ATO Interpretative Decision

ATO ID 2001/25

Income Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Whether the expenditure incurred by the taxpayer in respect of permanent lip liner, eyeliner and rouge is deductible under Section 8-1 of the Income Tax Assessment Act 1997.

Decision

The expenditure incurred in respect of permanent lip liner, eyeliner and rouge is not deductible under Section 8-1 of the Income Tax Assessment Act 1997.

Facts

The taxpayer is a flight attendant. Due to the pressurisation of the airline cabin and the lack of humidity, she suffers from severe dehydration of the skin. As a direct result of these harsh working conditions, the taxpayer suffers extremely dry cracked skin, bleeding lips and cold sores which became infected. The taxpayer is consequently unable to attend work. Subsequently, the taxpayer underwent a procedure of tattooing her lip liner, eyeliner and rouge with pigment similar to permanent make-up. According to the taxpayer, the procedure meant that her lips did not crack or bleed and her skin did not dry out as much. Further, the taxpayer contended that undergoing this procedure meant that no future expenditure in respect of moisturisers was necessary.

Reasons For Decision

The deductibility of certain expenses incurred by flight attendants was specifically dealt with in Mansfield v FC of T 96 ATC 4001; (1996) 31 ATR 367. In that case the Federal Court held that expenditure on moisturiser and hair conditioner was deductible due to the harsh conditions of employment. However, hairdressing expenditure and make-up costs were held to be private expenditure and therefore not allowable. Justice Hill held that the mere fact that a particular expenditure may be required to be made by the employer, while relevant, will not be determinative of deductibility.

Following this decision, the Australian Taxation Office issued Taxation Rulings TR 96/17, TR 96/18 and TR 95/19.

Taxation Ruling TR 96/17 states that, for expenditure on rehydrating moisturiser and hair conditioner to be seen as work related, there must be something out of the ordinary and significant about the expense with the added requirement of exceptional grooming standards from the employer. Further where a deduction is allowable for moisturising products, only the amount actually related to items for work purposes will be allowable as a deduction.

Taxation Ruling TR 96/18 confirms the general rule that expenditure on cosmetics, personal care and grooming is private in nature and not deductible irrespective of whether the employer requires its employees to be well groomed.

Taxation Ruling TR 95/19 deals with the common deductible items of airline industry employees. An Addendum to that Ruling states that a deduction is not allowable for the cost of grooming including cosmetics, skin care products, hairdressing and other personal grooming expenses but that a deduction may be allowable, in limited circumstances, for re-hydrating moisturiser and re-hydrating hair conditioner used to combat the drying effects on the skin and hair when constantly exposed to harsh working condition and to meet the employer's strict grooming requirements (TR95/19A).

In this case there is no special feature in the tattooing that re-hydrates the skin, unlike moisturiser. At best, it could be stated that the permanent tattooing reduces the need for normal make-up which tends to cause greater drying of the skin because of its chemical properties. Therefore, even though a subsidiary benefit of the permanent makeup procedure may be a reduction in skin dehydration, it has an essential personal characteristic and is not directly relevant to the gaining or producing of the taxpayer's assessable income. Consequently, no deduction is allowed under section 8-1 of the Income Tax Assessment Act 1997.

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

Case References:
Mansfield v FC of T
   96 ATC 4001
   (1996) 31 ATR 367

Related Public Rulings (including Determinations)
TR 95/19
TR 96/17
TR 96/18

Keywords
Work related expenses
Clothing expenses
Cosmetics & toiletries
Grooming expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  4 June 2001

ISSN: 1445-2782