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Edited version of your written advice
Authorisation Number: 1012717724546
Ruling
Subject: Entertainment and travel
Question
Are you entitled to a deduction for the cost of meals for clients and travel to the restaurants?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts
You are an employee and licensee of a club.
You travel to restaurants where you meet with your clients to promote the club.
You pay for their meals.
You incur expenses to travel to the restaurants.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 32-10
Reasons for decision
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 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.
Under section 32-10 of the ITAA 1997, entertainment is defined as the provision of entertainment by way of food, drink or recreation and includes accommodation or travel where it is in connection with, or for the purpose of facilitating entertainment. Section 32-5 of the ITAA 1997 precludes a deduction for entertainment expenditure except in limited circumstances which are set out in Subdivision 32-B.
Your circumstances do not fall into one of the exceptions. Therefore, you are not entitled to a deduction for the cost of entertainment.
Furthermore, the cost of travel to the restaurant is considered to be private travel as it is considered that the travel is for the purpose of going to have a meal. This is so, even though you discuss or promote your club while having the meal.