Overseas Work Trip Tax Deduction Question

Thenarrator on 12/08/2023 - 23:35

Say you are going on an overseas work trip to country "C" for 2 weeks to attend a conference in the field related to your work. This trip is primarily a business trip. You decide to tag along 1 week in country "A" for leisure and 1 week in "B" for leisure before flying to country "C" for your business trip. The flight costs are as follows:

Sydney -> country "A" = $1000
Country "A" -> Country "B" = $300
Country "B" -> Country "C" = $400
Country "C" -> Sydney = $1000

How do you apportion the flight cost to your work trip at country "C" for tax deduction purposes?

Financial Tax Deduction

Comments

  • bemybubble on 13/08/2023 - 06:18
    +1

    To me it seems travel to other countries isn’t incidental to your primary trip given the 50/50 split.

    Country B to C and C to home is your answer based on the question

  • MrHyde on 13/08/2023 - 07:11

    I am now an accountant - would be best to check with ATO (use their forums) or with an accountant.

    The primary purpose of the trip is not business as it is 50/50 based on the number of weeks you have specified. Using number of days, it may actually be less than 50/50 since weekends would not be counted work related unless you were still doing conference related work on the weekend.

    For airfare, things are not very clear. For meals/accomodation; it is easy to apportion the work related vs the non-work related.

    From https://accrumelb.com.au/blog/travel-expenses-what-you-can-a… "Deductibility of travel costs, mainly airfares, are dependent on the purpose of the travel. The current view of the ATO is that if the travel was predominantly for work related purposes, then the airfares are claimable. This would be where any sightseeing or non-work related activities are incidental to the whole trip. Conversely, if the conference is a minor part of the trip and it is more predominantly a holiday, then none of the airfares are claimable." As per that, none of the airfare would be deductible as the conference is less than 50% of the trip.

    However, @bemybubble's response also makes sense. The flight from B—>C can be considered primarily for work and as such flight C—>Home should also be deductible.

    Again, best to check with an accountant.

    • Summoner on 13/08/2023 - 08:51

      I am now an accountant

      Congratulation! :O

      • MrHyde on 13/08/2023 - 12:02
        +1

        Hahaha. I meant to say, "I am NOT an accountant"

  • brad1-8tsi on 13/08/2023 - 07:48

    You'll get away with $1850.

    My logic is that it's $1k to get home which suggests $1k to get there but the whole trip was 50:50. It was $1700 to get there. 1/2 that=$850

    • Thenarrator on 13/08/2023 - 12:14

      this also sort of makes sense

  • Summoner on 13/08/2023 - 08:46
    +1

    You can only claim your flight to and from your business trip destination "C". So, the deductible flight cost is $1,400 ($400 + $1,000) given that the purpose of your trip to "C" was 100% business purpose.

    Check out Example: travel to another destination from a work location section of ATO article.

    • Thenarrator on 13/08/2023 - 10:56

      what if the flight from "B" to "C" was only $50 because theyre so close. Is it fair given the bulk of the cost is leaving and returning australia

      • MrHyde on 13/08/2023 - 12:02
        +2

        Yes, the bulk of your trip is not for business.

      • pharkurnell on 13/08/2023 - 15:56

        Fair doesnt come into it.

  • upended on 13/08/2023 - 11:10

    This is what I'd do if I am combining work and leisure in the same itinerary.

    I'd first get an itinerary for Sydney to Country C (return trip) and save that as my baseline. I'd then add the leisure destinations to the itinerary and save that price.

    The difference between the two is what you pay for leisure. This is not professional advice, just something I'd do. Please check with your accountant if this will work for you.

    • Thenarrator on 13/08/2023 - 12:10

      solid advice. but has it been hard for you to forgo cheap deals going directly to leisure destination?

  • MITM on 13/08/2023 - 13:28
    +1

    Make separate appointments in country A and B which are business related in preparation for your onward trip to country C. Entire trip is deductible.

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