Date of advice: 16 May 2019
Published: July 2019
Ruling period: FBT year ending 31 March 20XX | FBT year ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Will the otherwise deductible rule under section 52 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA ) apply to reduce the taxable value of fringe benefits provided to employees in the six scenarios provided? | A1: Scenario 1 Yes in part Scenario 2 Yes in part Scenario 3 Yes in part Scenario 4 Yes in full Scenario 5 Yes in full Scenario 6 Yes in full

Relevant facts and circumstances: An employee is travelling to Country A) from Australia to attend a business conference. The conference relates to the employee's work. When employees are sent on these conferences they will often embark on dual purpose travel and remain in the location for an extended stay for private purposes. The employer in a not-for-profit entity and is tax-exempt. The airfares ae invoiced to, and paid by, the employer. Travel diaries are kept by the employees. In some circumstances the employees travel with their spouses. For those employees who travel with their spouse - airline tickets are purchased separately and privately by their spouse. On private days in the Country A the employees will remain within the city where the conference is being held, to undertake the private activities. Any private travel is not funded by the employer. Travel diaries will be recorded by the employee travelling outlining activities undertaken. Scenario 1 Date Day Activity XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Private Activities XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Travel from the Country A to Australia XX/XX Tuesday Travel from the Country A to Australia Scenario 2 Date Day Activity XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia Scenario 3 Date Day Activity XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Rest day after long haul travel XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Private Activities XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia Scenario 4 Date Day Activity XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia Scenario 5 Date Day Activity XX/XX Wednesday Travel from Australia to the Country A XX/XX Thursday Travel from Australia to the Country A XX/XX Friday Rest day after long haul travel XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Conference XX/XX Wednesday Travel from the Country A to Australia XX/XX Thursday Travel from the Country A to Australia Scenario 6 Date Day Activity XX/XX Wednesday Travel from Australia to the Country A XX/XX Thursday Travel from Australia to the Country A XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Rest day after long haul travel and conference XX/XX Wednesday Private Activities XX/XX Thursday Travel from the Country A to Australia XX/XX Friday Travel from the Country A to Australia

Relevant legislative provisions: Subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 | Section 20 of the Fringe Benefits Tax Assessment Act 1986 | Section 23 of the Fringe Benefits Tax Assessment Act 1986 | Section 24 of the Fringe Benefits Tax Assessment Act 1986 | Section 8-1 of the Income Tax Assessment Act 1997

Reasons for decision: Summary: The employer will be providing the employee with overseas travel to attend a work conference in the Country A. The employer will be paying the cost of the return airfare from Australia to the Country A. In general terms, the definition of 'fringe benefit' in subsection 136(1) of the FBTAA provides that a fringe benefit will arise from the flights if the following conditions are satisfied: (i) the flight is a 'benefit'; (ii) the 'benefit' is provided to an employee or an associate of an employee; (iii) the 'benefit' is provided by the employer, an associate of the employer or a third party under an arrangement involving the employer or an associate; (iv) the 'benefit' is provided in respect of the employment of the employee; and (v) the 'benefit' is not one of the benefits specifically excluded from being a 'fringe benefit' by paragraphs (f) to (s) of the 'fringe benefit' definition. | Detailed Reasoning - Is the flight a 'benefit'?: "Benefit' is defined in subsection 136(1) of the FBTAA to include: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility As the provision of transport in an aircraft comes within this definition each of the flights will be a benefit. | Detailed Reasoning - Is the 'benefit' provided to an employee or an associate of an employee?: The flight will be provided to an employee. | Detailed Reasoning - Is the 'benefit' provided by the employer, an associate of the employer or a third party under an arrangement involving the employer or an associate?: The flights will be provided by the employer. | Detailed Reasoning - Is the 'benefit' provided in respect of the employment of the employee?: 'In respect of' is defined in subsection 136(1) of the FBTAA to include: by reason of, by virtue of, or for or in relation directly or indirectly to, that employment In considering the reason for the overseas travel being provided it is relevant to note that it is not provided to any person. Rather it is provided to an employee that is related to their work. In this case, the employee's primary purpose for travelling to the Country A is to