Claiming deductions on overseas trips

Many business owners take trips overseas this year to promote sale of their products or for other reasons and it’s important to undersand what you can claim as a tax deduction.

Provided that your trips are solely for business purposes, you will be able to claim all the costs as a tax deduction. However, if the trip is also for personal reasons, say you tacked on a few days holidaying and sightseeing, you will only be able to claim a deduction for the portion of the trip that is business related.

As with all tax deductions, you need to keep proof of all your expenses you claim as a tax deduction.

This includes written evidence of expenses such as airfares, accommodation, food, drink etc. Examples of written evidence include invoices or receipts.

If your overseas travel exceeds 6 nights in a row, you should also keep a travel diary or itinerary, documenting dates, places, times and durations of your activities while travelling.

In addition to a tax deduction, you may also be eligible for the Export Market Development Grant (EMDG).

The EMDG scheme, which is administered by Austrade, reimburses businesses up to 50% for eligible overseas marketing expenses.

To be eligible for the EMDG you need to:

  • be an Australian based business
  • have annual income of less than $50million
  • have export sales and
  • have spent at least $15,000 on oversees promotional activities during the year.
  • The types of expenses that you could claim include:

  • hiring overseas representatives or marketing consultants
  • marketing visits
  • communication
  • promotional literature and advertising
  • distributing free samples
  • attending trade fairs and seminars or conducting in-store promotions
  • overseas buyers and
  • registration and/or insurance of eligible intellectual property
  • The minimum grant is $5,000, whilst the maximum available is $150,000, with a maximum of 8 grants for eligible trips.

    To claim the EMDG you will need to keep evidence of all your expenses, just as you would when claiming a tax deduction.