Can I Claim Professional Fees (Accountants, Lawyers) as a Business Expense in Australia?
Yes, fees paid to tax agents, accountants, lawyers and other professionals for the trade are deductible. Capital legal fees (e.g. asset acquisition) are capitalised, not deducted.
Finn does your books in Australia
AccountsOS keeps the books for Australia businesses, tracks tax deadlines and handles expenses, in plain English. Ask Finn about yours, no signup needed.
What Australian Taxation Office (ATO) says
Tax agent fees are specifically deductible under s25-5 ITAA 1997, including the cost of preparing the company tax return and BAS. General legal fees are deductible if incurred in producing assessable income; fees of a capital nature are capitalised. Section 25-5 covers the expense of managing tax affairs, including tax agent fees and the cost of obtaining tax advice. The cost of a lawyer is deductible under section 8-1 if it relates to producing assessable income, and costs of a capital nature are added to the cost base of the asset. Penalties and interest imposed under the tax laws are not deductible, and the same applies to fines.
When you can claim
- Tax agent fees for company tax return, BAS
- Bookkeeping and payroll services
- Legal fees for ordinary trading contracts
- ASIC Annual Review fees
- Fees for a tax audit or a tax dispute, including preparing an objection
When you cannot claim
- Legal fees for capital matters (acquisitions, share issues): capitalised
- Personal tax advice unrelated to the business
- Tax penalties (specifically non-deductible under s26-5)
- Fines, general interest charge and shortfall interest charge, which are not deductible
Good to know
Pro tip: Ask the tax agent to itemise the invoice between the company return, BAS preparation, advisory work and any capital matters. A GST-registered business can claim a credit for the GST in the fee if the service is for a creditable purpose.
Important: ASIC annual review fees are an ordinary business expense. Fees to set up a company and similar start-up costs are generally deductible over five years under section 40-880, not all at once.
Stop guessing what you can claim in Australia
AccountsOS automatically categorises expenses with Australian Taxation Office (ATO)-aware rules and tells you exactly what is claimable.
Try Free