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Edited version of your written advice
Authorisation Number: 1013107439831
Date of advice: 24 October 2016
Ruling
Subject: Whether the entity is entitled to a deduction for professional fees
Question
Is the entity entitled to a deduction for fees paid for professional services provided to the entity under section 8-1 of the Income Tax Assessment Act 1997?
Answer
Yes
This ruling applies for the following periods
Year ending 30 June 20YY
The scheme commenced on
1 July 20XX
Relevant facts and circumstances
The entity will pay for professional services provided to it with respect to the income earning activity it undertakes.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) discusses general deductions.
Subsection 8-1(1) of the ITAA 1997 states you can deduct from your assessable income any loss or outgoing to the extent that:
a. It is necessarily incurred in gaining or producing your assessable income; or
b. It is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income.
Subsection 8-1(2) of the ITAA 1997 states however, you cannot deduct a loss or outgoing under this section to the extent that:
a. It is a loss or outgoing of capital, or of a capital nature; or
b. Is it a loss or outgoing of a private or domestic nature; or
c. It is incurred in relation to gaining or producing your exempt income or your non-assessable non-exempt income; or
d. a provision of the Act prevents you from deducting it.
The entity is entitled to claim the fees charged as a deduction under section 8-1 of the ITAA 1997 as it is incurred in earning its assessable income and is not excluded under subsection 8-1(2) of the ITAA 1997.
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