Are Visa 186 Costs Tax Deductible in Australia?
The cost of a Visa 186 application can run to tens of thousands of Australian dollars. A question many people ask is whether any of it is tax deductible. The answer depends on who pays and the purpose.
The principle behind deducting migration costs
The Australian Taxation Office (ATO) allows deductions for costs related to assessable income. Migration costs may be deductible if:
- The cost is directly related to maintaining or improving income from your current work in Australia
- You are working in Australia when the cost is incurred
Migration agent fees — who can deduct them
Employee paying the agent fee themselves: If you are working in Australia and pay a migration agent fee yourself to maintain your visa status (for example, to keep working), that fee may be deductible as a work-related expense.
Condition: you must be earning income in Australia when the cost is incurred. The cost of a first visa application made from overseas to enter Australia (offshore) is generally not deductible.
Employer paying the agent fee: A migration agent fee paid by the employer for an employee is a business expense of the employer — the employer claims it as part of business tax, not the employee.
Is the visa application fee deductible?
The DHA application fee (currently $4,640 AUD for the main Visa 186 applicant) is money paid to the government. According to the ATO, this is generally not deductible as a work-related expense, because it is a government charge rather than a cost of a service.
However, if an employer pays the visa fee as a benefit for an employee, the employer may treat it differently in relation to Fringe Benefits Tax (FBT).
A common situation with the Visa 186 TRT
For someone on a Visa 482 applying to move to a Visa 186:
- A migration agent fee to maintain lawful working status: generally deductible
- The DHA visa application fee: generally not deductible
- Health examination fees: generally not deductible (a personal cost)
Recommendation
Personal tax situations vary a great deal. Before lodging a tax return:
- Consult a registered tax agent (not only a migration agent) about what may be deductible
- Keep all receipts related to your migration
- Do not claim a deduction you are unsure about — the ATO can audit and require repayment plus interest
This is an area where migration law and tax law overlap, so you need a professional with knowledge of both.