Edited version of private advice

Authorisation Number: 1051674125895

Date of advice: 08 May 2020

Ruling

Subject: Self-education expenses - MBA

Question

Are your tuition fees, and travel, parking and stationery expenses, relating to your Masters of Business Administration course at XXX University, deductible?

Answer

Yes. Your expenses meet the requirements in Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business.

This ruling applies for the following period.

Year ended 30 June 2019.

The scheme commences on:

1 July 2018

Relevant facts and circumstances

You are employed full time as a Senior Management Consultant.

Your employer:

Has not reimbursed any of your fees.

Is supportive because the course is so useful in your role.

Your role in management consultancy involves designing and implementing projects in many fields and industries. You provided the following job description:

Ability to do a detailed design specification for complex requirements.

Ability to conduct detailed estimates for complex requirements.

Ability to interpret complex requirements and build corresponding best practice solutions including unit testing with no supervision.

Part of pre-sales team giving demonstrations and answering technical questions.

Supervise 1-2 senior consultant level team members.

Perform QA and testing across team members' work.

Begin to service new opportunities as you become aware of them.

Deliver internal knowledge sharing sessions.

Ability to identify the best solution for client requirements

Your employer provided a letter advising the following:

XXX assumes responsibility for the design and delivery of projects. We believe XXX's contribution and future career prospects will improve significantly with enhanced entrepreneurial leadership skills and a broader understanding of strategic planning and commercial decision-making. XXX's decision to pursue an MBA is an initiative that is recognised and respected within the organisation, and we believe that the skills and experience acquired whilst undertaking a Masters of Business Administration will add significant value to XXX's current role as senior consultant, and provide them with the following skills:

Ability to manage a larger team of senior consultants.

Own client relationship without management assistance.

Own sales targets across their set of accounts and identify new opportunities and with the assistance of the sales team close them.

Continue to develop your network including presenting at industry events.

Lead to technical pre-sales opportunities.

Mentor new staff members.

Ability to handle client relationships with management assistance.

You are studying a Masters of Business Administration part-time at XXX University.

The course details are as follows:

Core units.

1.    Leadership social responsibility and ethics.

2.    Financial accounting.

3.    Managing people.

4.    Managerial economics.

5.    Global business economics.

6.    Business strategy.

7.    Financial management.

8.    Data analysis.

9.    Marketing.

10.  Operations.

11.  Business in complex environments.

Elective units

1.    Supply chain analysis.

2.    Supply chain management.

3.    Corporate strategy.

4.    Marketing strategy. Implementation of strategy.

5.    Predictive analytics.

6.    Negotiation.

You provided the following to explain why you undertook the study:

This course is rich in management and business subjects which improve your ability to manage people, better understand the current business environment, and manage the client relationship.

Strategy subjects improve your skills in design and in implementing strategic projects with clients. As a management consultant, designing and implementing strategic projects is the main requirement of the job, and this course improves your skills in designing and implementing strategic projects across all industries.

You have elected to enrol in supply chain units because you have been involved in many supply chain projects recently. This course will help you deliver similar projects more efficiently and with higher quality leading to better client relationships.

Data Analysis and Predictive Analysis courses also enhance your skills to excel in projects such as sales forecasting and merchandise planning, many of which you have already delivered. This course will help you deliver similar projects more efficiently, and with high-quality, leading to better client relationships.

You paid for the course through FEE-HELP.

You have incurred expenses in travelling by car from your home to the university and back. You undertake this trip twice a week.

You have incurred expenses for on street parking when attending the university. You parked in the street because it was the cheapest option in the area.

You incurred expenses for pens and exercise books which you have used in your study.

Relevant legislative provisions

Income Tax Assessment Act 1997