| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051246634105
Date of advice: 4 July 2017
Ruling
Subject: Work related expenses – Accommodation, travel and meals.
Question 1
Are your accommodation, travel, food and incidental expenses for time spent in Country A during an internship deductable?
Answer
No.
This ruling applies for the following periods:
Year ending 30 June 20XX
The scheme commences on:
01 July 20XX
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
You were offered a short contract internship based in Country A with Employer B during December 20XX to February 20XX.
During your internship you travelled to Country B in January 20XX and lived there for approximately a month and all work related expenses were paid for by your employer.
After the period in Country B you returned to Country A to complete the remainder of the internship and then returned to Australia.
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 outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature.
In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. Where the duties of the job require a taxpayer to travel in the course of undertaking their work duties, the taxpayer's expenses can be deducted.
Accommodation expenses
As with the general rules regarding travel between home and work, accommodation and living expenses are normally private or domestic in character.
The occasion of the outgoing may give the expenditure the essential character of an income producing expense. An example is where the expenditure is incurred while away from home overnight on a work related activity. Where a taxpayer is away from home overnight in connection with an income producing activity, accommodation expenses are generally deductible.
Application to your circumstances
You have advised us that you were based in Country A for the duration of the internship and the travel to Country B and subsequent accommodation costs were paid for by your employer.
In accepting a contract internship overseas the travel to Country A is considered travel to work which occurs prior to commencement of the internship rather than a fundamental part of your income producing activities.
The essential nature of the costs related to your accommodation, meals and other incidental costs were not directly related to your internship and therefore remain private in nature.
Based on these facts, you cannot claim these costs under section 8-1 of the ITAA 1997.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
