Private ruling: Commissioner's discretion - non-commercial losses
Date of advice: 31 May 2021
Published: August 2021
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: DDMMYY

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35 - 55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your retail business activity in your calculation of taxable income for the income year ended 30 June 20XX? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted that your business activity was affected by special circumstances, namely COVID restrictions outside your control which prevented you passing the assessable income test. You had decreased income due to a downturn in sales and were unable to meet the $20,000 assessable income threshold despite exceeding it in the previous 4 years. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You conduct a retail business as a sole trader. You earn under $250,000 for non-commercial loss purposes. Due to the COVID virus and subsequent restrictions, you experienced a downturn in sales. You were unable to reach the $20,000 turnover for the Assessable Income Test to be met. Your turnover for the preceding four years was well over $20,000.

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)(a)


This ruling applies for the following period periods :