This Division sets out the substantiation rules that apply to certain types of losses or outgoings.

(1) The requirements of this Division apply to an individual.

(2) They also apply to a partnership that includes at least one individual, as if the partnership were an individual.

(3) They do not apply to any other entity.

To deduct certain types of losses or outgoings, you need to substantiate them under this Division.

(1) If an individual is not an employee, but is a *PAYE earner, this Division applies to him or her as if:

(2) If an entity is not an employer, but pays (or is liable to pay) *PAYE earnings, this Division applies to the entity as if:

(1) To deduct a *work expense:

Subdivision 900-E tells you about the evidence you need.

(2) If your expense is for fuel or oil, you have a choice of either:

Subdivision 28-H tells you about odometer records.

You need to keep travel records if your expense is for travel that involves you being away from your ordinary residence for 6 or more nights in a row.

The travel may be within or outside Australia. Subdivision 900-F tells you about travel records.

(1) Once you have the material required by section 900-15 or 900-20, you must retain it for 5 years. There is no need to lodge it with your *income tax return. The Commissioner may require you to produce it: see Subdivision 900-G. The period for which you must retain it is called the retention period.

(2) The 5 years start on the due day for lodging your *income tax return for the income year. If you lodge your return later, the 5 years start on the day you lodge it.

(3) However, the *retention period is extended if, when the 5 years end, you are involved in a dispute with the Commissioner that relates to the expense. See section 900-170.

(4) If you do not retain the material for the *retention period, you cannot deduct the expense. If you have already deducted it, your assessment may be amended to disallow the deduction.

(5) If you lose any of the material, there are rules that might help you in section 900-205.

General

(1) A work expense is a loss or outgoing you incur in producing your salary or wages.

(2) Travel allowance expenses count as *work expenses. A travel allowance expense is a loss or outgoing you incur for travel that is covered by a *travel allowance. The loss or outgoing must:

(3) A travel allowance is an allowance your employer pays or is to pay to you to cover losses or outgoings:

The travel may be within or outside Australia.

(4) Meal allowance expenses count as *work expenses. A meal allowance expense is a loss or outgoing that you incur for food or drink that is covered by a *meal allowance.

(5) A meal allowance is an allowance that your employer pays or is to pay to you as an employee to enable you to buy food or drink. However, an allowance is not a meal allowance if it is a *travel allowance or part of one.

(6) A loss or outgoing to do with a *motor vehicle is not treated as a *work expense unless it is:

However, most losses or outgoings to do with a *motor vehicle are covered by the rules about *car expenses. See Division 28 and Subdivision 900-C.

(7) In addition to losses or outgoings within the general scope of subsection (1), any of the following is a *work expense:

(1) If the total of all the *work expenses (including *laundry expenses, but excluding *travel allowance expenses and *meal allowance expenses) that you want to deduct is $300 or less, you can deduct them without getting written evidence or keeping travel records.

(2) This limit can be increased from time to time by regulations made under section 909-1.

(3) A *transport expense that Subdivision 900-I (Award transport payments) lets you deduct without following the rules in this Division does not count towards this limit.

(1) Even if the *work expenses you claim total more than $300, you can still deduct up to $150 of *laundry expenses without getting written evidence of them.

(2) However, this exception does not increase the $300 limit in section 900-35 to $450: your *laundry expenses still count toward that limit.

(3) This limit can be increased from time to time by regulations made under section 909-1.

(4) A laundry expense is a *work expense to do with washing, drying or ironing clothes (but not dry cleaning).

You may be able to deduct, without getting written evidence or keeping travel records, a *transport expense you incurred that is related to an allowance or reimbursement paid or payable to you by your employer under an *industrial instrument that was in force on 29 October 1986. Subdivision 900-I tells you about this.

(1) You can deduct a *travel allowance expense for travel within Australia without getting written evidence or keeping travel records if the Commissioner considers reasonable the total of the losses or outgoings you claim for travel covered by the allowance.

(2) In deciding whether the total of the losses or outgoings you claim is reasonable, the Commissioner must take into account the total of the losses or outgoings of the following kinds that it would be reasonable for you to incur for the travel:

(1) You can deduct a *travel allowance expense for travel outside Australia without getting written evidence under the same conditions as for domestic *travel allowances, except that you still have to get written evidence for losses or outgoings for accommodation.

