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Section 25-5: More than meets the eye?


Section 25-5 of the Income Tax Assessment Act 1997 (Cth) is known as the provision under which taxpayers are able to claim deductions for the costs of completing their tax returns. Its scope, however, can be wider, extending to other tax-related costs and to costs incurred by an entity other than the taxpayer itself. This article explores the broader scope of the s 25-5 deduction.

The article examines in detail a pair of important court decisions in 2003, and draws two lessons from them. The first is to look beyond the obvious applications of s 25-5 when considering the availability of deductions for clients. The section can benefit clients beyond the costs of preparing income tax returns, and beyond the “obvious” taxpayer. The second is to ensure that adequate documentation is retained in relation to work performed for clients, rates applied to invoice work, and the manner in which items are invoiced.

Author profiles

Kaylene Hubbard ATI
Kaylene joined KPMG in the Greater Western Sydney Office with the Enterprise Tax team in October 2016. She is a highly experienced Law Graduate and Solicitor with a special interest in taxation law and advising both private clients and their groups, and larger corporates. Kaylene is a former partner of Deloitte, and more recently a Tax Advisory Partner with a smaller accounting firm. She has experience spanning 20 years in providing high level taxation advice, presenting on topical tax issues to industry and the professions, and writing technical papers and journal articles. - Current at 14 June 2017
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Matthew Eakin
Matthew is a Tax Consultant with CABEL Partners.
  • Current at 1 March 2012
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    Phillip Browne CTA
    Philip is the Managing Partner with CABEL Partners. - Current at 01 March 2012
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