The Inland Revenue has published a draft question we’ve been asked – Deductibility of overseas expenses, which considers whether income tax deductions can be claimed for overseas travel costs (other than meal costs). It also covers how to apportion costs when only part of the total amount incurred is deductible.

CA ANZ support publication of the Commissioner’s current view on this issue. 

Key CA ANZ recommendations include:

• The draft item explicitly confirm that the views expressed also apply to the deductibility of overseas travel costs of an employee. 
• The discussion regarding apportionment should be expanded to highlight other acceptable methods for doing so.
• The case law referred to in the draft item should be followed with caution.