Dogs can be a legitimate tax deduction when used in the following ways:

  • On farms for rounding up sheep, cattle and other livestock.
  • Guard dogs at factories.
  • Guarding tradespersons tools on work sites from theft.

The purchase cost of the dog is not deductible as it is a capital cost. Training fees are also deemed non-deductible by the ATO (see ATO ID 2011/18).

But the vet bills and pet food bills may qualify as a tax deduction.

Whether an individual’s dog costs are deductible will depend on the facts of each case and whether the dogs are actually helping to generate income. For this deduction to be successful with the ATO the taxpayer must be able to explain how the dog generates income.

If the dog is mainly used for private and personal reasons i.e. the family pet, then no expenses will be deductible.


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