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Edited version of your private ruling
Authorisation Number: 1012468002902
Ruling
Subject: Expenses - managing tax affairs
Question
Are you entitled to claim the cost of the enrolment fee for a taxation course as a cost of managing tax affairs?
Answer
No
This ruling applies for the following period
Year ending 30 June 2013
The scheme commences on
1 July 2012
Relevant facts and circumstances
You enrolled in a taxation course as part of a Diploma.
The topics covered in the course are as follows:
· Introduction to tax planning
· Tax on income earned
· Tax on investment income
· Tax and superannuation
· Fringe benefits tax, and
· Goods and services tax.
The provider of this course describes the course as follows:
The course provides students with an insight into providing complex advice to clients on the Australian taxation system, income and investment tax, Capital Gains Tax, and investment gearing amongst other areas.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 25-5
Reasons for decision
Section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that certain tax-related expenses are deductible.
Paragraph 25-5(1)(a) of the ITAA 1997 provides that a taxpayer can deduct expenditure they incur to the extent that the expenditure is for managing tax affairs.
The expression 'tax affairs' is defined in section 995-1 as 'affairs relating to tax' but the Act does not define the meaning of 'managing tax affairs'.
It is considered that, for the purposes of section 25-5 of the ITAA 1997, managing tax affairs includes activities required to prepare income tax returns.
In the example provided in ATO Interpretative Decision ATO ID 2003/955, the taxpayer attended a tax return preparation course which provided information to assist the taxpayer with the preparation of their tax return. The only use for the information in the course was for the preparation of an income tax return. The cost of the tax return preparation course was considered a cost associated with preparing the taxpayer's tax return and therefore was deductible as a cost of managing their tax affairs under section 25-5 of the ITAA 1997.
In your case, the purpose of the course is to provide you with an insight into providing complex advice to clients on tax matters. The course is not a course where the use for the information is only to prepare an income tax return and the enrolment cost for the course would not be considered a cost associated with the preparation of your tax return. The enrolment cost is not deductible under section 25-5 of the ITAA 1997 as a cost of managing your tax affairs.
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