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Re: How does tax work on Finders fee when I'm an employee of a company

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Newbie

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Hello,

I work at a forex exchange company and I'm an employee at the company. I make a commisson on each transaction and the company pays me a base salary + commission. Base salary around 40k and commission 30k, However I pay out halfof my commission (15k) as finder fee/referral fee in China. I pay mainly real estate companies and student immigration companies for their referral. 

 

Before tax i roughly earn 55k a year, how would I declare the other 15k (already paid tax on when the company pays out my salary) as finder/referral fee.On payslip I earn 70k and paying 15k tax when effectively I actually earn 55k. Thus paying $15k tax making the commission part pointless, if I cannot claim part of the 15k paid out as finder/referral fee.

 

How would I solve this tax issues?

 

Thanks for the input 

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ATO Certified

Anonymous

Replies 0

The answer to this can vary markedly depending on the circumstances and you have not provided enough information.

 

For example finder's fees are specifically excluded from been deductible if you are paying associated parties.

 

I suggest you ask for an ATO private ruling on this matter, and as part of the process it will give you the opportunity to discuss the matter with the ATO officer that is going to provide you with the ruling. The ruling they give you will be binding on the ATO so you can rely on it.       Its probably the better way with this type of question.  Apply here -  Private ruling

 

or contact the ATO on 13 26 81

 

 

2 REPLIES 2

Megastar

Replies 0

Hi, 

You may claim the expenses as Other deductions, if you need to spend money to earn income, you can usually claim it – either as an immediate deduction or over time.

To be a legitimate expense claim, you have to be able to show: 

  • you need to incur the expense to earn the income
  • the expense is not private or domestic in nature
  • the expense is not an outgoing of capital or of a capital nature related to a capital asset.

You can read the details from here -Other Deductions

Hope it helps

Highlighted

Best answer

ATO Certified

Anonymous

Replies 0

The answer to this can vary markedly depending on the circumstances and you have not provided enough information.

 

For example finder's fees are specifically excluded from been deductible if you are paying associated parties.

 

I suggest you ask for an ATO private ruling on this matter, and as part of the process it will give you the opportunity to discuss the matter with the ATO officer that is going to provide you with the ruling. The ruling they give you will be binding on the ATO so you can rely on it.       Its probably the better way with this type of question.  Apply here -  Private ruling

 

or contact the ATO on 13 26 81