Archive for the ‘Taxation’ Category

Collaboration – with the support of the tax system

October 18, 2011

In our experience, the best outcomes in regional and business development result from people clicking with other people. They find others with the same passion and view of the world – agendas develop from there.

 When these relationships develop across international borders, the results can be particularly rewarding. Accordingly, over the last decade, the Cockatoo Network has put lots of economic development professionals in face-to-face contact with their international counterparts.

However local councils and development agencies rarely fund their ED professionals to undertake such networking because of likely criticism about taxpayer-funded junkets. Similarly, a lot of federal and state programs specifically exclude expenditure on international foreign travel.

 Well we recently sought the advice of a nice lady at the Australian Tax Office. After describing the work we do in identifying leading edge industry innovation, we explained that we’d uncovered the Copenhagen Cleantech Cluster (see below) and that we’re looking for the ATO to allow our members to claim collaboration with that cluster as a personal income tax deduction.

 There was silence. So we further explained that most people find it difficult to separate work from leisure, and it’s no different while on holiday. In this case, a Cockatoo member might, while his/her spouse is shopping inCopenhagen) be comparing notes with local cleantech experts and inspecting wind turbines. Or a few days later our member might be in Saint-Paul (near Nice) getting a guided tour by a local council staffer of the artists’ colony, asking lots of questions, writing a report for the Creative Arts Committee back home. Our intrepid member might spend 30% of his/her trip on work-related activities and should thus be eligible to claim 30% of travel and accommodation expenses as a tax deduction.

To our delight, the Tax Department lady agreed subject to evidence that the work had been planned and the proper recording of the work undertaken.

 We would surmise that the tax systems in other countries are similarly geared to allowing such deductions. If they are, this might be a great way to trigger more cross-border collaboration!