Taxation Determination

TD 93/195

Income tax: to what extent is a registration fee for a Continuing Professional Development (CPD) seminar deductible if a part of the fee represents the cost of food and drink to be provided as part of the seminar?

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FOI status:

may be releasedFOI number: I 1216274

1. If the registration fee is otherwise deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997),^[1] other than as deductible travel, the extent to which the fee is deductible, according to the terms of Division 32, is:

(a)

if the food and drink does not amount to entertainment, the registration fee is deductible in full (see Taxation Ruling IT 2675 for an explanation of the meaning of the expression, 'entertainment by way of food, drink or recreation', which appears in section 32-10.

(b)

if the food and drink does amount to entertainment but the CPD seminar is a seminar as defined in section 32-65 and the seminar expenses exception in section 32-35 applies, the registration fee is deductible in full. Section 32-35 includes the requirement that the food and drink provided is 'reasonably incidental' to a participant's attendance at the seminar. 'Reasonably incidental' is not defined. Food and drink is reasonably incidental to a CPD seminar if it:

(i)

is provided for sustenance because of the duration, time of day or location of the seminar;

(ii)

is provided immediately before, during or immediately following sessions of the seminar; and

(iii)

is available to all seminar participants.

(c)

if the food and drink does amount to entertainment but the seminar expenses exception in section 32-35 does not apply (because, for example, the seminar is a business meeting), the registration fee is deductible only to the extent that it does not represent a cost of food and drink. The level at which a registration fee is set is generally determined, at least in part, by the estimated costs of the organiser including the cost of food and drink to be provided. The amount of the registration fee to be disallowed is that amount included in the fee in respect of the food and drink. It is not necessary for a participant to actually consume any food or drink for the fee to be apportioned. It is simply enough that the fee includes an amount in respect of food and drink.

2. The following decision tree is a useful way of establishing the extent to which a registration fee is deductible:

Examples

An industry association arranges a series of three seminars for its practising members on current legislative developments. The seminars have been structured as follows:

Description	Seminar 1	Seminar 2	Seminar 3
Seminar Type	Workshop	Twilight	Luncheon
Total Duration	2 hours	5 hours	4 hours
Starting Time	2pm	4pm	11.30am
Refreshments	Afternoon Tea	Dinner	Lunch
	15 minutes at 3pm	1 hour at 6pm	1 hour at 1pm
	Tea & Coffee	3 course meal	2 course meal

(The registration fee for Seminar 3 is $50 based on the association's estimated costs of $1000 venue hire, $600 speaker's fee, $400 photocopy and other administration costs and $3000 luncheon costs spread over 100 anticipated registrations - the amount included in each fee for food and drink is therefore $30).

Using the decision tree, the deductibility of each registration fee can be summarised as follows:

Does expense satisfy s8-1	Yes	Yes	Yes
Is food & drink included	Yes	Yes	Yes
Entertainment	No	Yes	Yes
Is a seminar as defined	Not applicable	Yes	Yes
Is the s32-35 exception satisfied	Not applicable	Yes	No (seminar only 3 hours)
Allowable	In Full (s8-1)	In Full (Division 32)	$20 only (Division 32)

Commissioner of Taxation
7/10/93

Previously issued as Draft TD93/D146

References

ATO references:
NO UMG0061

Related Rulings/Determinations:

IT 2675

Subject References:
continuing professional development;
eligible seminar;
entertainment expenses;
reasonably incidental

Legislative References:
ITAA 1997 section 8-1
ITAA 1997 Division 32
ITAA 1997 section 32-10
ITAA 1997 section 32-35
ITAA 1997 section 32-65