Private ruling: Travel expenses
Published: April 2013
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for accommodation, (including your hotel on arrival), meals, transport and incidentals while living away from home? | A1: No.


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 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 private or domestic nature. Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless one arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166). Accommodation and meal expenses are living expenses and as such are intrinsically private or domestic in nature. However, these expenses may be considered to be work related where they are incurred while an employee is travelling on work. Miscellaneous Taxation Ruling MT 2030 discusses the difference between travelling on work and living away from home for work. It states that travelling on work occurs where the employee is travelling in the course of carrying out their duties of employment (such as an interstate truck driver) whereas a person is living away from home for work where they have a new work location. In your case, your employer has assigned you to work overseas for a period. It is considered that during this period you are living away from home for work rather than travelling on work. That is, during this period you are living overseas and you travelled because your work has been moved to this location for this period. Travel is not a part of your actual work duties. As you are not travelling in the course of carrying out employment duties, no deduction is available for the accommodation, transport, meal and incidentals expenses you incur when working away from your usual place of residence. Further to this the essential character of your expenditure is of a private or domestic nature. The expenses incurred by you to stay in close proximity to your work-place are a prerequisite to the earning of assessable income and were not expenses incurred in the course of gaining or producing that income.

Relevant facts: You are employed in Australia | Your principal place of residence is in City A. | You have been assigned by your employer to work overseas. | You will remain an employee of your Australian employer and will return to City A at the expiry of your assignment. | Your airfare from Australia has been paid by your employer. | You have incurred costs for accommodation (including the hotel when you first arrived), meals and incidentals.