Taxation Ruling

IT 2062

Special levies paid by employees to a trade union or professional association

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FOI status:

May be releasedFOI number: I 1115282

PREAMBLE

This office has recently been asked to consider whether an income tax deduction is allowable for compulsory levies imposed by a trade union to assist families of workers suffering financial difficulties as a result of employees being on strike or having been laid off by their employers.

RULING

2. As previous Income Tax Rulings illustrate, where levies are paid by employees to a trade union or professional association it is necessary to have regard to the purposes for which the payments are made in order to determine whether they satisfy the terms of sub-section 51(1). It is not decisive that the levies may be compulsory. What is important is the connection between the payment of the levy and the activities by which the assessable income of the employee is produced.

3. Levies made specifically to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off by their employers are not considered to be allowable deductions under sub-section 51(1) - they are not sufficiently connected with the activities by which the assessable income is produced to meet the requirements of the sub-section.

COMMISSIONER OF TAXATION
24 October 1983

References

ATO references:
NO J35/15 P5 F300

Date original memo issued:
11.07.83

Related Rulings/Determinations:

IT 2062W
IT 298
IT 299
IT 327
IT 2016

Subject References:
LEVIES
TRADE UNIONS
PROFESSIONAL ASSOCIATION

Legislative References:
51
73