Disclaimer This edited version has been archived due to the length of time since original publication.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 your private ruling
Authorisation Number: 1012449512858
Ruling
Subject: Self education expenses
Question and answer:
Are you entitled to claim a deduction for self education expenses?
No
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commences on:
1 July 2011
Relevant facts and circumstances:
You are being paid by a foreign educational institution to study in Australia.
The condition for receiving payment is that you have to return to the foreign educational institution to work.
Relevant legislative provisions:
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)
Schedule X Article Y of the Income Tax Agreements Act 1953
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, relate to the earning of exempt income or are precluded from deduction by another provision of this Act.
For a deduction to be allowable there must be assessable income that relates to the deduction.
In determining the assessability of income for the purposes of the ITAA 1997 any provisions of relevant International Tax Agreements must be abided by.
Under the double tax agreement - "Where a student or a trainee, who is a resident of one of the Contracting States or who was a resident of that State immediately before visiting the other Contracting State and who is temporarily present in the other State solely for the purpose of their education or training, receives payments from sources outside the other State for the purpose of their maintenance, education or training, those payments shall be exempt from tax in the other State."
As your income is exempt under the relevant double tax agreement no deduction for self education expenses is allowable.