# Can I claim Professional Fees (Accountants, Lawyers) as a business expense in Australia?

**Yes, fully claimable.** 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.

Typical amount: A$1,500–A$5,000/year for a small Pty Ltd

## 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.

Source: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions

## Related expenses

- [Software Subscriptions](https://accounts-os.com/au/expenses/software-australia)
- [Training & Self-Education](https://accounts-os.com/au/expenses/training-australia)
- [Superannuation Contributions](https://accounts-os.com/au/expenses/superannuation-australia)