Private ruling: Travel expenses
Published: September 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for travel and incidental expenses incurred while working 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 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. Accommodation, meal and incidental expenses are ordinarily not deductible as they are private and domestic in nature. An exception is where a taxpayer is travelling in the course of performing their work duties, for example, an interstate truck driver who travels away from home overnight. In these types of cases, the accommodation, meal and incidental expenses incurred while the taxpayer is travelling are incidental to the proper carrying out of their employment function and cease to be of a private and domestic nature. However, it is important to distinguish taxpayers who travel in the course of carrying out their employment duties from taxpayers who are living away from home. In the latter case, the taxpayer moves and takes up temporary residence away from their usual place of residence so as to be able to carry out employment duties for a time at the new (but temporary) workplace. For taxpayers who are living away from home, there is a change of job location and a temporary change of residence to a place at or near that location. For example, an employee who is transferred for three months to an office in another city and takes up temporary accommodation in that city whilst maintaining their own usual place of residence would be in this category. In this type of situation, the accommodation, meal and incidental expenses incurred while the person is living away from their usual home do not cease to be private in nature. That is, they are considered to retain their character as living expenses rather than becoming work related expenses. Miscellaneous Taxation Ruling MT 2030 discusses the difference between travelling on work and living away from home for work. It states that taxpayers who are travelling on work normally do so for comparatively short periods and as a general rule where the period does not exceed 21 days, the taxpayer will be considered to be travelling on work. In your case, you were working and living overseas for a period of approximately six months. Your employer paid for accommodation and airfares for you and your family while overseas. It is considered that you were living away from home for work rather than travelling on work. That is, it is not considered that travel was a part of your actual work duties. Rather, you were required to take up temporary residence near your new work location. Therefore, your travel and incidental expenses are considered to retain their character as living expenses. As these expenses are private in nature, a deduction is not allowable.

Relevant facts: Your employer required you to travel overseas for a period of approximately six months. | Your employer paid for accommodation and airfares for you and your family whilst overseas, but not your meal and incidental expenses. | Whilst overseas, you were paid by your Australian employer. | You maintained your Australian residence while overseas. | The purpose of the trip was to gain an understanding of the technology used in a particular field.