INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 69   TAX-RELATED EXPENSES  

69(1A)   [Limited application of section]  

This section (other than subsection (7)) does not apply to the 1997-98 year of income or a later year of income. Subsection (9) does not apply to the use of property in the 1997-98 year of income or a later year of income.

Note:

Section 25-5 (Tax-related expenses) of the Income Tax Assessment Act 1997 deals with the deductibility of tax-related expenses.

69(1)   [Allowable deductions]  

Subject to this section, expenditure (other than expenditure of a capital nature) incurred by the taxpayer on or after 1 July 1989, to the extent to which the expenditure is in respect of a tax-related matter, is an allowable deduction for the year of income in which the expenditure is incurred.

69(2)   [Reference to tax-related matter]  

For the purposes of the application of this section to a taxpayer, a reference in this section to a tax-related matter is a reference to:

(a) the management or administration of the income tax affairs of the taxpayer; or

(b) compliance with an obligation imposed on the taxpayer by a law of the Commonwealth, insofar as that obligation relates to the income tax affairs of another taxpayer;

but does not include a reference to an offence-related matter.

69(3)   [Deemed not expenditure of capital nature]  

For the purposes of this section, expenditure incurred by the taxpayer in respect of a tax-related matter is not to be taken to be expenditure of a capital nature only because the income tax affairs concerned relate to matters of a capital nature.

69(4)   [Fees or commissions for professional advice]  

A deduction is not allowable under subsection (1) in respect of a fee or commission for professional advice concerning the operation of a law relating to taxation unless the advice is provided by a recognised professional tax adviser.

69(5)   [Expenditure not deductible]  

A deduction is not allowable under subsection (1) for expenditure that consists of:

(a) income tax; or

(b) an amount payable under Part VI ; or

(c) a financing cost in relation to an amount covered by paragraph (a) or (b).

69(6)   [Restriction on operation of section]  

A provision of this Act (including a provision of section 51 , other than subsection 51(1) ) that expressly prevents or restricts the operation of section 51 applies in the same way to this section.

69(7)   [Death of taxpayer]  

For the purposes of 25-5 (Tax-related expenses) of the Income Tax Assessment Act 1997 , where:

(a) a taxpayer dies during a year of income; and

(b) the trustee of the estate of the deceased taxpayer incurs expenditure on or after 1 July 1989 that, if it had been incurred by the taxpayer during his or her lifetime, would have been an allowable deduction to the taxpayer under that section;

then, in the assessment of the trustee upon the assessable income derived by the deceased taxpayer, the expenditure is to be taken to be expenditure incurred by the taxpayer during that year of income.

69(7A)   [Limited application of subsec (8)]  

Subsection (8) does not apply to an amount received in the 1997-98 year of income or in a later year of income if the amount is received as recoupment as defined by section 20-25 of the Income Tax Assessment Act 1997 .

Note:

Subdivision 20-A of the Income Tax Assessment Act 1997 applies instead.

69(8)   [Expenditure reimbursed, paid or recouped]  

If:

(a) a deduction has been allowed or is allowable under subsection (1) to a taxpayer for any expenditure; and

(b) that expenditure, or any part of it, is:

(i) reimbursed to the taxpayer; or

(ii) paid for the taxpayer by another person; or

(iii) recouped by the taxpayer from another person;

the assessable income of the taxpayer of the year of income in which the amount is so reimbursed, paid for or recouped includes that amount.

69(9)   [Property used on or after 1 July 1989]  

For the purposes of this Act, where property is used by the taxpayer on or after 1 July 1989 for a tax-related matter, that use of the property by the taxpayer is to be taken to be for the purpose of producing assessable income of the taxpayer.

69(10)   [Operation of subsec (9)]  

Subsection (9) has effect subject to a provision of this Act that expressly provides that a particular use of property is not to be taken to be for the purpose of producing assessable income.

69(11)   [Definitions]  

In this section:

"financing cost"
, in relation to an amount (in this definition called the ``financed amount'' ), means expenditure incurred by the taxpayer to the extent to which it is incurred in respect of obtaining finance for the financed amount and, without limiting the generality of the foregoing, includes:

(a) interest or a payment in the nature of interest; and

(b) expenses of borrowing;

"income tax"
means tax (however described) that is:

(a) imposed by an Act other than this Act; and

(b) payable under this Act;

"offence-related matter"
means a matter relating to the commission, or possible commission, of an offence against a law of the Commonwealth, of a State, of a Territory or of a foreign country and, without limiting the generality of the foregoing, includes a matter relating to:

(a) the investigation of such an offence; and

(b) a prosecution for, or other proceedings in relation to, such an offence;

"recognised professional tax adviser"
means:

(a) a registered tax agent (within the meaning of section 251A ); or

(b) a person exempted under subsection 251L(2) from the operation of section 251L ; or

(c) a person who is enrolled as a barrister, a solicitor or a barrister and solicitor of a federal court or a court of a State or Territory;

"tax-related matter"
has the meaning given by subsection (2).