Edited version of private advice

Authorisation Number: 1052453353605

Date of advice: 26 September 2025

Ruling

Subject: Deductions - work-related expenses

Question

Can the legal fees, medical examination costs, and English language proficiency test fees incurred in connection with my subclass XXX visa application be claimed as tax-deductible work-related expenses?

Answer

No

This ruling applies for the following period:

Period Ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You held a XXX (subclass XXX) visa.

You are currently employed full-time as a researcher at an Institute of Higher Learning in Australia.

In 20XX you applied for the XXX Grant. This grant is one of Australia's most prestigious research funding opportunities. It is a critical pathway for researchers to establish themselves as independent research leaders and secure long-term career progression.

A key eligibility requirement for the XXX Grant (20XX) is that applicants must be either:

•       Australian citizens,

•       New Zealand citizens holding a Special Category Visa, or

•       Permanent residents of Australia at the time of grant acceptance and throughout the funding period.

In 20XX you applied for a permanent (subclass XX) visa to meet the eligibility requirement for the grant and secure competitive research funding.

Your employer covered the cost of the visa application fee. The following expenses directly related to the visa application process were not reimbursed by your employer and were incurred by you personally:

•       Legal fees for immigration advice and application preparation

•       Medical examination costs required for the visa

•       English language proficiency test fees, as mandated by the visa criteria.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

It is well established that the words 'in gaining or producing assessable income' are to be understood to mean 'in the course of' gaining or producing assessable income and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income.

The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL v. Federal Commissioner of Taxation (1949) 78 CLR 47, the High Court stated that:

"For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing the assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing assessable income" mean in the course of gaining or producing such income."

According to ATO Interpretative Decision ATO ID 2002/208 Deductibility of visa expenses - temporary business visa to remain in Australia, visa-related expenses (including legal fees, medical exams, and labour market testing) are not deductible under section 8-1 of the Income Tax Assessment Act 1997. The reason is that these expenses are considered private or domestic in nature, and not directly incurred in gaining or producing assessable income.

In your case you incurred expenses for associated costs to obtain a visa to become a permanent resident of Australia and meet the eligibility criteria for a research grant. The expense was not incurred in the course of gaining or producing your assessable income and are considered private in nature. Therefore, you are not entitled to a deduction for the costs associated with your Australian visa under section 8-1 of the ITAA 1997.

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