Overseas jaunts: Tax Office review of conference expenses

Do you ever go on overseas training conferences? How about a seminar on a cruise ship? Take care! The Tax Office is scrutinising claims made for training expenses that seem to “coincide” with a holiday, and especially those for self-study, so read on to be on top of these issues.

To claim a tax deduction, the tax office requires that a training expense, including the cost of any travel expenses, be related to your income earning occupation.

However, the Tax Office doesn’t look at how much someone should spend in deriving assessable income, which means, for example, that it can’t say someone should have travelled economy rather than first class. The Tax Office can only say whether the expenditure was incurred in deriving income or not. And it looks like this is precisely the issue it will be pursuing when examining the deductions that are being claimed in this area.

When it comes to overseas conferences, normally there’s no issue when claiming this as a deduction if the entire period overseas is spent at the conference. However difficulties start to emerge in apportioning expenses in cases where someone wants to attend both a conference and take a holiday. (It need not necessarily be on a time-spent basis).

Over the past years conferences that provide training in traditional “holiday” locations have become more common place – for example the conference at a Canadian ski resort where formal sessions are held between 7am and 9am so as not to interfere with a day’s skiing… (we see ads for these sorts of gigs all the time). And apparently the creative juices of travel companies have taken this one step further – by offering self study programs to attendees to allow them to choose the holiday destination of choice at which to undertake their “study”.

If this all sounds like something that is right down your alley, perhaps its time to take a breath. The Tax Office has said that these types of arrangements are under now review. In particular overseas conferences that allow attendees their own leisure time, and conferences conducted on cruises. So maybe think twice before you take up that next great offer for study in Aspen. It might just cost more than you had originally budgeted.