Are you an employee or a business owner planning to attend an overseas conference and unsure which expenses might be tax deductible? Correctly claiming your work related travel expenses — from airfares and accommodation to meals — can significantly affect your tax obligations.
Our trusted advisors are here to help you understand the basics of claiming tax deductions for overseas conference attendance. Make sure you're well-informed when it comes time to complete your tax return.
What's Deductible?
For professionals heading abroad solely for work-related conference participation, claiming deductions is relatively straightforward. Eligible work related expenses include:
- Ticket costs for the conference or seminar session access
- Travel costs, such as airfares, taxis and public transport costs needed to attend
- Accommodation costs, such as hotel stays directly linked to conference duration
- Meal costs, such as food bought (not provided) during the conference
However, deductions become more complex if the trip includes personal elements, such as family joining you or extending your stay for leisure. In such cases, only expenses directly related to the conference are deductible.
Can Deductions Be Applied When I Travel with My Partner or Spouse?
Travel expenses incurred for your partner or spouse are generally not tax deductible, however, special rules may apply depending on your circumstances. If you have been accompanied by your partner or spouse, the Commissioner has accepted the following methods to calculate non-deductible costs:
- 50/50 apportionment; or
- Marginal cost (i.e. the difference in single vs double room rates); or
- A mixture of these two approaches
For example, a full deduction for hotel room accommodation would usually be allowable where your partner stays with you if it would have cost you the same amount even if they hadn't. However, your partner's airfares may not be deductible unless they also attended the conference in connection to their professional taxable income.
Can I Claim a Deduction on Home to Work Travel Expenses?
In most occasions, you can't claim a deducation on home to work travel. One sole exception to this rule is if you are required by your employer to carry bulky tools or other items in your vehicle that you can't safely secure at work.
Can Work-Related Travel Expenses Be Deducted When Personal Activities Are Included?
The ATO specifies that if the primary purpose of the overseas trip is work-related, with personal activities being incidental, travel costs like airfares can be claimed in full. If private inclusions extend your travel, however, the deductible amount of your airfare costs correlates to the percentage of conference-related days during the trip. Conversely, if the trip is mainly for leisure with the conference being a minor component, none of the travel or accommodation costs incurred are deductible.
When it comes to accommodation, and meals, deductions are allowed for the portion of the stay and meals directly associated with the conference. For example, if you're at a hotel for eight nights but only six are for the conference, you can claim expenses for the room fees and related meal expenses for six of the days.
Additional Considerations
- Any expenses reimbursed by an employer or another party cannot be claimed as a tax deduction
- If you receive a travel allowance as part of your employment, the amount is included in your taxable income and you can automatically claim relevant expenses against it (specific rules apply)
- Costs for business or first-class travel are still deductible as the decision on expense amount rests with you, but the ATO determines deductibility
- The cost of travel insurance is not considered deductible by the ATO and rests solely with you
Record Keeping Essentials
For Employees
For employees receiving overseas travel allowances, the ATO provides guidelines on "reasonable amounts" for deductions without needing to keep detailed documentation. These amounts depend on your salary, travel destination, and sometimes occupation. However, actual expenditures exceeding these amounts require thorough recording, such as keeping all receipts, including incidental expenses.
For Sole Traders and Business Operators
For sole traders and business operators, it's crucial to keep comprehensive records, including invoices and receipts for all work-related travel expenses, and to maintain a travel diary if your work-related travel exceeds six consecutive nights. This documentation supports the work-related travel expense portion of your trip and substantiates your deductions.
"Navigating tax deductions for overseas conference attendance involves understanding which actual expenses directly relate to your professional development and ensuring you keep proper records for claim travel deductions. By focusing on the primary purpose of your travel and maintaining accurate documentation, you can maximise your tax deductions within ATO guidelines."
Frequently Asks Questions (FAQs)
Can I claim a deduction for Car Parking Fees?
Yes, you can claim a deduction for work-related parking expenses as long as the parking is for work-related purposes, such as attending an offsite meeting or event. However, you cannot claim everyday parking near your workplace, and if your employer reimbursed the parking fees, you cannot claim a deduction.
Do I need to keep a travel diary handy?
You don't need to keep a travel diary if your trip is less than 6 consecutive nights. However, if you're away for 6 or more consecutive nights, you generally need to keep one. If you receive a travel allowance from your employer, there might be exceptions where you don't need a diary even for longer trips. While not mandatory for shorter trips, keeping a travel diary can still be beneficial.
How do I claim travel deductions?
To claim a deduction for a work-related expense, you need to ensure a few key things:
1. Out-of-pocket Costs incurred
You must have paid for the expense yourself and not been reimbursed. This means the money should come directly from your pocket, without any compensation from your employer or any other party.
2. Directly Related to Income statement
The expense must be directly tied to earning your income. It should be necessary and relevant to your job duties, contributing to your ability to perform your work effectively.
3. Proof of Work-Related Travel Expenses
You must have documentation, typically a receipt, to substantiate the expense. This proof is essential for verifying that the costs were indeed incurred for work-related purposes.
If your total work-related expense claims exceed $300, you must have written evidence for all the expenses you're claiming. This includes maintaining receipts, invoices, or any other documentation that supports your claims to ensure they meet the ATO's requirements.
Unsure what else you can claim at tax time? Check out our Tax Deduction Guide for a comprehensive list.
Looking to take the guesswork out of your deductions and Tax Return? Speak to our team today for trusted advice.
Jarrod is the Managing Partner of Cutcher & Neale and heads up the Medical Accounting Services division within the firm. He has a passion for creating strong partnerships with clients that allow him to provide tailored advice so they reach their goals.
Jarrod has niche experience working with medical practitioners. His expertise allows him to guide clients from the initial stages of wealth creation as doctors in training, through to long-term wealth protection, tax planning, and retirement strategies.
