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Ruling
Subject: Upgrade of travel ticket
Question
Are you entitled to a deduction for the costs of upgrading your airfares when your travel is for work-related purposes?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You are an employee.
Your employer pays for economy airfares for overseas business travel.
You upgrade these fares to business class.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.
A deduction is allowable for travel costs incurred by an employee in undertaking work-related travel. In your case, you incurred a cost to upgrade your ticket from economy class to business class. As the travel was work-related, you are entitled to a deduction for the cost you incurred for the upgrade.