Claiming NZ income tax deductions for travel expenses

You’ll generally be entitled to claim a NZ tax deduction for all work-related travel, which may well include:

  • Business travel between business premises; 
  • Business travel overseas
  • Business travel to acquire assets and equipment

Note:  The Inland Revenue Department may request that you support your claim for business travel expenses with appropriate records.

One of the best ways to ensure that you can demonstrate that your travel is business related is to record the nature of your trip.  Keep a log of expenses and receipts. 

This is a good habit because IRD investigations/audits tend to occur sometime (often a few years) after a NZ tax year ends and you’re unlikely to remember the details of your trip then. 

Your overseas travel expenses are tax deductible if you “incur them in the course of your business”.  You will need to separate any element of your trip that relates to a holiday, as this is a “personal expense” and is not tax deductible.

So my tips to legally maximise your travel expenses are to:

1.  Establish correspondence with your business associates or “letters of introduction” well before your trip;

2.  Retain a full diary and/or an itinerary and keep it up to date;

3.  Keep as much contact information as possible from your overseas contacts, such as business cards, brochures and even photos.

Your business agenda/itinerary should, ideally, provide enough supporting information so you can easily calculate all expenses, and make a fair and reasonable apportionment between personal & business expenses.

But remember, that if you are GST registered, you must treat the GST correctly.  Typically, overseas travel is zero rated, unlike domestic travel.

NZ tax rules can be relatively complex, so we recommend that you seek advice that’s specific to your individual circumstances.

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