attend a work related conference. This provides the necessary connection to the employment of the employee as they will be receiving the benefit because they are an employee. | Detailed Reasoning - Is the 'benefit' specifically excluded from being a 'fringe benefit' by paragraphs (f) to (s) of the 'fringe benefit' definition?: Paragraphs (f) to (s) of the 'fringe benefit' definition do not apply to the flights. | Detailed Reasoning - Expense payment benefit: Section 20 of the FBTAA provides that an expense payment benefit will arise in two ways: · where the provider (in this case the employer) reimburses the (recipient) in this case the employee) for expenses they incur, or · where the provider (in this case the employer) pays a third party in satisfaction of expenses incurred by the recipient (in this case the employee). As the employer proposes to be invoiced by the provider of the airfares and pay them directly on behalf of the employee, an expense payment benefit will arise. Therefore the benefit will be an expense payment fringe benefit. | Detailed Reasoning - Taxable value of expense payment fringe benefits: The taxable value of an expense payment fringe benefit is determined under Section 23 of the FBTAA which states as follows: Subject to this Part, the taxable value in relation to a year of tax of an external expense payment fringe benefit provided during the year of tax is the amount of the payment referred to in paragraph 20(a), or the reimbursement referred to in paragraph 20(b), as the cases requires, reduced, in a case to which paragraph 20(a) applies, by the amount of the recipients contribution. In simple terms, the taxable value of an expense payment fringe benefit is either the amount of payment made by the employer on behalf of the employee for an employee obligation or an amount of reimbursement paid by the employer to the employee for an obligation the employee has paid or incurred. In this case, the employer has stated that the expense payment fringe benefit relates to them paying a third party for airline tickets for their employee to attend a conference overseas. Therefore the reimbursement of the employee's travel expenses gives rise to an external expense payment fringe benefit as set out in section 23 of the FBTAA. | Detailed Reasoning - Otherwise deductible rule: The taxable value of an expense payment fringe benefit may be reduced in accordance with the otherwise deductible rule (ODR) under section 24 of the FBTAA. Subsection 24(1) of the FBTAA permits a reduction of the taxable value of an expense payment fringe benefit under the ODR where all the necessary conditions of that section are met. Broadly, this means that the taxable value may be reduced by any amount an employee would hypothetically been entitled to claim as an income tax deduction if the employer had not paid a third party or reimbursed the employee in satisfaction of an expense incurred by the employee. However, the ODR only applies where the employee would have been entitled to a once-only deduction for the expenditure paid or reimbursed by the employer. A once-only deduction is defined, in subsection 136(1) of the FBTAA, to mean one that is wholly or partly allowable under the income tax law in only one year (for example, this would exclude deductions for depreciation expenses). The question of whether or not the employer would have been entitled to an income tax deduction for the expense is irrelevant. For an employer to reduce the taxable value of a fringe benefit under the ODR an employee would have had to incur the expense solely relating to the performance of their employment related duties and that expense would have to be wholly deductible to that employee for income tax purposes. The employee must substantiate to the employer each year prior to lodgement of the relevant FBT return, the extent to which the expense payment fringe benefit would have been otherwise deductible to the employee. This can be supplied as a declaration in the approved form by the Commissioner. We have made the assumption that the employee will be providing a declaration to you as the employer. Therefore, this condition will be met. | Detailed Reasoning - Deductibility of expenses: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for a loss or outgoing incurred in gaining or producing assessable income. However, no deduction is allowed for losses or outgoings to the extent to which they are of a capital, private or domestic nature or are incurred in gaining or producing exempt income, or are otherwise prevented from being deductible by a specific provision of ITAA 1997. For any deduction to be allowable under section 8-1 of the ITAA 1997 you must be able to demonstrate that there is a real and direct connection between the outgoing and the gaining of your assessable income, so that the outgoing is incidental and relevant to the actual activities that gain assessable income. The extent to which overseas travel expenses would be an allowable income tax deduction if incurred by an employee is determined under the general deduction provisions in section 8-1 of the ITAA 1997. An expense is deductible under this section when the essential character is that of an income producing expense. The essential character is to be determined by an objective analysis