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Taxation Determination

TD 92/162

Income tax: is the cost of a corporate box with associated advertising signs allowable as a deduction?

  • Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

FOI status:

may be releasedFOI number: I 1213341

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.
[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]

1. The cost of a corporate box is not deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)[1] to the extent to which the expenditure is in respect of the provision of entertainment (section 32-5).

2. For the purposes of Division 32, the Commissioner may treat expenditure on a corporate box as having been incurred in respect of the provision of entertainment to such extent as the Commissioner considers reasonable (section 32-75). Expenditure on a corporate box which the Commissioner treats in that way is not deductible under section 8-1.

3. We generally accept that 5% of the total cost represents a proportion applicable to advertising, and 95% of the total cost is in respect of entertainment. However, we acknowledge that in some cases a taxpayer may be able to satisfy us that a higher proportion of the total cost is applicable to advertising.

4. In applying section 32-75 relevant factors that we consider in determining the amount of the deduction to be allowed include the size, location and prominence of the advertising signs, attendances, the type and extent of media coverage and the nature of the facilities provided in the box.

Commissioner of Taxation
01/10/92

Footnotes

All subsequent references are to the ITAA 1997 unless otherwise indicated.

Previous Draft No. TD 92/D99

References

ATO references:
NO BAN TD 5

ISSN 1038 - 3158

Subject References:
advertising & promotion
deductions & expenses
entertainment expenses

Legislative References:
ITAA 1997
ITAA 1997 8-1
ITAA 1997 Div 32
ITAA 1997 32-5
ITAA 1997 32-75

TD 92/162 history
  Date: Version: Change:
  1 October 1992 Original ruling  
You are here 28 April 2010 Consolidated ruling Addendum

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