ATO Interpretative Decision

ATO ID 2002/319

Income Tax

Beverage Analyst - purchase of wine for tasting
FOI status: may be released
  • This document has changed over time. View its history.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Is the taxpayer, a food and beverage analyst, entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for expenditure incurred in purchasing wine for tasting?


No. The taxpayer, a food and beverage analyst, is not entitled to a deduction under section 8-1 of the ITAA 1997 for expenditure incurred in purchasing wine for tasting.


The taxpayer is a food and beverage analyst whose main role is compiling new wine lists for restaurants.

To maintain their knowledge, the taxpayer purchases several cases of mixed wine for tasting and assessment at their private residence. The taxpayer is not required by their employer to incur this expenditure although they did arrange for the taxpayer to receive a discount price on purchase.

The taxpayer consumes approximately 1/4 of the bottle for tasting and the remainder for private use.

Reasons for Decision

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.

In establishing a connection, it must be shown that the outgoing is relevant and incidental to the gaining of assessable income.

In most circumstances the purchasing of wine for tasting purposes would be considered a private expense. In some limited circumstances this expense may be characterised as an income producing expense and may be an allowable deduction. However, there is an onus on the taxpayer to prove that such an outlay should be an allowable deduction.

This was highlighted in Case P30 82 ATC 139; 25 CTBR (NS) 30 Case 94 when the Board of Review disallowed a claim for the purchase of newspapers by a real estate salesman. The real estate salesman would gather information from the daily papers to assist him in selling real estate. The salesman was however, unable to demonstrate that his income was affected by expenditure on the newspapers. The expense retained its private character and the deduction was not allowed.

The taxpayer is not required to incur the expense by their employer. While knowledge acquired from the wine tastings may assist the taxpayer to carry out employment duties more efficiently, the expense is not necessarily incurred in order to earn that income. The tasting of the wines at the taxpayer's home has the character of a private expense. The connection is too general or tenuous to allow a deduction for any portion of the cost. Accordingly, the taxpayer is not entitled to a deduction under section 8-1 of the ITAA 1997 for the cost incurred in purchasing the wine.

Amendment History

Date of Amendment Part Comment
2 September 2014 Issue Minor amendments to clarity content
Facts Minor amendments to clarify content
Reason for Decision Update case citation.
Replace Case P30 25 CTBR (NS); Case 94 82 ATC 139 with Case P30 82 ATC 139; 25 CTBR (NS) 30 Case 94.
Changed salesperson to salesman to maintain consistency.
Case References Case 94 25 CTBR (NS) 30
Case P30 82 ATC 139

Date of decision:  30 August 2001

Legislative References:
Income Tax Assessment Act 1997
   section 8-1

Case References:
Case P30 / Case 94
   82 ATC 139
   25 CTBR (NS) 30

Work related expenses
Private or domestic expenses

Siebel/TDMS Reference Number:  DW270201; 1-5R7FRU9; 1-C9QC4JH

Business Line:  Small Business/Individual Taxpayers

Date of publication:  28 March 2002
Date reviewed:  8 November 2017

ISSN: 1445-2782

  Date: Version:
  30 August 2001 Original statement
You are here 2 September 2014 Updated statement