Edited version of your written advice

Authorisation Number: 1051317174556

Date of advice: 6 December 2017

Ruling

Subject: Travel expenses

Question 1

Are the expenses related to travelling to Country A an allowable deduction?

Answer

No

Question 2

Are the other direct expenses of attending a work related conference an allowable deduction?

Answer

Yes

Question 3

Are the travel expenses associated with attending association meetings an allowable deduction?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2017

The scheme commences on:

1 July 2016

Relevant facts and circumstances

You travelled to Country A in 2017 and returned in the following month.

You attended a conference.

During your time in Country A you also travelled to various historic sight-seeing locations.

You travelled to association meetings in Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

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.

Most self-education expenses are incurred voluntarily and to be allowable under section 8-1of the ITAA 1997, the expenditure must be characterised as having been incurred in gaining or producing assessable income.

The conference you attended has clear links to your role as a professional which will improve the knowledge you require in your current employment and meets the requirements of your professional development. The cost of attending the conference is therefore an eligible deduction as it contributes directly to you producing your assessable income.

The eligibility of travel expenses is covered in Taxation Ruling IT 2198 which deals with allowable deductions for voluntary expenditure incurred by employee taxpayers. The ruling states that the Taxation Boards of Review have seen a number of professionals seeking income tax deductions for overseas travelling expenses. Most of the claims were rejected because the professionals were not able to establish a positive connection between the overseas travel and the performance of their duties of employment as professionals. In the ultimate the claims have been based on a general proposition that the overseas travel has made the taxpayers better able to carry out their duties which, of itself, is not sufficient to enable the expenditure to be allowed as a deduction.

Taxation Ruling TR 98/9 states self-education expenses are allowable as a deduction if your current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables you to maintain or improve that skill or knowledge. A deduction is also allowable if the education is likely to lead to an increase in income from your current income earning activities.

However, if the subject of the self-education is too general in terms of your income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist.

In your case, you attended a conference while in Country A but the majority of the time was spent travelling to multiple historic sites throughout the country and other personal activities, therefore the primary purpose of the travel was not to attend the conference but to participate in sight-seeing activities. We acknowledge that this trip may have broadened your knowledge and provided a more in-depth understanding of some subjects. However, these reasons are not enough to demonstrate a sufficient connection between the travel and your income producing activities.

Accordingly your travel expenses are not considered to have a sufficient connection to your employment duties, and you are not entitled to a deduction under section 8-1 of the ITAA 1997 for expenses incurred in travelling overseas. Additionally, there are no other provisions that would specifically allow for a deduction in this case.

In regard to claiming the kilometres travelled to meetings, this is not an eligible deduction. In order to be deductible under Section 8-1 the expenditure must be incurred in or in the course of gaining or producing your assessable income.

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