Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the costs of maintaining your licence, and for other employment-related expenses?
Yes. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for losses and outgoings to the extent they are incurred in gaining or producing assessable income, provided the expenses are not capital, private or domestic in nature, or incurred in relation to exempt income. You are entitled to a deduction under section 8-1 of the ITAA 1997 for expenses incurred in maintaining your XX licence. These expenses have a sufficient and relevant connection to your income-earning activities, as the maintenance of your licence is necessary to continue performing your employment duties. A deduction is allowable where the expense is incurred by you, is not reimbursed, and directly relates to earning your assessable income. You must also keep appropriate records, such as receipts, to substantiate the expenses claimed. Expenses that are partly work-related and partly private must be apportioned, and only the work-related portion is deductible.
Where an expense relates to a depreciating asset used in performing your employment duties and the asset costs more than $300, you may claim a deduction for the decline in value of the asset over its effective life, rather than an immediate deduction for the full cost. This ruling is binding on the basis that you remain employed as a XXXX with XXXX after immediately completing the course. Should your employer or role change, you will need to consider applying for a new private ruling. This ruling applies for the following periods : DD MM YY DD MM YY The scheme commenced on: DD MM YY
You commenced employment with XXXX in DD MM YY and are currently employed in a senior technical role. Your employer provides services and products relating to the integration of complex systems. As part of your employment duties, you develop and execute testing activities and develop and direct personnel involved in operational testing. You also develop procedures, manuals and operational instructions for use in live environments. You hold a professional Licence issued by XXXX, which you obtained on DD MM YY. You have stated that the knowledge gained from obtaining and maintaining the Licence is directly applied in the performance of your employment duties.
In DD MM YY, you lodged a private ruling application in relation to the deductibility of expenses incurred in maintaining your Licence. As part of your application, you provided a letter from your employer confirming that your duties include developing testing procedures, developing operational instructions and amendments, and developing new features for use in operational environments. The letter also confirms that your understanding of operational environments supports the performance of these duties and requires detailed technical knowledge gained through formal training. You provided specific examples of how the knowledge gained from maintaining the Licence is used in your employment duties, including work relating to system upgrades that require the development of concepts of operation, detailed design, testing procedures and operational validation. This work is carried out through a combination of ground-based testing and live operational testing. Each year, you incur costs to maintain the currency and validity of your Licence and other employment-related requirements.
On DD MM YY, you confirmed that the organisational structure does not include a specialised role title previously referenced and that your current role continues to involve the development and execution of testing activities, review of operational manuals, and development of features for use in operational environments. You also confirmed that the employer letter provided in DD MM YY remains relevant despite the change in role title. You have stated none of the expenses are for private use.
Income Tax Assessment Act 1997 section 8-1