Edited version of private advice

Authorisation Number: 1051725146624

Date of advice: 23 July 2020

Ruling

Subject: Self-education expenses

Question 1

Are the tuition fees as part of an (MBA) you will be undertaking deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

Yes. Your self-education expenses are deductible, as it is accepted the study meets the requirements detailed in Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business. The amount of your deduction for self-education expenses may have to be reduced by $250. Further information about self-education expenses can be found by searching 'QC 31970' on ato.gov.au

Question 2

Is the associated travel, accommodation and meals expenses in relation to travel to the campus deductible under section 8-1 of the ITAA 1997?

Answer 2

Yes. The day-to-day costs incurred for accommodation and meals are generally a private, non-claimable expense unless you are:

·        participating in self-education activities, and

·        required to be temporarily away from home for one or more nights.

Any expenses incurred for a dual purpose will need to be apportioned. Further information about self-education expenses can be found by searching 'QC 16918' on ato.gov.au

This ruling applies for the following period:

Year ending 30 June 2021

Year ending 30 June 2022

The scheme commences on:

1 July 2020

Relevant facts and circumstances

You are employed as a senior international tax advisor.

You are a registered accountant.

Your role involves:

·        Managing in-country tax risks for subsidiaries in international locations,

·        Engaging with stakeholders including several departments that deal with major projects, turnkey contracts, and manage risks that arise for the business units and departments,

·        State agreement negotiations with foreign government bodies,

·        Contract negotiations, deal modelling and inform value proposition within contracts for international operations,

·        Inform external transfer pricing advisers on potential transfer pricing taxation consequences,

·        Tax collections throughout project life cycles, involving taxation of materials, minimum requirements of employment law, HR and related benefits conditions and wage tax costs,

·        Generate reports, develop business models, interpret international procurement models,

·        Articulate new internal governance policies and administrative processes to stakeholders,

·        Implement group tax policies, formulate commercially practical solutions for gathering tax data,

·        Assisting with all tax aspects of deal structures, negotiation positions, funding alternatives and earnout agreements relating to reorganisations, acquisitions, and providing solutions that meet sustainability conditions in state agreements,

·        Lobbying and persuasively promoting tax functions within the organisation's various subsidiaries and departments,

·        Assist with issuing reports to board, including an understanding of board tolerance to risk, and senior stakeholder management, escalation protocols and tax risk reporting guidelines design and effectiveness reviews.

·        Analytical interpret systems, processes, flows, modelling of projects, and convey to in-country tax advisors to assess tax risks,

You have chosen to undertake study of an MBA at a business school for the world to expand your current experience and skills.

The course takes 14 to 17 months to complete and is offered at 3 campuses worldwide. You have chosen to complete your studies in the XYZ campus.

The core curriculum consists of 11 courses:

·        Financial Accounting

·        Prices and Markets

·        Uncertainty, Data, and Judgment

·        Managerial Accounting

·        Marketing

·        Macroeconomics

·        Process and Operations Management

·        Corporate Finance

·        International Political Analysis

·        Strategy

·        Leading Teams and Organisations

You will study remotely and only travel to campus for residential sessions every few months.

Your employer is supporting your study by approving leave required for study purposes. Where accumulated leave is exhausted your employer agrees to grant leave without pay.

You will not receive government assistance from either the HELP or HECS programs.

Your employer has no budget to reimburse you for any self-education expenses.

You will fully fund the expenses associated with the study including course fees, travel and accommodation.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1