ATO Interpretative Decision
ATO ID 2002/807 (Withdrawn)
Deductions: meal expenses whilst on overnight business travel
FOI status: may be released
||This ATO ID is withdrawn because it is no longer necessary. The issue addressed in the ATO ID is covered by TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees' travel? .
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 7 July 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the taxpayer entitled to claim a deduction for meal expenses incurred when travelling overnight on business under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Yes, the taxpayer is entitled to claim a deduction for meal expenses incurred while travelling overnight on business under section 8-1 of the ITAA 1997.
The taxpayer is in business. The taxpayer travels away from home for several nights every month in connection with the business. The taxpayer incurs expenses for meals while away from home.
Reasons for Decision
Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in carrying on a business. However, no deduction is allowed for expenses to the extent to which they are of a capital, private or domestic nature.
Generally, meal expenses are not allowable as a deduction under section 8-1 of the ITAA on the basis there isn't a sufficient connection between the expenditure and the income earning activities of a taxpayer. However, there is, no general proposition that meal expenses can never be deductible: FC of T v. Cooper 91 ATC 4396; (1991) ATR 1616, Roads and Traffic Authority of NSW v. FC of T 93 ATC 4508; (1993) 26 ATR 76, Re Carlaw and FC of T 95 ATC 2166; (1995) 31 ATR 1190, AAT decision in Case 9/96 96 ATC 186.
The deductibility of expenditure on meals will depend on the essential character of the expenditure on the basis of the facts of each case. In this case, the relevant expenses are considered to be incurred in carrying on the business as the business requires overnight travel. The meal expenses are not considered to be private in nature.
As a result, the taxpayer's meal expenses incurred while travelling overnight in the course of the taxpayer's business, are deductible under section 8-1 of the ITAA 1997, provided the relevant substantiation provisions of the ITAA 1997 are satisfied.
Date of decision: 2 August 2002
|Year of income:||Year ended 30 June 2001|
Income Tax Assessment Act 1997
FCT v. Cooper
91 ATC 4396
(1991) 21 ATR 1616
(1991) 29 FCR 177
Carlaw & FCT, Re AAT Case 10,363
(1995) 95 ATC 2166
(1995) 31 ATR 1190
Roads Traffic Authority of NSW v. FCT
(1993) 93 ATC 4508
(1993) 26 ATR 76
(1993) 43 FCR 223
96 ATC 186
Meal & food expenses
Siebel/TDMS reference number: DW283802; 1-BKOH1DG
Business line: Small Business/Individual Taxpayers
Date of publication: 22 August 2002