Announcements
Worried you’re missing part of your refund? Remember, the low and middle income tax offset isn’t a refund on its own – it’s used to offset (or reduce) the amount of tax you pay. The offset amount you may be entitled to is automatically applied and could range between $255-$1080, depending on things like your taxable income and how much tax you’ve paid.
Still not sure? Ask the Community

ATO Community

Deductibility of Costs incurred in establishing a business

This post is archived and may not be up-to-date.

Devotee

Views 1191

Replies 1

I have a client who is trying to establish a business in Australia, and has incurred overseas travel costs which include flights, accomodation and commercial trade visas in a number of countries, which enable him to conduct business/transact in these countries (importing etc).

 

It is a slow process, however, has and is incurring costs.

 

My question is ... Is he entitled to claim deductions for (i) travel expenses and (ii) cost of obtaining commercial trade visas?

 

I understand that these expenses may need to be quarantined as part of the non-commercial losses rules until he satisfies the criteria, however, i am tryinh to determine what if any of the costs are deductible in his cisrcumstances.

 

Thanks in advance!

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 0

Ok, I have conducted further research on this issue, and it appears the deductibility of these expenses falls under section 40-880 of the Act (ie Blackhole Expenditure in relation to a business proposed to be carried on, to the extent it is for a taxable purpose). Such deductions are claimable over 5 years.

 

As these expenses do not qualify for immediate deduction and the business has not commenced by 30 June 2019, the deduction amount will need to be deferred until the year in which the business activity commences.

1 REPLY 1

Most helpful response

Devotee

Replies 0

Ok, I have conducted further research on this issue, and it appears the deductibility of these expenses falls under section 40-880 of the Act (ie Blackhole Expenditure in relation to a business proposed to be carried on, to the extent it is for a taxable purpose). Such deductions are claimable over 5 years.

 

As these expenses do not qualify for immediate deduction and the business has not commenced by 30 June 2019, the deduction amount will need to be deferred until the year in which the business activity commences.