Your status as a non-resident of Australia for tax purposes is closely related to:
- The purpose of your visit, for example, you came on working holiday or a short period of study
- The length of your stay, for example, you spend less than six months in Australia
- Your behavior during your stay, for example, you travel from place to place
- The absence of family or business ties in Australia
- The lack of Australian assets, such as a home
- You are visiting, traveling and working in various locations
- Leave Australia permanently
Your status is unlikely to change unless you apply for an extension of your 12-month working holiday visa or for permanent Australian residency with the Department of Immigration and Citizenship.
You may, however, change your status to a resident for tax purposes by demonstrating that you lived and worked in the same place for longer than six months during the tax year.
Determine your status using the ATO decision tool.
Sole Proprietor or Owner
If you are the sole proprietor or owner of a business, you can claim certain deductions that employees cannot. Refer to the list below to see what general deductions you can claim on your tax return.
Advertising and Sponsorship
- Costs to publicly advertise your company’s service/goods
- Sponsorships to sell trading stock
- Costs to advertise job openings and hire employees
- Ensure that the costs do not fall under the definition of ‘entertainment’ (see fringe benefits)
- Unpaid debts are considered ‘bad debt’ are deductible as long as they were included in assessable income in the present or a previous income year
- Must be written off as uncollectible (bad debt) in the same year the deduction was claimed
- Costs that accumulate in order to get borrowed funds are deductible
- Must be used to produce assessable income
- Legal costs, registration fees, valuation costs, fees to guarantee an overdraft, and commissions paid are deductible but may need to be extended over time depending on the time extension of the loan given
- Interest on loans is deductible if used to produce income
- Keep ALL receipts, itineraries, airline ticket, bus tickets, etc.
- Record the nature, purpose, location, dates, and duration of the trip
- Personal activities occurring during the trip are NOT deductible
Car Expense Deductions
This is based on the set rate for each business.
- Travel between home and work is required to carry bulky equipment
- Travel between home and work if the home is a base of operations and work is commenced at home
- Travel between home and shifting places of work
- Travel between two separate workplaces if there are two separate employers involved
- Travel from normal place of business to alternate place of business while still on duty and back to the normal place of business or directly home
- Travel from home to an alternate place of business for work-related purposes and then to the normal place of business or directly home
- Travel between two places of employment or between a place of employment and a place of business
Cents per Kilometre Method
- Maximum of 5,000 km/year
- The claimable amount in dollars = 66 cents per kilometer per car
- The rate is no longer based on the car’s engine capacity or cylinder volume from 1 July 2015.
12% Original Value Method
- Traveling over 5,000 km/year
- If you bought the car then 12% of the cost or 12% of its market value
One-Third Actual Expenses Method
- The claim allows one-third of car expenses per year, including private costs
- Do NOT take into account the purchase price or capital costs (ie: improvements)
- Need to have traveled over 5,000 km/year
- Need to keep records for odometer records, engine capacity, make, model and registration number.
- Requires you to keep a logbook for a continuous period of at least 12 weeks to obtain the percentage of kilometers traveled for business
- Record the percentage of business use in total km
Owned or Leased Vehicles
- Cents per kilometer method (with some changes)
- Logbook method (with no change to its rules)
- According to the ATO, owning or leasing means that you make financial payments for the initial purchase, lease, hire-purchase agreements, and loan or lease payments.
You can deduct travel expenses you incur while away from home overnight for work, including meals, accommodation, and incidental expenses.
In most cases, unless your work-related travel involves an overnight stay, you cannot claim meal expenses, even if your employer provides you with a travel allowance.
You can also claim work-related travel expenses for
- Motorcycles and vehicles with a carrying capacity of one ton or more, or nine or more passengers
- Air, bus, train, tram, and taxi fares
- Car-hire fees
- Costs you actually incur with a borrowed car
Be aware that you can only deduct the expenses from the work-related portion of your trip. If all expenses were private, you cannot claim those expenses. The work-related expenses must be separated from the private expenses.
You cannot claim the cost of normal trips between home and work, even if
- You did minor tasks on the way, such as picking up mail
- You had to travel between work and home more than twice a day
- You were on call
- There was no public transport near your work
- You worked outside of normal business hours, such as overtime
- Your home was a place of business and you traveled directly to a place of employment
The ATO considers all of this travel private and it is thus not deductible.