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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-42 - PERSONAL SERVICES INCOME    View history reference

Division 85 - Deductions relating to personal services income    View history reference

Operative provisions  

SECTION 85-10  Deductions for non-employees relating to personal services income  

 View history reference

85-10(1)  

You cannot deduct under this Act an amount to the extent that it relates to gaining or producing that part of your *ordinary income or *statutory income that is your *personal services income if:


(a) the income is not payable to you as an employee; and


(b) you would not be able to deduct the amount under this Act if the income were payable to you as an employee.

Example:

Ruth is an architect who works as an independent contractor for one firm. She is not conducting a personal services business. On most days she travels from her home to the business premises of the firm, where she does her work. She also has a home office, where she does some of her work.

This section confirms that Ruth cannot deduct her expenses of travelling between her home and the firm's premises because she could not deduct them if she were an employee.

85-10(2)  

Subsection (1) does not stop you deducting an amount to the extent that it relates to:


(a) gaining work; or

Examples:

Advertising, tendering and quoting for work.


(b) insuring against loss of your income or your income earning capacity; or

Examples:

Sickness, accident and disability insurance.


(c) insuring against liability arising from your acts or omissions in the course of earning income; or

Examples:

Public liability insurance and professional indemnity insurance.


(d) engaging an entity that is not your *associate to perform work; or


(e) engaging your *associate to perform work that forms part of the principal work for which you gain or produce your *personal services income; or


(f) contributing to a fund in order to obtain *superannuation benefits for yourself or for your *SIS dependants in the event of your death; or

Note:

For deductions for superannuation contributions: see Subdivision 290-C.

 View history reference


(g) meeting your obligations under a *workers' compensation law to pay premiums, contributions or similar payments or to make payments to an employee in respect of *compensable work-related trauma; or


(h) meeting your obligations, or exercising your rights, under the *GST law.


 



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