of all the surrounding circumstances (see Fletcher & Ors (199) 173 CLR 1 at 17; 91 ATAC 4950 at 4957 and 4958; (1991) 22 ATR 613 at 622). As stated in Taxation Ruling TR 95/33 (TR 95/33), expenditure will generally be deductible if its essential character is that of expenditure that has a sufficient connection with the operations or activities which more directly gain or produce the taxpayers' assessable income. The essential character of an expense is a question of fact to be determined by reference to all the circumstances. Apportionment of an expense is required if it has both an income producing purpose and another purpose. In this case, the overseas travelling expenses (airfares) incurred by the employee to attend a conference are in respect of their employment and are incurred in gaining or producing assessable income and, therefore, are allowable income tax deductions under section 8-1 of the ITAA 1997. | Detailed Reasoning - Self-education expenses: The Commissioners view on the deductibility of self-education expenses is contained in Taxation Ruling TR 98/9 (TR 98/9). TR 98/9 examines the deductibility of self-education expenses. Where your income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. In accordance with TR 98/9, expenses of self-education will satisfy the requirements of section 8-1 of the ITAA 1997 if: 12. Self-education expenses are deduction under section 8-1 where they have relevant connection to the taxpayer's current income-earning activities. 13. If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge,and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. 14. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future, the self-education expenses are allowable as a deduction. The airfares for the return trip from the overseas business location will also be work related expenditure. However, where the trip has a private purpose, consideration has to be given to whether an apportionment of the airfare between business and private purposes will be warranted. TR 98/9 sets out the circumstances in which self-education expenses are allowable deductions. Paragraphs 63 to 70 of TR 98/9 discuss the application of the general deduction provision to overseas travel expenses. TR 98/9 states that if the purpose of a study tour or attendance at a work related conference or seminar is the gaining or producing of assessable income, the existence of an incidental private purpose does not affect the characterisation of the expenses as wholly incurred in gaining assessable income. TR 98/9 provides examples indicating that where overseas travel is undertaken voluntarily and is planned to be for business and private purposes equally, expenses of a single outlay that serve both purposes should be apportioned. The examples in paragraphs 67 to 70 of TR 98/9 are listed below: 67. Example: Glenn, a qualified architect, attends an eight-day work-related conference in Hawaii on trends in modern architecture. One day of the conference involves a sight-seeing tour of the island and a game of golf is held on the final afternoon of the conference. As the main purpose of attending the conference is the gaining or producing of income, the total cost of the conference (air fares, accommodation and meals) is allowable. 68. The existence of private pursuits, such as the island tour and the game of golf, is purely incidental to the main purpose and does not affect the characterisation of the conference expenses as wholly incurred in gaining assessable income. 69. Example: Jenny, a doctor, was holidaying in Cairns when she became aware of a work-related seminar on the current treatment of cancer patients. The cost of the half-day seminar was $200. Jenny is able to claim a deduction for the cost of the seminar because it is directly attributable to an income-earning purpose. However, no part of her airfare to Cairns or her holiday accommodation is an allowable deduction. 70. Example: Francesco, a paediatrician, has 2 equal purposes when he decides to attend a five-day international conference on paediatrics in Singapore to be followed by a seven-day holiday in Thailand. The conference package is $2,500 ($1,000 return air fare, $500 for the cost of the conference and $1,000 for accommodation and meals at the conference venue). Francesco paid another $2,000 for accommodation, meals and car hire for the 7 day holiday in Thailand. Francesco is allowed a deduction of $1,500 for the conference cost and the accommodation and meals expenses at the conference. Only half of the return air fare ($500) is allowed as the expense was incurred for two equal purposes, one income-earning and the other private. The other expenditure of $2,000 relating to the holiday in Thailand is private in nature and not allowable as a deduction. In this case, the employee is undertaking a work related overseas travel to attend a conference. Six different scenarios have been presented to us and will be examined. Generally speaking, the employer would be able to reduce the taxable value of the expense payment fringe benefit under the otherwise deductible rule, as the employee would be entitled to claim a deduction if they had incurred the expenses them self. | Detailed Reasoning - Apportionment of business and private: The airfares for the return trip to the overseas