Private ruling: Travel expenses
Published: October 2011
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you entitled to a deduction for travel expenses? | 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 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. 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). Taxation Ruling IT 2481 provides that where you voluntarily transfer employment and incur expenditure in moving or relocating from one place of residence to another, that expenditure is not deductible. In these circumstances, you are not travelling on your work, rather you are travelling to your work. The cost of travel between home and work is generally incurred to put you in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34). You are therefore not entitled to a deduction for the expenses relating to your travel to Australia as you are travelling to work, rather than on work. That is, the expenses were incurred to put you in a position to earn assessable income, rather than in the course or earning that income. Also, the expenses are considered to be private in nature.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: During the 2009-10 financial year you accepted a contract from a company to work in Australia. | Per this contract, this company sponsored your class 457 Temporary resident visa. | To fulfil this contract you had to travel from overseas to Australia. | You have incurred expenses for this travel.