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Edited version of your written advice
Authorisation Number: 1013139646519
Date of advice: 15 December 2016
Ruling
Subject: Deductions
Question and answer
Are you entitled to a deduction for compulsory weekly union election contributions?
No.
This ruling applies for the following periods:
Year ended 30 June 2016
The scheme commenced on:
1 July 2015
Relevant facts and circumstances
You are employed by a union.
You are required to make a weekly contribution of $X which is deducted from your salary to the union election fund for elections.
This payment is compulsory.
You are required to make this payment even if you are not contesting a union election.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
An expense is deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) if and to the extent to which it is incurred in gaining or producing your assessable income or in carrying on a business for that purpose. However you cannot claim a deduction for an expense that is of a capital, private or domestic nature.
A deduction is only allowable if an expense:
● is actually incurred
● meets the deductibility tests
● Satisfies the substantiation rules.
Taxation ruling 2000/7 (TR2000/7) looks at subscriptions, joining fees, levies and contributions paid to associations by individuals.
Paragraph 12 of TR 2000/7 states that the following levies and contributions are not allowable deductions under section 8-1 of the Act:
(a) Payments to, or to assist, a political party;
(b) Payments to provide overseas relief;
(c) Payments to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off by their employers; and
(d) Payments by salaried elected trade union officials into a general fund for the election of union officials.
Therefore the $X weekly compulsory contribution you make to the union election fund is not an allowable deduction.