Theft and bribery

DB 42 Property misappropriated by employees or service providers
When this section applies


This section applies when—


a person carries on a business; and


an employee of the business, or a person who provides services to the business, misappropriates property; and


no other provision of this Act allows the person who carries on the business a deduction for the loss resulting from the misappropriation.



This section does not apply when a person who misappropriates property is associated with the person who carries on the business.



The person is allowed a deduction for the loss that they incur in the course of the business as a result of the misappropriation of the property.

Timing of deduction


The deduction is allocated to the income year in which the loss is ascertained, or in 1 or more earlier years if, in the circumstances, the Commissioner considers it would be fair.

Link with subpart DA


This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

Defined in this Act: associated person, business, capital limitation, Commissioner, company, deduction, employee, general limitation, general permission, income year, relative, supplement, trustee

Compare: 2004 No 35 s DB 33

Section DB 42(2): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 75(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).