(2) Consequently, in deciding whether the total of the losses or outgoings you claim is reasonable, the Commissioner must disregard losses or outgoings for accommodation.

(3) However, for overseas travel covered by a *travel allowance you must still keep travel records if the travel involves you being away from your ordinary residence for 6 or more nights in a row: Subdivision 900-F tells you about travel records.

You can deduct a *meal allowance expense without getting written evidence if:

You can deduct a *travel allowance expense without keeping travel records if:

(1) For the "one-third of actual expenses" method or the "log book" method of deducting a *car expense, you need to substantiate the expense by getting written evidence. Subdivision 900-E tells you about the evidence you need.

Subdivision 28-E tells you about the "one-third of actual expenses" method and Subdivision 28-F tells you about the "log book" method.

(2) If you are using the "one-third of actual expenses" method and your expense is for fuel or oil, you have a choice of either:

Subdivision 28-H tells you about odometer records.

(3) If you are using the "log book" method and your expense is for fuel or oil, you do not need to get written evidence of it, because section 28-100 already requires you to keep odometer records for the period when you *held the *car in the income year.

(1) Once you have the material required by this Subdivision, you must retain it for 5 years. There is no need to lodge it with your *income tax return. The Commissioner may require you to produce it: see Subdivision 900-G. The period for which you must retain it is called the retention period.

(2) The 5 years start on the due day for lodging your *income tax return for the income year. If you lodge your return later, the 5 years start on the day you lodge it.

(3) However, the *retention period is extended if, when the 5 years end, you are involved in a dispute with the Commissioner that relates to the expense. See section 900-170.

(4) If you do not retain the material for the *retention period, you cannot deduct the expense. If you have already deducted it, your assessment may be amended to disallow the deduction.

(5) If you lose any of the material, there are rules that might help you in section 900-205.

(1) To deduct a *business travel expense:

Subdivision 900-E tells you about the evidence you need.

(2) If your expense is for fuel or oil, you have a choice of either:

Subdivision 28-H tells you about odometer records.

You need to keep travel records if your expense is for travel that involves you being away from your ordinary residence for 6 or more nights in a row. Subdivision 900-F tells you about travel records.

(1) Once you have the material required by section 900-80 or 900-85, you must retain it for 5 years. There is no need to lodge it with your *income tax return. The Commissioner may require you to produce it: see Subdivision 900-G. The period for which you must retain it is called the retention period.

(2) The 5 years start on the due day for lodging your *income tax return for the income year. If you lodge your return later, the 5 years start on the day you lodge it.

(3) However, the *retention period is extended if, when the 5 years end, you are involved in a dispute with the Commissioner that relates to the expense. See section 900-170.

(4) If you do not retain the material for the *retention period, you cannot deduct the expense. If you have already deducted it, your assessment may be amended to disallow the deduction.

(5) If you lose any of the material, there are rules that might help you in section 900-205.

General

(1) A business travel expense is a *travel expense, in so far as you incur it in producing your assessable income other than salary or wages.

(2) A loss or outgoing is a travel expense if you incur it for travel by you that involves you being away from your ordinary residence for at least one night. The travel may be within or outside Australia.

(3) In so far as you incur *travel expenses in producing your salary or wages, the expenses are not treated as *business travel expenses. Instead, they are dealt with as *work expenses in Subdivision 900-B.

(4) *Travel allowance expenses are not treated as *business travel expenses. They too are dealt with as *work expenses in Subdivision 900-B.

(5) A loss or outgoing to do with a *motor vehicle is not treated as a *business travel expense unless it is:

However, most *motor vehicle expenses are covered by the rules about *car expenses. See Division 28 and Subdivision 900-C.

This Subdivision tells you how you must get written evidence to support a claim for a deduction.

Each of the following sections has a set of rules for a particular way of getting written evidence to substantiate a deduction. Which ones you can use depends on the type of expense. You only need to use one set of rules to support an expense.

(1) There is no time limit for getting written evidence of an expense (unless you want to record the expense yourself under section 900-125 or 900-130). But until you get written evidence of it, you are not entitled to a deduction for the expense.

