Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 32 - Entertainment expenses  

Subdivision 32-E - Anti-avoidance  

SECTION 32-75  

32-75   Commissioner may treat you as having incurred entertainment expense  

If:

(a) you incur a loss or outgoing under an ^* arrangement; and

(b) someone provides ^* entertainment under the arrangement to you or someone else; and

(c) section 32-5 would have stopped you deducting the loss or outgoing under section 8-1 (which deals with general deductions) if you had incurred it in respect of providing that entertainment;

this Division applies to you as if you had incurred the loss or outgoing in providing that entertainment, to the extent (if any) that the Commissioner thinks reasonable.

Note:

This means that section 32-5 will prevent you from deducting the loss or outgoing under section 8-1 unless an exception applies.

Example:

A company pays $1,000 to sponsor a football game. Under the same arrangement, the company is given a viewing box at the game. To the extent the Commissioner thinks reasonable, he or she can treat the company as having incurred the $1,000 in providing entertainment.