Employees undertake overseas conferences, courses and study tours for a variety of reasons including to improve their qualifications and knowledge, experience another culture, travel, network, and gain new ideas and insights.
Travel expenses for overseas conferences, courses and study tours will generally be deductible if:
- They enable a taxpayer to become more proficient in carrying out their current income earning activities.
- Will likely lead to an increase in the taxpayer’s income from their current work related activities.
In contrast, non-deductible conferences, courses and study tours will involve private activities (such as sightseeing, golfing, etc.) and new employment or income activities.
It is often the case that the total expenses incurred will need to be apportioned between the tax deductible overseas conference costs and non-deductible holiday or sightseeing portion. Apportioning accommodation, meals and incidental travel expenses between the deductible and non-deductible portion is straight forward and done on an actual basis.
The deductibility of airfare costs is more complicated with three possible scenarios. (1) The ATO advises that if the main purpose of a self-education activity is for income producing purposes, then 100% of the airfare is deductible. (2) If the income earning activity is incidental and the main purpose is for private purposes then no deduction is allowed for airfare costs. (3) If the self-education activity is 50/50 for income–earning and private then claim 50% of the airfare as a deduction.