(2) If when you lodge your *income tax return for the income year you have good reason to expect to get written evidence of the expense within a reasonable time, you can deduct the expense without actually getting the evidence. But if you don’t get the evidence within a reasonable time, your entitlement to the deduction ceases. If you have already deducted the expense, your assessment may be amended to disallow the deduction.

(3) Even if you only get written evidence of the expense after the end of the income year, you deduct the expense for that income year, not the income year in which you get the evidence.

(1) You may use this set of rules for any type of expense except depreciation.

(2) You must get a document from the supplier of the goods or services the expense is for. The document must set out:

(3) There are 2 exceptions to these requirements:

(4) The document must be in English. However, if the expense was incurred in a country outside Australia, the document can instead be in a language of that country.

(1) You may use this set of rules only for a depreciation expense.

(2) You must get evidence of the original acquisition of the depreciating property. It must be a document that you get from the supplier of the property and that specifies:

(3) However, if the document the supplier gave you does not specify the nature of the property, you may write in the missing details yourself before you lodge your *income tax return for the income year in which you first claim a deduction for depreciation of the property.

(4) If you don’t get the document in time, for example because you only decided to use the property for income-producing purposes several years after you acquired it, there are rules that might help you in Subdivision 900-H (Relief from effects of failing to substantiate).

(5) The document must be in English. However, if you imported the property into Australia, the document can instead be in a language of the country from which the property was originally exported.

(1) If your expense is small, and you have a small total of small expenses, you can make a record of the expenses instead of getting a document from the supplier.

(2) Each expense must be $10 or less, and the total of all your expenses that:

must be $200 or less. These limits can be increased from time to time by regulations made under section 909-1.

(3) If the expense is not depreciation, you must get a document with the same information as required by section 900-115, except that you may create the document and record all the details yourself. You must do so as soon as possible after incurring the expense.

(4) If the expense is depreciation, you must, as soon as possible after the last day of the income year, record in a document the following:

(5) A record must be in English.

(1) If the Commissioner considers it unreasonable to expect you to have got written evidence of an expense in any other way permitted by this Subdivision, you can use the method in section 900-125 to get written evidence of your claim.

(2) The expense may be more than $10 and does not count towards the $200 limit in section 900-125.

(1) If the nature and amount of a *work expense are shown on your copy of a group certificate given to you by your employer, you can use the copy as written evidence of the expense.

(2) Expenses of the same nature need not be separately itemised; it is acceptable if they are totalled together on the certificate.

This Subdivision tells you how to keep travel records. A travel record is a record of activities you undertake during your travel.

The purpose of a travel record is to show which of your activities were undertaken in the course of producing your assessable income, so that your losses or outgoings, or portions of them, can be attributed to income-producing purposes.

(1) You record an activity by specifying in a diary or similar document:

(2) An activity must be recorded before it ends, or as soon as possible afterwards. Each entry must be in English.

(1) You need not record an income-producing activity. But if you don’t, the activity cannot be taken into account in working out the extent to which you can deduct an expense you incur for the travel.

(2) You don’t need to record any other kind of activity, although you may do so.

This Subdivision tells you how long you need to retain records of an expense and when you have to produce those records.

Whenever you are required to retain records of an expense under this Division or Division 28, you need to retain the records for 5 years.

The *retention period is automatically extended if one of the following types of dispute relating to the expense is unresolved when the 5 years end:

The extension lasts until the dispute is resolved.

(1) The Commissioner may give you a written notice telling you to produce records of expenses specified in the notice. The records must be ones that you have to retain for the *retention period: you do not have to produce records if the retention period for those records is over.

(2) The notice must give you 28 days or more to comply, starting on the day after the notice is given. The Commissioner may allow you more time to comply with the notice.

(1) To comply with the notice, you must produce to the Commissioner, for each of the expenses, the material that this Division or Division 28 requires you to retain during the *retention period.

(2) You must also produce a summary that, for each expense for which you produce written evidence (see Subdivision 900-E):

The summary must be in English in a form approved by the Commissioner.

(1) If you do not comply with a notice for a particular expense, you cannot deduct the expense. If you have already deducted it, your assessment may be amended to disallow the deduction.

(2) You do not commit an offence merely by not complying with the notice, despite section 8C of the Taxation Administration Act 1953.

