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Edited version of your written advice
Authorisation Number: 1012976326126
Date of advice: 24 February 2016
Ruling
Subject: Deduction of Pre-Employment Expenses
Question
Are you entitled to a deduction for licence fees paid for your professional registration?
Answer
No
This ruling applies for the following period
Year ended 30 June 2015
The scheme commenced on
1 July 2014
Relevant facts
You recently migrated to Australia and commenced working in your profession shortly afterwards.
Prior to commencing working in Australia you had to receive the required accreditation from the appropriate authorities in Australia.
As part of this process you paid fees to different Australian authorities that regulate your profession prior to your arrival in Australia.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for a loss or outgoing which is incurred in gaining or producing assessable income, unless the loss or outgoing is capital, or is of a capital, private or domestic nature.
A deduction is not allowable under section 8-1 of the ITAA 1997 for fees paid to enable a taxpayer to be admitted to practise in a profession, as they are considered to be capital or of a capital nature (Taxation Ruling TR 95/9).
In your case, the expenses incurred by you in paying fees were incurred in order to obtain your professional registration. The registration gives you a right to work in your profession in Australia. The expense was not incurred in doing your work in your profession. The cost of registering is therefore capital or of a capital nature, and is not deductible under section 8-1 of the ITAA 1997.
Consequently you are not entitled to a deduction for the expenses.