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Edited version of private ruling
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Ruling
Subject: Meal and incidental expenses
Question
Are you entitled to a deduction for meal and incidental expenses?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You are an Australian resident.
You are an employee working on a fly in/fly out basis in a foreign country and receive foreign employment income.
While in the foreign country, you incur meal and incidental expenses.
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.
Meal expenses are normally private or domestic in character. However, where a taxpayer is away from home overnight in connection with an income producing activity, meal expenses are deductible under section 8-1 of the ITAA 1997. The expenditure is not considered private because its occasion is the taxpayer's travel away from home on income producing activities.
In considering the deductibility of travel expenses, a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted (Taylor v Provan 1975 AC 194).
A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of this travel is incurred to put you in a position to perform your duties of employment, rather than in the performance of those duties. (Taxation Ruling TR 95/34)
In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms case) the Federal Court disallowed a forest worker's deduction for the cost of maintaining a caravan and other living expenses. The taxpayer incurred the expenses in providing temporary accommodation at the base camp because the taxpayer had chosen to reside at a place far from the worksite. These expenses were dictated not by work but by private considerations.
In your case, your accommodation close to your workplace is considered to be your second residence for the periods you are working. As such, you are not considered to be away from home overnight. As in Toms case, expenses you incur for meals and incidentals are not work related expenses and are considered to be private. Accordingly, a deduction for these expenses is not allowable.