14 Income tax: employee journalists - allowances, reimbursements and work related deductions (TR 98/14) discusses whether a deduction is allowable for Pay TV expenses by journalists. The TR 98/14 states that even though a taxpayer may be able to use part of the information obtained in the course of their work, the benefit gained is usually remote and the proportion of the expense that relates to work is incidental to the private expenditure. However it also provides that in some instances a journalist may be required to access pay TV as a direct consequence of his/her employment.
The content of the education program has received accreditation from the Accountant's Governing Body and the content of the program specifically meets the needs of its member accountants. The entire education channel relates to the taxpayer's work and is incidental and relevant to the taxpayer's employment as an accountant. The taxpayer is entitled to a deduction for the additional subscription fee for access to the education channel under section 8-1 of the ITAA 1997.
|Date of Amendment||Part||Comment|
|27 October 2017||Issue||Reword the sentence from 'Can a taxpayer claim' to 'Is the taxpayer entitled to'|
|Replace 'For' with 'for'|
|Add 'an' before 'expenditure'|
|Add additional wording 'allowable' before 'deduction';|
|Replace 'one off' with 'one-off';|
|Singularise 'membership fees';|
|Replace 'a' with 'of'|
|Replace 'expense' with 'nature'|
|Replace '1998/14' with '98/14';|
|Add 'the' before TR 98/14;|
|Reword the sentence 'it is also provided' to 'it also provides';|
|Replace 'their' with 'his/her';|
|Add 'education' before 'channel';|
|Reword the sentence 'will be able to claim' to 'is entitled to'.|
|Minor style amendments.|
Income Tax Assessment Act 1997
Lunney v. FCT
(1958) 100 CLR 478
(1949) 78 CLR 47 Case M53
80 ATC 357
Related Public Rulings (including Determinations)
Previously Released as CDS10390
Deductions & expenses
Continuing professional development expenses
Private or domestic expenses
Self education expenses
Work related expenses
Date reviewed: 10 October 2017