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Deductibility of cost of obtaining Commercial Visa to conduct business in a foreign country

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We have a client who paid for a "Commercial Trade Visa" to conduct business for and on behalf of his employer in Saudi Arabia.

 

The cost was not reimbursed by his employer.

 

Is he entitled to claim a deduction for the cost of this type of Visa in his personal return as part of his work-related expenses?

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Hi @Dani1,

 

Thanks for your question!

 

The expenses associated with acquiring visas relate primarily to an individual's personal right to travel to an overseas destination and generally speaking such expenses are usually characterised as being of a private nature, even if they are travelling for business or work purposes.

 

You can see on this page for businesses where visas, passports and travel insurances are all classified as private expenses. This is because these expenses are usually incurred prior to the performance of duties of employment overseas, rather than during the performance of those duties.

 

I hope this helps,

 

Rachael B.

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Best answer

ATO Certified

TaxTime Support

Replies 2

Hi @Dani1,

 

Thanks for your question!

 

The expenses associated with acquiring visas relate primarily to an individual's personal right to travel to an overseas destination and generally speaking such expenses are usually characterised as being of a private nature, even if they are travelling for business or work purposes.

 

You can see on this page for businesses where visas, passports and travel insurances are all classified as private expenses. This is because these expenses are usually incurred prior to the performance of duties of employment overseas, rather than during the performance of those duties.

 

I hope this helps,

 

Rachael B.

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ATO Certified

TaxTime Support

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Hi @Dani1,

 

Thanks for getting in touch again, Danil!

 

The crux of the issue is that unless the employee was actually performing his work duties and conducting his business while he was on the flight, it is likely to be considered to be private in nature. This is usually still the case even if the employer required the employee to obtain a particular Visa and travel overseas to perform work in another country.

 

This doesn't necessarily mean that your client cannot claim a deduction, but because we can only provide you with general guidance, I cannot make a determination for you. 

 

If you would like a definitive answer specific to your client's circumstances, then you can have a look at other options available to you.

 

I hope this has been helpful, but please let me know if there's anything else I can assist you with.

 

Rachael B.

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