Edited version of private advice

Authorisation Number: 1052395803913

Date of advice: 23 June 2025

Ruling

Subject: Self-education expenses

Question 1

Are the training course, associated flights, and study materials deductible under section 8-1 of the Income Tax Assessment Act 1997 ('ITAA 1997')?

Answer 1

Yes.

Question 2

Are the security clearance and fingerprints, visa, verification of current licence and medical expenses deductible under section 8-1 of the ITAA 1997?

Answer 2

No.

This private ruling applies for the following period:

XX June 20XX.

The scheme commenced on:

XX July 20XX.

Relevant facts and circumstances

You are an Australian resident for taxation purposes.

In 20XX you began employment as an airline pilot at the Company on a full-time, permanent, basis.

Your current position is based in Australia.

In 20XX you signed an Agreement with the Company, agreeing to undertake internal training.

Upon successful completion of the internal training, your employment status will upgrade.

You commenced the internal training in May 20XX.

The internal training is fully funded by the Company.

In addition to the internal training, you are undertaking a self-funded training course in Country B with a training service ('the training').

The training service is independent to the Company.

The training includes the following:

•                     Certification Training program at a cost of $XX.

•                     A written knowledge test at a cost of $XX.

•                     An Airbus type rating at a cost of $XX.

You have incurred the additional associated costs:

•                     Flights to Country B at a cost of $XX.

•                     Study material at a cost of $XX.

•                     TSA clearance and fingerprints at a cost of $XX.

•                     Visa at a cost of $XX.

•                     Verification of Current Licence at a cost $XX.

•                     Medical certification at a cost of $XX.

The training is not required by the Company for your employment status to be upgraded.

The Verification of Current Licence is not required for your current employment.

The Medical certification is not requirement for your current employment.

You have not incurred any costs associated with the training yet.

You intend to fund the training and associated costs through personal savings.

You are taking planned annual leave from your role with the Company to complete the training.

Duties

At the time of undertaking the training, your duties will include:

•                     Safe operation of aircraft under IFR and RPT operations;

•                     Leadership and command of flight crew during scheduled airline services;

•                     Execution of normal and non-normal procedures, including emergency decision-making;

•                     Management of automation systems, situational awareness, and fuel planning;

•                     Application of standard operating procedures and adherence to company policy and regulations;

•                     Crew Resource Management (CRM) and Threat and Error Management (TEM) during all phases of flight;

•                     Oversight of pre-flight planning, aircraft documentation, weight and balance, and passenger safety;

•                     Post-flight responsibilities, including reporting of technical issues and debriefing;

•                     Upholding the safety, security, and customer service standards of the Company;

•                     The start, continuation, diversion and end of a flight by the aircraft;

•                     The operation and safety of the aircraft during flight time;

•                     The safety of persons and cargo carried on the aircraft;

•                     The conduct and safety of members of the Aircrew on the aircraft;

•                     The Pilot in Command shall have final authority as to the disposition of the aircraft while they are in command; and

•                     The maintenance of discipline by all persons on board.

The training relates to these duties through the following:

•                     High-performance jet handling transferable to large turboprop command environments;

•                     Advanced CRM, TEM, and multi-crew coordination, vital for leadership in two-crew operations;

•                     Automation management, standardised SOP discipline, and international procedural exposure;

•                     Enhanced decision-making, workload management, and leadership in command roles;

•                     Experience with training standards aligned with global best-practice airline safety frameworks.

The training will not result in an increase in your salary or remuneration.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Question 1

Summary

Your self-education expenses are deductible under section 8-1 of the ITAA 1997. The expenses you incur to complete the training will allow you to improve the knowledge and skills required to carry out your current income-earning activities. The training, the flights to Country B and the costs of incurring study materials have the relevant connection to your income earning activities, and did not enable you to get employment, to obtain new employment or to open up a new income-earning activity.

Question 2

Summary

The security clearance and fingerprints, visa, verification of current licence and medical certification expenses are not an allowable deduction under section 8-1 of the ITAA 1997 as the expenses do not have the relevant nexus to your current employment.

Detailed reasoning

Section 8-1 of the ITAA 1997 allows a deduction for any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income however it will not be allowed if the expense is of a private or domestic nature.

The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL v. Federal Commissioner of Taxation (1949) 78 CLR 47, the High Court stated that:

'For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing the assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing assessable income" mean in the course of gaining or producing such income.'

The cost of applying for a visa and obtaining the relevant clearance to enter a foreign country is considered to be a requirement for international travel and is private in nature. The expense is not incidental and relevant to your current employment duties as an airline pilot and was not incurred in the course of gaining or producing your assessable income as an employee.

The purpose of obtaining the visa and security clearance and fingerprints is in regard to entering Country B and is considered a pre-requisite to travel and attend the course in the Country B, rather than being a cost of the course of study itself.

Similarly, the verification of your current licence and medical certification expenses are considered to be pre-requisites to the training and are not incurred in the course of gaining or producing your assessable income.

You are therefore not entitled to a deduction for the costs associated with the security clearance and fingerprints, visa, verification of current licence and medical certification under section 8-1 of the ITAA 1997.