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Edited version of your written advice
Authorisation Number: 1012873476430
Date of advice: 4 September 2015
Ruling
Subject: Airline lounge membership
Question 1
Are you entitled to a deduction for the expense you have incurred for the annual airline lounge membership?
Answer
Yes.
Question 2
Are you entitled to a deduction for the expense you have incurred for the airline lounge membership joining fee?
Answer
No
This ruling applies for the following period(s)
Year ended 30 June 2015
Year ended 30 June 2016
The scheme commences on
1 July 2014
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You travel long distances approximately twice a month for work purposes.
You have joined the airline club lounge. The incurred costs for the annual individual membership fee and the joining fee.
With lounge access you have access to printing services, laptop/mobile phone charging facilities, Wi-Fi is guaranteed and the occasional need to use lounge meeting rooms.
Your employer pays for all work related flights.
Your use of the airline lounge would be more than 90% for work purposes.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Detailed reasoning
Section 8-1 of the Income Tax Assessment Act 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.
Annual membership fees incurred for an airport lounge membership for employees to use while on business travel are deductible under section 8-1 of the ITAA 1997.
You wish to claim the joining fee and the annual membership fee.
In your case regular travel is part of your duties. Your employer pays for all flights and you pay for the airline lounge membership. It is accepted that as the travel is an essential part of you duties and the airline lounge membership is a work related expense.
Accordingly you are entitled to a deduction for the annual airline lounge membership fee.
However, we do not consider the joining fee to be allowable as it is capital in nature; it is a once and for all payment, which provides members with an enduring benefit. Section 8-1(2)(a) of the ITAA 1997 operates to exclude a deduction for items which are capital in nature.