| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011661421044
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Theatre tickets
Are you entitled to a deduction for theatre tickets?
No.
This ruling applies for the following period:
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts and circumstances
You are a drama teacher.
You are required to undertake compulsory professional development in order to meet your teacher registration requirements.
Theatre viewing can contribute towards your professional development.
You consider viewing live theatre an essential part of your job so that you are able to learn about new plays and styles of theatre.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (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, or relate to the earning of exempt income.
There must be sufficient connection between the outgoing and the activities directed at gaining or producing assessable income. The decision in Ronpibon Tin N.L.Tongkah Compound N.L. v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 8 ATD 431; (1949) 4 AITR 236, confirms that for an outgoing to be deductible under section 8-1 of the ITAA 1997, a taxpayer has to establish that there is a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of the assessable income.
Taxation Ruling TR 98/9 sets out the Commissioner's views in respect of self education expenses. It states that self education expenses are deductible under section 8-1 of the ITAA 1997 if they have a relevant connection to the taxpayer's current income earning activities. TR 98/9 also states that the self education expenses are allowable as a deduction if:
· your income earning activities are based on the exercise of a skill or some specific knowledge and the subject of self education enables the taxpayer to maintain or improve that skill or knowledge
· the study of a subject of self education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future.
What is involved is a process of identifying the essential character of the expenditure to determine whether it is in reality an outgoing incurred in gaining or producing assessable income. The intention or purpose in incurring the expense may be an element in determining whether the expense is allowable.
Taxation Ruling TR 95/20 discusses deductions for employee performing artists and specifically mentions theatre tickets. The ruling states that a deduction is allowable for the costs of attendance at theatre or film performances if the performances have a content specifically related to the employee performing artist's current work. Costs associated with attendance at performances for general interest or entertainment or other private purposes are not an allowable deduction.
In your case, you attend live theatre shows. The fact that viewing live theatre improves your teaching skills or contributes towards your professional development does not in itself mean that the expenditure was incurred in gaining or producing assessable income. Attending theatre shows to improve your awareness of new theatre styles is too general to be considered directly related to your income earning activities.
Viewing live theatre shows is essentially of a private or recreational nature. In your case there is insufficient connection between the outgoing incurred and the gaining of your assessable income. As such you are not entitled to claim the cost of theatre tickets as a deduction.