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Ruling
Subject: Education expenses
Question
Are you entitled to a deduction for the expenses you will incur for your employee's education costs and allowances?
Answer
Yes
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commenced on:
1 July 2011
Relevant facts and circumstances
You are proposing to financially support an employee undertaking an industry related degree.
The expenses will include course fees, accommodation fees and flights.
The employee will continue to work directly for the company in between university terms.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 allows you a deduction for any loss or outgoing that is incurred in gaining or producing your assessable income, or is necessarily incurred in the carrying on of a business, to the extent that it is not of a private, capital or domestic nature.
Generally, expenses incurred in respect of salary or wages, bonuses, gratuities, allowances and fringe benefits paid to an employee are deductible to the employer.
In your situation, it is accepted that the expenses you incur in paying for your employee's education expenses have been necessarily incurred and you are entitled to a deduction for these costs.