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Edited version of private ruling
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Ruling
Subject: Medical Assessment
Question
Are you entitled to a deduction for the cost of obtaining a "medical assessment certificate - fitness to drive"?
Answer
Yes.
This ruling applies for the following period:
Year ended 30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
You carry passengers in your employment.
In order to carry passengers you are required to obtain an endorsement to your Heavy Vehicle Drivers Licence.
You obtained your Heavy Vehicles Drivers Licence and endorsement some years ago.
The endorsement has to be renewed every two years.
Your duties have remained essentially the same for the last few years.
To renew the endorsement you are required to undergo a medical examination by your doctor.
The medical examination allows you to receive a "medical assessment certificate - fitness to drive" which is needed to renew the endorsement.
You have not been reimbursed for the expense.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Summary
A deduction is allowable for the expenses incurred in renewing the endorsement to your Heavy Vehicles Drivers Licence.
Detailed reasoning
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.
The cost of acquiring or renewing a driver's licence is not an allowable deduction as it is considered a capital or private expense. This principle is not altered if the holding of a driver's licence is a condition of employment (Taxation Determination TD 93/108).
Some employees may need an endorsed licence to perform their duties. Where there is an additional cost in obtaining an endorsement for income earning purposes, this cost is generally an allowable deduction.
Taxation Ruling TR 95/19 states "a deduction is allowable for the expenses associated with medical examinations for the renewal of relevant licences. These expenses include the cost of travel to and from the medical practitioner."
Although TR 95/19 relates to airline employees, the principles are relevant in your circumstances.
In your case you incurred expenses in getting a medical examination in order to renew the endorsement on your Heavy Vehicle Drivers Licence which is a requirement of your employment. The expenses incurred in undertaking the medical examination are considered to be sufficiently related to your assessable income and are not capital or private in nature. Therefore a deduction is allowable under section 8-1 of the ITAA 1997.