Tax Deductions For Renewal Fees: It’s All In The Wording, Franchisees Told

Franchising.net.au:

Could the renewal fees in a franchise system be tax deductible? Yes, if the wording shows the fees are a cost of conducting business, according to Professor Andrew Terrry, special counsel with DCS Lawyers and Professor of Business Regulation at Sydney University’s Business School.

Terry, a Franchising magazine columnist, has commented on a recent decision by the Administrative Appeals Tribunal. The AAT rejected the Commissioner of Taxation’s view that fees paid by a Bendigo Bank community franchisee to secure renewal of the franchise agreement were not deductible.

Key to the decision was whether the payment was a fee on a capital, or revenue, account. Read full post.