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Edited version of your written advice
Authorisation Number: 1051347226707
Date of advice: 5 March 2018
Subject: Allowable deductions
Question
Are you entitled to a deduction for the cost of your post office box that is exclusively used for your business purposes?
Answer
Yes
This ruling applies for the following period:
Year Ending 30 June 20XX
Year Ending 30 June 20XX
Year Ending 30 June 20XX
Year Ending 30 June 20XX
Year Ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
I am a sole trader.
Upon registering my business name with ASIC, I found that they require all businesses to have a physical address to deliver documents. This address will be displayed publicly (i.e. on their website).
Due to ongoing harassment issues, ASIC have allowed me to use a Postal Office Box (PO Box) as my business address. See the ASIC emails and Suppression of Business Details forms for more details.
I have now rented a PO Box to use for my business.
If ASIC did not require the business address to be displayed publicly and I was not the subject of ongoing harassment, I would not have rented the PO Box. I would have just used my residential address.
The cost to rent the PO Box is necessarily incurred for my business and ensures I can remain as a registered business. The cost is necessary incurred in me gaining or producing income from my business and is not a capital expense.
The facts of my case are distinguishable from the following private rulings with authorization numbers: XXXXXXXXXXXXX and XXXXX. The main distinguishing factors are that I am renting a PO Box in order to satisfy ASIC requirements that I have a business address that can be displayed publicly.
The principles of TD 93/115 referred to in the ruling above do not apply to me as I had no choice but to rent a PO Box for my business.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 8-1(1)
Reasons for decision
Income Tax Assessment Act 1997 subsection 8-1(1)
You can deduct from your assessable income any loss or outgoing to the extent that:
(a) it is incurred in gaining or producing your assessable income; or
(b) it is necessarily incurred in carrying on a *business for the purpose of gaining or producing your assessable income.
Division 35 prevents losses from non-commercial business activities that may contribute to a tax loss being offset against other assessable income.
Operating expenses are the expenses you incur in the everyday running of your business – such as office stationery, renting office premises, and salaries or wages. These expenses are sometimes called working or revenue expenses.
You can generally claim a deduction for most operating expenses in the same income year you incur them.
In your situation, your PO BOX is required and exclusively used for your business and therefore is an allowable deduction.