Edited version of private advice

Authorisation Number: 1051979981126

Date of advice: 10 May 2022

Ruling

Subject: Self-education expenses

Question

Are the expenses incurred for the study of a Master of Business Administration deductible as self-education expenses as per section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997), including course fees incurred through the FEE-Help scheme?

Answer

Yes. The Commissioner accepts that the study has a direct connection to your income producing activities as per Taxation Ruling TR 98/9Income tax: deductibility of self-education expenses incurred by an employee or a person in business.

ATO Interpretive Decision ATO ID 2005/26 Income tax: Deductions: self education - course fees paid from FEE-HELP loan funds considers the deductibility of course fees incurred through the FEE-HELP scheme. Section 26-20 of ITAA 1997 precludes a deduction for student contribution amounts within the meaning of the Higher Education Support Act 2003. This includes amounts paid using the HECS-HELP scheme. It does not include the FEE-HELP scheme.

You can claim a deduction at the time you incur the expense. You cannot claim a deduction for repayments you make towards the FEE-HELP loan.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are employed as a Key Account Manager.

To obtain the position you were required to hold a Business Degree.

You are studying a Master of Business Administration (MBA) at Melbourne Business school at the University of Melbourne part time and will complete the follow subjects:

•         Business Essentials - Develop an essential foundation for becoming an effective business executive, including the skills for successfully completing more advanced subjects of the MBA program. You will gain a clear understanding of the key areas needed to successfully manage a business, including leading and managing people, growing demand, managing operations, and managing financial sustainability.

•         Leadership (0.5 subject) - Build leadership capability by developing your intrapersonal and interpersonal skills. Explore theoretical concepts and perspectives alongside practical exercises to prepare you for the challenges of leading in a complex environment.

•         Managerial Ethics and Business Environment (0.5 subject) - Find out how the societal context affects organisations and their strategies, as well as why managerial ethical problems frequently arise in the business context. Learn to evaluate business decisions by considering various stakeholders and the moral reasoning frameworks that can help you be more aware of ethical pitfalls.

•         Data Analysis - Gain the core skills to extract information from data in order to understand business processes and make better managerial decisions. You will learn quantitative analysis, analytical thinking and ways to measure and improve performance, which will build a framework for solving complex business problems and the foundation for advanced MBA subjects.

•         Managing People - Acquire the analytical skills to identify, diagnose and solve people-related challenges in organisations. You will use tools to examine different theoretical concepts and perspectives that underlie behaviour to improve organisational, group and individual outcomes in a practical manner.

•         Financial Accounting - Learn to interpret and analyse financial statements in order to extract useful information for better decision-making and assessing the financial health of an organisation. Accounting is the "language of business", and what you learn in this subject is essential for successfully completing other MBA subjects such as Finance, Strategy and Mergers and Acquisitions.

•         Managerial Economics - Discover the economic principles that underlie nearly all business functions, including finance, marketing, negotiations, accounting and strategy. You will discover tools and ways of thinking for assessing and evaluating different business options, understanding competition and different market structures, pricing new products, and negotiating winning deals.

•         Finance - Establish a solid foundation for valuing financial assets and selecting and managing investment projects. You will discover how to manage a firm to increase the wealth of shareholders, subject to fulfilling contractual and legal obligations to relevant stakeholders.

•         Marketing - Learn to manage market demand using proven demand‐side strategies. You will learn to recognise, create, grow and protect market‐based assets that influence demand and how marketing investments help develop and translate market‐based assets into outcomes that ensure an organisation's long‐term survival and success.

•         Operations - Discover the tools and frameworks to understand the role that the operations function plays in a firm's ability to compete effectively in the marketplace. You will focus on the design, management and continuous improvement of the business processes that help firms exceed customer expectations along measures such as cost, quality, flexibility and innovation.

•         Business Strategy - Come to grasp a general manager's role and responsibilities in formulating, assessing, and implementing strategy to gain sustainable competitive advantage. You will learn to diagnose and solve strategic business problems, organise the roles of values, clearly articulate the purpose for a strategy and plan against disruption.

•         MBA Capstone - In this final subject, you will revisit and consolidate the learnings from throughout your MBA journey as you prepare for what lies ahead in your career. As you reflect on your MBA experience, we'll look ahead to your future career aspirations, commitments, and transitions. This will serve as an opportunity to engage in extensive personal reflection and will provide you with tools to help navigate your career as it unfolds over the coming years.

You have accessed the FEE-Help scheme to pay for the study and are yet to make payments towards the loan.

You did not receive financial support from your employer to assist with the course fees.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 26-20