business location is a work related expenditure. However, where the trip has a private purpose, consideration has to be given to whether an apportionment of the airfare between business and private purposes will be warranted. In cases where the airfare relates to both work related and private purposes, an apportionment of the expense is required. TR 98/9 discusses the apportionment of travel expenses. In TR 98/9 paragraph 64 states that 'If the purpose of a study tour or attendance at a work-related conference or seminar is the gaining or producing of income, the existence of an incidental private purpose does not affect the characterisation of the related expenses as wholly incurred in gaining assessable income'. TR 98/9 at paragraph 65 further states that if travel to a work-related conference was mainly devoted to a private purpose, such as having a holiday, and the gaining or producing of income was merely incidental to the private purpose, only those expenses directly attributable to the income-earning purpose would be allowable. In Federal Court Case Ronpibon Tin v FC of T (1949) 78 CLR 47; 4 AITR 236 the Court expressed the view that there are generally two kinds of items of expenditure that require apportionment: those items that are capable of dissection; and those that cannot be dissected but should be apportioned on the basis that they serve more than one objective. The latter would clearly apply to an airfare purchased for both work and private purposes. The question of apportionment was discussed in Case R13 84 ATC 168; 27 CTBR (NS) Case 64 ( Case R13 ). In that case, a dentist spent six weeks overseas, five days of which were spent at a Dental Congress in Paris and the rest of the time was spent sightseeing. The trip was undertaken by the taxpayer with two objects in mind - attending the Dental Congress and having a holiday. The airfare served both objects, however only the first object qualified the expense as deduction. The Commissioner apportioned the expenditure on the airfares on a time basis and allowed the taxpayer a deduction of 5/40ths of the air fare which represented the five days spent at the Congress. However, the Administrative Appeals Tribunal held that the proper method of apportioning the expense was to determine the degree of predominance attached to each object. In this case, each object was of equal weight and therefore, one-half of the airfare was allowed as a deduction. Where the private days are equal to or more than the period of conference we need to consider the factors in No 3 Board of Review Case R13 84 ATC 168 and Ure v Federal Commissioner of Taxation 81 ATC 4100 ( Ure ). In No 3 Board of Review Case R13 84 ATC 168 the board of review looked at the purpose of an overseas trip to determine the apportionment of air fares. In his reasons for the decision Dr Gerber applied Ure and stated at page 170 'It is now clear beyond doubt that whether or not an outgoing has been incurred in gaining or producing assessable income demands an examination of the purpose for which the moneys were expended' . The board considered that the taxpayer's motivation for travelling overseas was to attend the conference and to take a holiday. Consequently they apportioned the air-fare on the basis of one-half business and one-half private. In this case, the employee will be attending a work related conference in the Country A. Six scenarios have been provided to us and will now be examined. The employer will pay a third party directly for the cost of the return airfare for the purposes of the employee attending a conference. The employer has stated that employee's primary purpose for travelling to the Country A is to attend a work related conference. | Detailed Reasoning - Activity: XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Private Activities XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Travel from the Country A to Australia XX/XX Tuesday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the Country A would be deductible. However, the employee stays for nine extra days for private purposes. This indicates that the existence of private pursuits is more than incidental. The employee will spend significantly more time on leave in the Country A compared to time at the conference. Whilst, the initial reason for the travel was to attend the conference, the fact that the employee has extended the trip after the conference creates an additional purpose for that travel. Consequently, it is necessary to apportion the airfare expenses incurred between the two purposes. The employee's situation is not dissimilar to that mentioned above in paragraph 70 of TR98/9. In that situation there were two purposes for the travel and the employee was allowed a deduction for half of the airfare. It is considered that the employee's travel has two equal purposes. Therefore, the employee would be entitled to a deduction for fifty percent of the airfare expenses that he incurred. The overseas airfare expense incurred would be 50% deductible under section 8-1 of the ITAA 1997. The taxable value of the expense payment fringe benefit will be the full cost of the airfares and would be reduced by 50% only under the 'otherwise deductible rule'. | Detailed Reasoning - Activity: XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the