# ATO rules for expenses



## Naveen2015 (Mar 24, 2015)

Hi guys I have a situation where I might have to spend some money from my australian bank account to pay some freelancers/contractors who are going to help my friend in Germany with his business as a sole trader. Does this have to be reported to ATO? As far as I know only income that I have earned should be declared and not my expenses? Please advise. Thanks


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## Moulard (Feb 3, 2017)

I assume you are referring to the the Australian Taxation Office.

As an individual you may only deduct expenses related to your employment that are not reimbursed by your employer. There are limited exceptions for gifts and donations to registered charities and a few other categories, none of which are relevant to the circumstances you describe.

If you were in the business of financing businesses you would be able to deduct a bad debt if your friend did not repay it, but that is it.

As such there is no legal way for you to deduction for either a gift or loan to your friend's German business.

Indeed if you end up giving them a loan and they pay interest on that loan, the interest would be taxable income for you that you would have to report on your return.


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