Private ruling: Work related expenses - airport lounge membership
Date of advice: 9 September 2016
Published: October 2016
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you entitled to a deduction for the cost for the annual fees of an airport lounge membership? | A1: Yes

Relevant facts and circumstances: You are employed by a national company with operations in all states and territories. You are required to travel domestically as part of your work several times per year. You use the airport lounge to access the internet and have a quiet place to work prior to travel. You do not use the lounge for personal travel.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 26-45

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. It is accepted that the fees for the airport lounge membership are incidental and relevant to the conduct of your work. However in some instances, even though an expense may be incidental and relevant to the production of income, there are some sections of the ITAA 1997 which may nevertheless specifically exclude some types of expenditure from deductibility. The expense in this case may potentially be excluded from deductibility by section 26-45 of the ITAA 1997. Section 26-45 of the does not allow a deduction for the cost of recreational club membership. However, the airport lounge club is also not considered to be a recreational club, and the fees are not excluded from deductibility on this basis. In your case you are required to travel domestically for your work. You use the facilities of the airport lounge when you travel and there is no private use of these facilities. It is accepted that the fees for the airport lounge membership are incidental and relevant to the earning of your assessable income and is therefore fully deductible under section 8-1 of the ITAA 1997.