Private ruling: Meal expenses
Published: March 2014
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for your meal expenses during work days while overseas on sabbatical leave? | A1: Yes. | Q2: Are you entitled to a deduction for your meal expenses during your private days while overseas on sabbatical leave? | A2: No.

Relevant facts and circumstances: You are an employee. You went on sabbatical leave. During this period you attended conferences and gave guest talks at several institutions. You also had a number of private days. During the sabbatical leave period you were provided a travel grant. All your airfares and accommodation were paid for. You have records of your expenses.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: 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. TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). Expenditure on meals ordinarily has the character of a private or domestic expense. However, the occasion of the outgoing may operate to give the expenditure the essential character of an income-producing expense. Paragraph 89 of TR 98/9 elaborates: Where a taxpayer is away from home overnight in connection with a self-education activity, accommodation and meals expenses incurred are deductible under section 8-1. (Examples include an overseas study tour or sabbatical, a work-related conference or seminar or attending an educational institution.) They are part of the necessary cost of participating in the tour or attending the conference, the seminar or the educational institution. We do not consider such expenditure to be of a private nature because its occasion is the taxpayer's travel away from home on income-producing activities. In your case, there is a direct nexus between your employment and the work you carried out attending conferences and giving guest talks during your overseas sabbatical. These activities will improve or maintain the skill and knowledge required to perform your role as an employee. Therefore you are entitled to a deduction for your meal expenses during your work days. However, the meal expenses incurred during private days are regarded as private in nature and are not an allowable deduction.