Country A would be deductible. However, the employee stays for six extra days for private purposes. It is considered that the employee's travel has two equal purposes. Therefore, the employee would be entitled to a deduction for fifty percent of the airfare expenses that he incurred. The overseas airfare expense incurred would be 50% deductible under section 8-1 of the ITAA 1997. The taxable value of the expense payment fringe benefit will be the full cost of the airfares and would be reduced by 50% only under the 'otherwise deductible rule'. | Detailed Reasoning - Activity: XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Rest day after long haul travel XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Private Activities XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the Country A would be deductible. However, the employee stays for seven (7) extra days for private purposes whilst the work related conference goes for only two (2) days. On this occasion it could be considered that the private component of the trip is more than incidental to the business related work conference. This is largely due to the significant amount of personal days (7) compared to the business days (2). Whilst the initial reason for the travel may have been to attend the conference, the fact that the employee has extended the trip after the conference creates an additional purpose for that travel. Consequently, it is necessary to apportion the airfare expenses incurred between the two purposes. It is considered that the employee's travel has two equal purposes. Therefore, the employee would be entitled to a deduction for fifty percent of the airfare expenses that he incurred. The overseas airfare expense incurred would be 50% deductible under section 8-1 of the ITAA 1997. The taxable value of the expense payment fringe benefit will be the full cost of the airfares and would be reduced by 50% only under the 'otherwise deductible rule'. | Detailed Reasoning - Activity: XX/XX Sunday Travel from Australia to the Country A XX/XX Monday Travel from Australia to the Country A XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Conference XX/XX Wednesday Conference XX/XX Thursday Conference XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Private Activities XX/XX Tuesday Private Activities XX/XX Wednesday Private Activities XX/XX Thursday Private Activities XX/XX Friday Travel from the Country A to Australia XX/XX Saturday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the COUNTRY A would be deductible. The employee stays for four (4) extra days for private purposes, whilst the business component is for nine (9) days with a weekend in between. It is clear that the purpose of the trip to State AA, Country A is to participate in the self-education activity which is for income producing purposes. Therefore, the employee would be entitled to a deduction for 100 % of the airfare expenses that they incurred. The overseas airfare expense incurred would be 100% deductible under section 8-1 of the ITAA 1997. The taxable value of the expense payment fringe benefit will be the full cost of the airfares and would be reduced by 100% under the 'otherwise deductible rule'. | Detailed Reasoning - Activity: XX/XX Wednesday Travel from Australia to the Country A XX/XX Thursday Travel from Australia to the Country A XX/XX Friday Rest day after long haul travel XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Conference XX/XX Wednesday Travel from the Country A to Australia XX/XX Thursday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the Country A would be deductible. The employee does not add any extra days for personal reasons. It is clear that the purpose of the trip to the Country A is to participate in the self-education activity which is for income producing purposes. Therefore, the employee would be entitled to a deduction for 100% of the airfare expenses that they incurred. The overseas airfare expense incurred would be 100% deductible under section 8-1 of the ITAA 1997. The taxable value of the expense payment fringe benefit will be the full cost of the airfares and would be reduced by 100% under the 'otherwise deductible rule'. | Detailed Reasoning - Activity: XX/XX Wednesday Travel from Australia to the Country A XX/XX Thursday Travel from Australia to the Country A XX/XX Friday Conference XX/XX Saturday Weekend XX/XX Sunday Weekend XX/XX Monday Conference XX/XX Tuesday Rest day after long haul travel and conference XX/XX Wednesday Private Activities XX/XX Thursday Travel from the Country A to Australia XX/XX Friday Travel from the Country A to Australia It is accepted that the employee's attendance at the conference in the Country A is for a work related purpose. Thus at least part of the expense incurred by the employee in travelling to the Country A would be deductible. The employee adds two (2) days to the trip - one for rest and one for private activities. It is clear that the purpose of the trip to State AA, Country A is to participate in the self-education activity which is for income producing purposes. Therefore, the employee would be entitled to a deduction for 100% of the airfare expenses that they incurred. The overseas airfare expense incurred would be 100% deductible under section 8-1 of the ITAA 1997.