Private ruling: Non-commercial losses
Date of advice: 1 August 2018
Published: September 2018
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 39 June 2021
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in your calculation of taxable income for the 2018-19, 2019-20 and 2020-21 financial years? | A1: Yes Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion in the 2018-19, 2019-20 and 2020-21 financial years For more information on non-commercial losses, please visit our website at ato.gov.au and search for quick code QC 33774.

Relevant facts and circumstances: Your income for non-commercial loss purposes for the financial years 2018-19, 2019-20 and 2020-21 is more than $250,000. You are carrying on a business (the activity) which will commence in the 2018-19 financial year. You state you will purchase products in the 2018-19 financial year. You have provided independent evidence that attests to a commercially viable period of three years for your industry. Your profit and loss statements show you will make a profit in the 2021-22 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(1) | Income Tax Assessment Act 1997 subsection 35-10(2) | Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 paragraph 35-55(1)(c)