Edited version of private advice

Authorisation Number: 1051854913646

Date of advice: 23 June 2021

Ruling

Subject: Self-education expenses

Question

Are you entitled to a deduction for the tuition fees you will incur in relation to the Masters of Business Adminstration (MBA) course you will undertake overseas?

Answer

Yes. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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 earning exempt income.

Taxation Ruling TR 98/9 states self-education expenses are allowable as a deduction if your current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables you to maintain or improve that skill or knowledge. A deduction is also allowable if the education is likely to lead to an increase in income from your current income earning activities.

Based on the information provided, the MBA course you will undertake will meet the above requirements so that the course fees will be allowable deductions under section 8-1 of the ITAA 1997.

This ruling applies for the following period periods:

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

You are employed as a manager in a large firm. Your primary role and responsibilities are as follows:

•         Business development includeing sales pitch, proposal development, prototype development to help clients understand how advanced analytics can help them from both strategical and operational perspectives

•         People performance management, which includes setting professional goals for junior team members and manager under-performance or over-performance issues

•         Scoping, resources planning and budgeting for the projects

•         Progress management throughout the project life cycle, which includes managing any challenges or risk faced by the team, progress against timeframe

•         Delivering reports, developing models and building platforms according to the project scopes

•         Interpreting and communicating the value-add outcomes to the client

•         Articulating innovating initiatives to internal and external stakeholders.

You intend to undertake a MBA at a business school which will take up to 12 months to complete and is offered at two campuses worldwide with no part-time study option.

The MBA core curriculum consists of 12 units.

The course also offers a range of electives.

You have chosen to complete your study at the Country X and Country Y campuses.

You employer has granted you a 12 month career break and also leave without pay after your accumulated leave is exhausted.

Your employer will not reimburse you for the course fees and you are not seeking any government HELP assistance.

You have paid a deposit for the tuition fees.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1