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Edited version of private advice
Authorisation Number: 1012679563750
Ruling
Subject: Deductibility of travel expenses
Questions and answers
1. Are you entitled to a deduction for the cost of a flight from Country Y to Australia to attend a meeting with Company Y?
No.
2. Are you entitled to a deduction for the cost of airfares from Australia to Country Y withdraw you're an application in Country Y and to arrange the transfer of your belongings and money back to Australia?
No.
This ruling applies for the following period:
Year ended 30 June 2014
The scheme commenced on:
1 July 2013
Relevant facts and circumstances
You are the owner of a small company.
You ceased all your professional activities in Australia as you were required to return to Country Y to for family reasons.
You did not carry out any professional activities while you were in Country Y.
You started to think about resuming your work after being in Country Y for a period of time while still in Country Y.
You decided to open a branch of your business in Country Y and you lodged the relevant applications.
You returned to Australia at the invitation of Company Z and were offered a permanent position with Company Y which you accepted.
You made two trips back to Country Y to withdraw paper work and to transfer your belongings and money.
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) deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.
Travel expenses such as airfares are generally not an allowable deduction where the expenses are not incurred in gaining or producing assessable income under section 8-1 of the ITAA 1997.
The airfares you are seeking a deduction for are not allowable deductions.
When you incurred the cost of the first airfare you were not deriving any income from working in Australia as you had ceased all professional activities in Australia.
The other airfares relating to your return trips to Country Y are private and domestic in nature as they were to withdraw applications in Country Y and to transfer your personal belongings and money back to Australia.
You are not entitled to a deduction for any of your airfares under section 8-1 of the ITAA 1997.