Private ruling: Non-commercial losses
Date of advice: 3 April 2019
Published: May 2019
Ruling period: Year ended 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 01 July 2017

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your primary production business activity in the calculation of your taxable income for the 2017-18 to 2019-20 financial years? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted the discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You do not satisfy the <$250 000 income requirement set out in subsection 35-10(2E) of the Income Tax Assessment Act 1997 . In the 2016-17 financial year you commenced a new primary production business activity. You have provided projections for income and expenses that show that you expect this activity to produce a tax profit in the 2020-21 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 – Section 35-1 | Income Tax Assessment Act 1997 – Subsection 35-10(2E) | Income Tax Assessment Act 1997 – Subsection 35-55(1) | Income Tax Assessment Act 1997 – Paragraph 35-55(1)(c)