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Edited version of private advice

Authorisation Number: 1051838210802

Date of advice: 12 May 2021


Subject: Work related expenses - supplements

Question 1

Are you entitled to claim a deduction for the cost of supplements purchased as a fitness/gymnasium expense as described in Taxation Ruling TR 95/17?



Question 2

Are you entitled to claim a deduction for the cost of supplements purchased as an other cost as described in TR 95/17?



Question 3

Are you entitled to claim a deduction for the cost of supplements purchased as a general deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) when travelling for work purposes?



Question 4

Are you entitled to claim a deduction for the cost of supplements purchased as a general deduction under section 8-1 of the ITAA 1997 while you are deployed?



This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are a member of the Australian Defence Force (ADF) in a special combat squad.

You are required to maintain a level of fitness well above the ADF standard.

As part of your fitness plan, you are required to consume supplements to maintain your physical health and mental wellbeing.

When you are undertaking particular training exercises, or are deployed, the food provided does not have enough nutritional value, therefore supplements are required to complete your duties.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

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.

Taxation Ruling TR 95/17 and its subsequent addendums discuss work related deductions for employees of the ADF.

Generally, expenses incurred in keeping fit are inherently private in nature as it ultimately involves the person's own physical wellbeing. This position does not change even if the person is employed to undertake physical activity as part of their duties. For example, a police officer or a member of the military would not generally be able to deduct the costs of maintaining their fitness levels.

The deductibility of expenses for maintaining fitness as a member of the ADF is outlined in TR 95/17:

Expenditure incurred to maintain the general standard of fitness expected of an ADF member is not an allowable deduction. A deduction is allowable for an ADF member who can demonstrate that his or her income-earning activity is the maintenance of a very high level of fitness.

Although most fitness-related expenses, like gym membership, are usually considered to be a private expense, they will be allowable as a deduction if the ADF member can demonstrate that:

strenuous physical activity is an essential and regular element of their income-earning activities and that these costs were incurred to maintain a level of fitness well above the ADF general standard (Paragraph 114 of TR 95/17).

However, an employer's requirement that an employee incur expenditure which is not related to income-producing activities does not convert that expenditure into a deductible outgoing. In the case FC of T v. Cooper 91 ATC 4396 at 4414; (1991) 21 ATR 1616 at 1636 (Cooper's Case) Lockhart J said

The taxpayer incurred the expenditure on additional food and drink for the purpose of increasing his weight and thus to play professional football and earn assessable income. But its character as the cost of additional food and drink is neither relevant nor incidental to the training for and the playing of football matches, which is the activity by which he gained his assessable income. The expenditure was not incurred in or in the course of that activity. The taxpayer was paid money to train for and play football, not to consume food and drink.

In my opinion the taxpayer's expenditure on additional food and drink was not incurred in the gaining or producing of his assessable income and is therefore not deductible from his assessable income during the relevant years of income.

Furthermore, for the reasons already given I would regard the expenditure as being of a private nature.

In summary, the Commissioner's position is that a deduction for expenses incurred for food supplements will not be allowed as it is a private expense.

Therefore, whilst certain ADF members may be required to maintain a high level of physical fitness, this does not mean that all related expenditure is allowable as an income tax deduction.

In your case, while we accept that your role as a member of a special combat squad may require a higher standard of fitness than the general ADF standard, we do not consider that the cost of fitness supplements are incidental and relevant to the earning of your assessable income.

The reasoning in Cooper's Case can be applied in your case. Although taking fitness supplements support any physical activities you may undertake to maintain your physical health and mental wellbeing, the nexus between the expenditure and your employment is not sufficient enough to make them deductible in nature.

Therefore, we consider the cost of the supplements to be private in nature and not deductible under section 8-1 of the ITAA 1997.