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Edited version of private ruling
Authorisation Number: 1011559720485
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Ruling
Subject: Overseas travel expenses
Question
Are you entitled to a deduction for the cost of airfares incurred to travel overseas?
Answer
No.
Relevant facts and circumstances
You are employed.
You do volunteer work for another organisation.
You also volunteered to work on a project overseas.
Upon learning of your planned trip overseas, the organisation requested your assistance due to your experience. As part of your volunteer work, you travelled overseas for around a month on the organisation's behalf.
The objective of your travel was to collect data and information on projects supported by the organisation.
Your overseas travel did not relate to your employment. However, your employer oversees the activities of related organisations.
You do not earn any income from the organisation.
You paid for all aspects of your trip.
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) 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.
There must be a sufficient connection between the outgoing and the activities directed at gaining or producing assessable income. The decision in Ronpibon Tin v. FCT (1949) 78 CLR 47; (1949) 8 ATD 431, confirms that for an outgoing to be deductible under section 8-1 of the ITAA 1997, there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of the assessable income.
Where airfares are part of the necessary cost of your work related activities they are deductible expenses. However, a sufficient connection between the cost of the airfares and your income producing activities must firstly be established.
In your case, you travelled overseas on a volunteer basis to collect data and information on behalf of the organisation. Your travel did not have any connection with your employment. You did not derive any income from your travel and your activities overseas.
Although your employer is involved with similar organisations, this does not establish a sufficient connection between your airfare expenses and your income producing activities. Your overseas travel was not travel in the course of your employment duties.
Therefore, you are not entitled to a deduction under section 8-1 of the ITAA 1997 for the cost of airfares incurred to travel overseas.
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