TAX ALERT - TRAVEL EXPENSES BEING TARGETED BY THE AUSTRALIAN TAXATION OFFICE

Lowe Lippmann Chartered Accountants

The Government has recently made various announcements in relation to denying or restricting tax deductions in relation to travel expenses incurred by taxpayers.

Firstly, the Treasury has released draft legislation in relation to denying tax deductions for travel expensesn relating to inspecting, maintaining or collecting rent for a residential rental property.

The draft legislation is effective from 1 July 2017 and designed to apply to certain taxpayers only. the guidance released from the Treasury includes various examples to explain which travel expenses may be denied a tax deduction, however, some consider the examples do not cover all components of travel expenses and create uncertainty for taxpayers.

Secondly, the Australian Taxation Office (ATO) recently released Draft TR 2017/D6: Income tax and fringe benefits tax: when are deductions allowed for employees travel expenses?

The draft ruling consolidates and updates a number of former ATO guidance documents. It sets out the ATO's interpretations on the general principles for determining whether an employee's travel and accommodation would otherwise be deductible for income tax and FBT purposes.

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