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Taxpayer Alert – Overseas Self Study Courses

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The Income Tax Assessment Act (ITAA) allows you to claim a tax deduction for costs, including course fees and travel costs, associated with educating yourself.

Taxpayer Alert – Overseas ConferencesRecently, the Australian Taxation Office (ATO) issued a Taxpayer Alert about some promoters who are exploiting those provisions of the ITAA to suggest that you can go overseas to a destination of your choice, do a self-study course, and claim the costs as a tax deduction. These promoters claim to have received endorsement from the ATO supporting this view.

According to the ATO, many of these arrangements, such as the examples listed below, have not been endorsed.

  • You purchase a self-study course (a CD, DVD or written course material) that you can undertake at the holiday destination you choose.
  • You undertake a self-study program or attend a seminar while on a cruise ship.
  • You undertake an educational activity like attending a wealth creation seminar while you are on a tour.
  • You can undertake the program individually or in a group.
  • You commit to a minimum daily requirement of self-study for the course of the program.
  • You are able to spend the remainder of the day at your leisure.
  • You will not be provided with a published agenda for seminars and the content is tailored to your familiarity with the topic.
  • You may be asked to complete an examination and a feedback form at the end of the program.
  • You are required to record time spent in a diary, so that 100% of your travel and accommodation costs can be claimed as a deduction.

The ATO is reviewing these arrangements and warns that if you claim a tax deduction for the costs associated with these arrangements, unless you have received a private ruling that the arrangement is acceptable, you may be considered to have participated in a tax avoidance scheme. Penalties of 75% of the tax avoided may be applied. If you have participated in one of these arrangements and you voluntarily disclose this to the ATO, penalties will be reduced.

Read about how to claim for overseas travel in the following article.

ATO – TA 2011/3 – Arrangements involving holiday travel claimed as a work-related, investment or self-education expense

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