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.
If you think you might be eligible for the EMDG, talk to your business advisor or go to the Austrade website, www.austrade.gov.au.
