Remedial Massage Tax Ruling

ATO Interpretative Decision
ATO ID 2001/752
Income Tax
Massage» expenses

FOI status: may be released
Status of this decision: Decision Current

CAUTION: This record of an ATO decision may not include a complete statement of all facts in summarising the application of the relevant provision of the law to complex circumstances. If you rely on this decision and your circumstances are materially the same as those described, and the decision is subsequently found to be incorrect, penalties will not be attracted on the missing tax. However, interest could be payable in any event depending on the circumstances of the case. If the relevant provisions, being those in force at the date of decision, have been amended or rewritten, it will be necessary to have regard to the amended or rewritten law. You may wish to obtain further advice from the ATO or from a professional adviser.

Issue

Is the taxpayer entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the costs of reimbursing an employee for remedial massage expenses?

Decision

Yes, the taxpayer is entitled to a deduction under section 8-1 of the ITAA 1997 for the costs of reimbursing an employee for remedial massage expenses.

Facts

An employee of the taxpayer suffered a back injury whilst performing their duties for the taxpayer. The injury occurred whilst working with heavy machinery.

The employee has a remedial massage each month to relieve the pain caused by the injury. The taxpayer reimburses the employee for the cost of the massage.

Reasons for decision

Section 8-1 of the ITAA 1997 allows a deduction for all losses or outgoings to the extent that they are incurred in gaining or producing assessable income or are necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. However, no deduction is allowed to the extent that the losses or outgoings are of a capital, private or domestic nature or are necessarily incurred in gaining or producing exempt income. 

The taxpayer reimburses expenses the employee incurs for remedial massages. The massages provide pain relief to the employee to allow them to continue working. The expenses have the essential character of an income producing expense. The expenses are incidental and relevant to the income producing activity and as such are deductible under section 8-1 of the ITAA 1997.

Date of decision: 5 November 2001

Year of income: Year ending 30 June 2002

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

Keywords
Deductions & expenses

Date of publication: 30 November 2001

ISSN: 1445-2782