Private ruling: assessable income
Published: January 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are amounts received by you for delivering pizzas included in your assessable income? | A1: Yes

Relevant facts and circumstances: You deliver pizza for a pizza shop, driving your own motor vehicle and receive payment for this activity. You consider the activity to be a hobby.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: Under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997), your assessable income includes income according to ordinary concepts. Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business. It is the view of the Commissioner that all rewards for personal services, whether received in the capacity of employee or otherwise in connection with employment or personal services, are income according to ordinary concepts. Paragraph 3 of Taxation Ruling IT 2639 defines income from personal services and states that: Income from personal services is income that an individual taxpayer earns predominantly as a direct reward for his or her personal efforts by, for example, the provision of services, exercise of skills or the application of labour. The inclusion of predominantly in this definition allows for the situation where personal services involve the use of some equipment, for example the drawing board of an architect. In your case, the payments you receive for delivering pizzas are earned as they are a direct reward for your personal efforts and the services you perform. Accordingly the income received is considered ordinary income and is assessable under section 6-5 of the ITAA 1997.

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