| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1012865988392
Date of advice: 26 August 2015
Ruling
Subject: Work related expenses
Question 1
Are you entitled to a deduction for the costs of obtaining Permanent Residency?
Answer
No.
This ruling applies for the following period:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You arrived in Australia on a 457 visa.
You were employed.
You applied for Permanent Residency and it was granted during the 2014-15 financial year.
Your employment contract states that "your appointment is contingent on the following: granting of appropriate Visa by the Department of Immigration and Citizenship"
In applying for Permanent Residency, you incurred costs including application fees, travel costs to obtain necessary Police checks required for the application, and related document preparation costs.
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 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.
Expenses are considered to have been incurred in gaining or producing assessable income where they are related to the production of assessable income.
Expenses incurred to obtain a permanent residency visa are not expenses incurred in the production of assessable income. The expenses are incurred to place you in a position to be able to earn income, rather than in the completion of your work related duties.
Alternatively, the predominant purpose of obtaining the visa is to allow you to remain and work legally in Australia rather than earn assessable income. Therefore the expense of obtaining the visa is considered private or domestic in nature.
As the expenses incurred in obtaining the visa are not incurred in gaining or producing assessable income or are private or domestic in nature, they are not tax deductible.