Private ruling: Am I in business
Date of advice: 12 February 2026
Published: 30 March 2026
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the value of the products you receive from participating in a review program included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: Are you carrying on a business of reviewing products? | A2: No.

Relevant facts and circumstances: Background You are an individual Australian resident. You have full time paid employment. You were invited to participate in a reviewing program. The Program The Program offers participants access to selected products at no cost to generate independent customer reviews. Members are not paid to participate in the Program. Program Participation Agreement You have provided a copy of the Participation Agreement which outlines the terms and conditions of the Program and your responsibilities. Your Activity You are to open and use each product for a 6-month period, then provide unbiased customer feedback to product suppliers to help generate product buzz online. You accepted the invitation as something you can do in your spare time. You do not have a business plan. You spend as little as 15 minutes to over an hour creating a review depending on your available time. You don't engage on any social media platforms regarding your participation in the Program. You only store items at your personal address. You adhere to all rules, regulations and review requirements set out in the Program participation agreement. You have never sold any items which have come to you from the Program. You have provided an itemised report for the which details the products that you have ordered and their values. The values reflect the recommended retail prices (RRP) of the items.

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

Reasons for decision: Detailed Reasoning - Detailed reasoning: Assessable income Your assessable income includes the ordinary income derived directly or indirectly from all sources under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997). Ordinary income is income 'according to ordinary concepts'. Ordinary income generally has the characteristics of being periodic, recurring and regular. These characteristics of income have been emphasised by decisions in Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540 and Just v Federal Commissioner of Taxation (1949)8 ATD 419. Payments received for labour or services will also constitute ordinary income ( Reuter v Fed eral Commissioner of Taxation (1993) 111 ALR 716). Although ordinary income is not defined in legislation, it has generally been held to fall into three categories: income from rendering personal services, income from property and income from carrying on a business. In ordinary speech, income is what comes in as a reward for services. Amounts including salary and wages, commission, and tips are universally regarded as income, whether paid under a contract of service or gratuitously. For income tax purposes, it is immaterial whether an amount that is a reward for service is paid before or after the services are performed, or by the person for whom the services are performed or by someone else. It is generally also irrelevant whether the payment is made periodically or as a lump sum. What matters is the character of receipt as a reward for services. As Fullagar J stated in Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47 at 57-58, the question is whether the receipt is a 'product' of the taxpayer's services. | Detailed Reasoning - Application to your circumstances: The income you receive from this activity is assessable under section 6-5 of the ITAA 1997. The Commissioner considers the products you receive to be ordinary income because you receive non-cash consideration in exchange for providing reviews. This reflects that there is a clear relationship between the items you receive and the services you provide. If you receive goods as full or part payment for services you provide, their market value is included as income in your assessable income. However, you do not have to include the value of items you return. | Detailed Reasoning - Detailed reasoning: The term 'carrying on a business' is not defined in the ITAA 1997 and therefore takes its ordinary meaning. Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production (TR 97/11) outlines indicators relevant in determining whether an activity constitutes a business for income tax purposes. While TR 97/11 addresses primary production, these indicators are equally relevant to non-primary production activities, including property leasing. The factors outlined in TR 97/11 include: • whether the activity has a significant commercial purpose or character; • whether the taxpayer has more than just an intention to engage in business; • whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity; • whether there is repetition and regularity of the activity; • whether the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business; • whether the activity is planned, organised, and carried on in a businesslike manner such that it is directed at making a profit; • the size, scale and permanency of the activity; and • whether the activity is better described as a hobby, a form of recreation or a sporting activity. Factors of carrying on a business There are no absolute tests of what a 'business' is, in the ordinary sense of the word. In Evans v Federal Commissioner of Taxation, Hill J stated: The question of whether a particular activity constitutes a business is often a difficult one involving as it does questions of fact and degree. Although both parties referred me to comments made in decided cases, each of the cases depends upon its own facts and in the ultimate is unhelpful in the resolution of some other and different fact situation. There is no one factor that is decisive of whether a particular activity constitutes a business. As Jessel M.R . said in the famous dictum in Ericksen v. Last (1881) 8 Q.B. 414 at p. 416: There is not, I think, any principle of law which lays down what carrying on trade is. There are a multitude of things which together make up the carrying on of trade. Profit motive (but see cf. I.R. Commrs v. Incorporated Council of Law Reporting (1888) 22 Q.B. 279), scale of activity, whether ordinary commercial principles are applied characteristic of the line of business in which the venture is carried on ( I.R. Commrs v. Livingston (1927) 11 T.C. 538), repetition and a permanent character, continuity ( Hope v. Bathurst City Council 80 ATC 4386 at p. 4390; (1980) 144 C.L.R. 1 at p. 9; Ferguson v. F.C. of T. 79 ATC 4261 at p. 4264), and system ( Newton v. Pyke (1908) 25 T.L.R. 127) are all indicia to be considered as a whole, although the absence of any one will not necessarily result in the conclusion that no business is carried on. In determining whether a taxpayer is carrying on a business, the indicators must be considered in combination and as a whole. Whether a business is being carried on depends on the large or general impressions gained from looking at all the indicators and whether these indicators provide the operations with a commercial flavour. Whether the Activity Is More Than a Hobby or Recreation Activities commonly undertaken as hobbies tend to lack an intention to profit, are motivated by personal interest, and are not conducted in a businesslike manner. While your activity exceeds a mere hobby-because you receive assessable noncash consideration-it does not exhibit the factors typically associated with a business activity. The Commissioner notes that an activity can generate income without amounting to a business under TR 97/11. Often it will be the case that there is a hobby when: • It is evident that the taxpayer does not intend to make a profit from the activity • Losses are incurred because the activity is motivated by personal pleasure and not to make a profit and there is no plan in place to show how a profit can be made • The transaction is isolated and there is no repetition or regularity of sales • Any activity is not carried on in the same manner as a normal, ordinary business activity • There is no system to allow a profit to be produced in the conduct of the activity • The activity is carried on in a small scale • The activity is not carried out in the same manner as other similar businesses, and you have no intention to be carrying on a business. Activities that are commonly undertaken as a hobby or recreation can become a business activity, but you must be able to distinguish yourself from enthusiastic amateurs. It is also worth noting that just because something would not be correctly described as a hobby or a business activity it may still be characterised as income. Application to your circumstances Having regard to your facts and circumstances, the Commissioner is satisfied that your activity does not amount to the carrying on of a business. While the activity is more than a hobby, it does not demonstrate the business indicators set out in TR 97/11 and does not have a commercial character. Accordingly, the value of the products you receive remains ordinary income under section 6-5 of the ITAA 1997, as it represents a reward for the services you provide.