Private ruling: Work related expenses - accommodation
Date of advice: 7 March 2017
Published: August 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 August 2016

Ruling: Q1: Are your accommodation expenses in Australia deductible? | A1: Yes

Relevant facts and circumstances: You are a resident of Country A for taxation purposes. Your employer is based in Country B, and you are based in Country A. Your employment is within the entertainment industry. In 2016 you were sent by your employer to work in Australia in live performances. These performances will take place in various venues across Australia and you will be continually travelling between these venues as part of your employment duties whilst in Australia. Your work in Australia commenced shortly after arriving and you will be leaving Australia before 30 June 2017. You receive an Accommodation allowance, paid by your employer for the purpose of obtaining suitable accommodation in Australia whilst you are working here, and the allowance is listed separately on your payslip, and has been taxed at a rate of 40%. You were advised by your employer that you can claim the accommodation expenses on your Australian taxation return, and you will be self -assessing as non-resident when you lodge your Australian income tax return this at the end of the 2016-17 year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | A new tax system (Goods and Services Tax) Act 1999

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature. In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. Where the duties of the job require a taxpayer to travel in the course of undertaking their work duties, the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). Accommodation expenses As with the general rules regarding travel between home and work, accommodation and living expenses are normally private or domestic in character. The occasion of the outgoing may give the expenditure the essential character of an income producing expense. An example is where the expenditure is incurred while away from home overnight on a work related activity. Where a taxpayer is away from home overnight in connection with an income producing activity, accommodation expenses are generally deductible. | Detailed Reasoning - Application to your circumstances: You have advised us that you are based in the Country A and are also a tax resident of that country, and your overseas employer has sent you to Australia to work. You have also advised that the nature of your work whilst in Australia requires you to travel from venue to venue. Based on these facts, you can claim the cost of the accommodation under section 8-1 of the ITAA 1997. You also asked if only having Company X receipt changed the deductibility of these expenses. The fact that the receipt is from Company X does not change this, as long as the receipt meets the requirements of a tax invoice. | Detailed Reasoning - Requirements of tax invoices: Section 29-70 (1) of A new tax system (Goods and Services Tax) Act 1999 (the GST Act), outlines the requirements of a tax invoice. Tax invoices for taxable sales of less than $1,000 must include enough information to clearly determine the following details: ● That the document is intended to be a tax invoice. ● The seller's identity. ● The seller's Australian business number (ABN). ● The date the invoice was issued. ● A brief description of the items sold, including the quantity (if applicable) and the price. ● The GST amount (if any) payable - this can be shown separately or, if the GST amount is exactly one- eleventh of the total price, as a statement such as 'Total price includes GST'. ● The extent to which each sale on the invoice is a taxable sale (that is, the extent to which each sale includes GST). In addition, tax invoices for sales of $1,000 or more need to show: ● The buyer's identity or ABN. | Detailed Reasoning - Other relevant comments: Further information about Accommodation allowances and expenses when travelling away from home for work can be located on our website www.ato.gov.au by searching for reference QC 50760. Further information about Requirements of tax invoices can be located on our website www.ato.gov.au by searching for reference QC 22438.