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Edited version of private ruling
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Ruling
Subject: Employee meal allowance
Are you entitled to a deduction for the cost of meals provided to your employees while they are travelling to and working in remote locations?
Yes.
Relevant facts
You are a company.
A number of your business projects are located in remote areas of Australia.
You have a number of employees who travel to these remote locations to complete these projects.
Your employees may be required to remain at or near the project locations for a number of nights, staying in caravans, swags or nearby huts. The employees do not have access to shops to purchase food or drinks during these projects.
You wish to provide meals to your employees while they are on these remote projects.
These meals would be purchased from shops in a city prior to the project start.
The meals would be consumed by your employees at the project locations.
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.
Your business requires your employees to be away from home overnight on occasion in remote locations.
During those times, the expense that you incur to provide them with meals is connected to the travel and work in which they are engaged. Therefore, the expenses are considered to be connected to the production of your business income and have the essential character of a business expense.
Meal expenses that you incur for your employees whilst they are working away from home overnight will be deductible under section 8-1 of the ITAA 1997.