Not doing something necessary to follow the rules in this Division does not affect your right to a deduction if the nature and quality of the evidence you have to substantiate your claim satisfies the Commissioner:

Not doing something necessary to follow the rules in this Division does not affect your right to deduct an amount if the only reason was that you had a reasonable expectation that you would not need to do it in order to be able to deduct that amount.

(1) If you have a complete copy of a document that is lost or destroyed during the *retention period, it is treated as the original from the time of the loss or destruction.

(2) If you don’t have such a copy, but the Commissioner is satisfied that you took reasonable precautions to prevent the loss or destruction, the rest of this section explains what to do.

(3) If the lost or destroyed document was a travel record, log book or other document that is not written evidence of an expense under Subdivision 900-E, you do not need to replace it; your deduction is not affected by your failing to retain or produce the document.

(4) If the lost or destroyed document was written evidence, you must try to get a substitute document that meets all the original requirements (except the time limit for getting the original).

(5) If you succeed, your deduction is not affected by your failing to retain or produce the original document. The substitute document is treated as the original from the time of the loss or destruction.

(6) If it is not reasonably possible to succeed, your deduction is not affected by your failing to retain or produce the original document.

(7) If it is reasonably possible for you to get a substitute document, but you don’t get one, this section does not protect you from the consequences of failing to retain or produce the original.

This Subdivision tells you when you can deduct an expense related to an award transport payment without getting written evidence or keeping travel records.

(1) If:

then you can deduct those transport expenses without getting written evidence or keeping travel records.

(2) For each *award transport payment, you can deduct no more than the amount you could have deducted if the *industrial instrument the payment is under were still in force as it was on 29 October 1986. If your claim exceeds this amount, you cannot use the exception for the expenses.

Award transport payment

(1) An award transport payment is a *transport payment covering particular travel that was paid under an *industrial instrument that was in force on 29 October 1986.

(2) A transport payment is an amount your employer pays you, or is to pay you, for travel by you in the course of working for the employer that is:

(3) A transport expense is a loss or outgoing to do with transport, including depreciation of property used in connection with transport, but not including a loss or outgoing for accommodation or for food or drink, or expenditure incidental to transport.

An *industrial instrument that comes into force in substitution for another industrial instrument is taken to be a continuation of the original instrument.

(1) Changes made to an *industrial instrument after 29 October 1986 are taken to have been made on 29 October 1986 if they were made in response to an application made on or before 29 October 1986 that sought increases in *transport payments.

(2) If the application was amended after 29 October 1986, the alterations made to the *industrial instrument count as being made on 29 October 1986 only if they did not result in increases in *transport payments that were greater than increases in those payments sought by the application as at 29 October 1986.

Changes made to an *industrial instrument after 29 October 1986 are taken to have been made on 29 October 1986 if the whole amount of the change is determined solely by reference to matters that were contained in the industrial instrument on 29 October 1986.

(1) If:

you may deduct the expense without getting written evidence or keeping travel records.

(2) However, if the Commissioner becomes satisfied that you will not receive the *award transport payment after all, then, despite section 170 of the Income Tax Assessment Act 1936, he or she may at any time disallow the deduction and amend your assessment accordingly.

A *transport expense that section 900-215 lets you deduct without getting written evidence or keeping travel records does not count towards the $300 limit in section 900-35.

(1) If the exception in this Subdivision lets you deduct, without getting written evidence or keeping travel records, losses or outgoings (exempt losses or outgoings) that are or include *car expenses, or parts of *car expenses, your use of the 4 methods for calculating deductions for car expenses for the *car is affected.

(2) However, if you do not want your use of the 4 methods to be affected, you may elect not to use the exception in this Subdivision for the *award transport payments you are paid in the income year. If you so elect, the rest of this section does not affect you.

(3) You can still use the "cents per kilometre" method (see Subdivision 28-C) of deducting *car expenses you incurred for the *car in the income year. However, the kilometres the car travelled during the income year in the course of travel covered by the *award transport payment or payments are not counted as *business kilometres.

(4) You cannot use the "12% of original value" method (see Subdivision 28-D) or the "one-third of actual expenses" method (see Subdivision 28-E) of deducting *car expenses you incurred for the *car in the income year.

(5) You can still use the "log book" method (see Subdivision 28-F) of deducting *car expenses you incurred for the *car in the income year. If you do: