Private ruling: Work-related deductions - renting an office space
Date of advice: 9 December 2024
Published: 28 January 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for the expenses you will incur to rent an office space? | A1: Yes. Having considered your circumstances and the relevant factors, you are entitled to a deduction for renting an office space in accordance with section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Relevant facts and circumstances: On XX/XX/20XX you commenced employment as a Regional Sales Manager via an employment agency (the employer) representing one of their clients. The client's global headquarters are based in another country. The client does not have an office based in Australia. The client provides innovative software solutions to help enterprises streamline their data processing and analytics, enabling organizations to monitor and analyse large-scale IT systems. Employment duties and place of work Your employment contract provides the following details: • 3.3 You have been hired specifically to manage a relationship with the Client and will take instructions and feedback directly from the Client to fulfil your job duties, role and responsibilities. • 3.4 Your normal place of employment will be working from your home office. However, you also agree to work at any Client place of business in Australia on a temporary or permanent basis as the Company or the Client may reasonably require. You will also be prepared to undertake any reasonable travel on Company business which is deemed necessary by the Company or the Client. You host approximately 3-5 meetings or networking events with clients and stakeholders each week. These sessions last approximately one to three hours. The meetings are critical to fostering relationships and driving new opportunities. The meetings are not appropriate to be performed at home and you are currently incurring expenses for a more appropriate space. Your role involves business development and relationship building activities. It is essential to have a professional environment to meet customers. You are currently working from home in a dedicated workspace. You intend to rent an office space to use for work purposes only. You will install your employer's business signage at the building reception area and in the office. The expense to rent the office space will not be reimbursed by the employer or the client.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1