Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 51AH   DEDUCTIONS NOT ALLOWABLE WHERE EXPENSES INCURRED BY EMPLOYEE ARE REIMBURSED  

51AH(1)    

Where:

(a) either of the following subparagraphs applies:

(i) a person makes a payment in discharge, in whole or in part, of an obligation of the taxpayer to pay an amount to a third person in respect of an amount of a loss or outgoing incurred by the taxpayer;

(ii) a person reimburses the taxpayer, in whole or in part, in respect of an amount of a loss or outgoing incurred by the taxpayer;

(b) the payment or reimbursement, as the case may be, constitutes:

(i) a fringe benefit; or

(ii) a benefit that, but for paragraph (g) of the definition of fringe benefit in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 , would be a fringe benefit; and

(c) in the case of a reimbursement - the amount of the reimbursement is not included in the taxpayer's assessable income under section 15-70 of the Income Tax Assessment Act 1997 ;

the amount of the deduction that, but for this section, has been allowed or would be allowable in respect of the loss or outgoing shall be:

(d) if it would be concluded that the amount of the payment or reimbursement would have been the same even if the loss or outgoing were not incurred in producing assessable income of the taxpayer - calculated as if the loss or outgoing were reduced by the amount of the payment or reimbursement; or

(e) in any other case - reduced by the amount of the payment or reimbursement.

51AH(2)    

Expressions (other than " fringe benefit " ) used in this section and in the Fringe Benefits Tax Assessment Act 1986 have the same respective meanings in this section as they have in that Act.

51AH(3)    

This section does not apply to deductions under Division 40 of the Income Tax Assessment Act 1997 (about capital allowances).