Australians are amongst the largest group of people that undertake overseas travel for either work or business purposes.

We are all familiar to the overseas travel expense deductions that we can claim against such a travel as long as it was undertaken for work or business purposes. Well, we might end up thinking that claiming this might be another nightmare in terms of keeping invoices. It might be a relief to hear that the tax office expects every taxpayer to keep possession of all the invoices claimed for deductions but allows a certain degree of flexibility in terms of record keeping for such overseas expenses.

It is imperative for us to understand the concept of “reasonable allowance amount” for this purpose. “Reasonable allowance amount” is not a single amount but is a set of dollar amounts attributable to various destinations in the world as cost groups. These cost groups have an allocated dollar amount for meals, accommodation and incidentals which the tax department deems reasonable.
As a general rule, as long as the amount does not exceed the “reasonable allowance amount”, a taxpayer can claim deductions by using a travel diary.
The amounts that exceed the “reasonable allowance amount” should only be claimed when the taxpayer has appropriate invoices to validate the claim.

Such invoices should at least contain the following set of information:  

  • The business name of the seller
  • The amount of expenditure
  • The day and date of the expenditure and documentation
  • The nature of goods and services provided

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