Private ruling: Above-averaging special professional income - Modelling
Date of advice: 21 September 2016
Published: November 2016
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does a fashion model qualify as a performing artist in accordance with the provisions of Section 405-25(2) of the Income Tax Assessment act 1997 ? | A1: Yes

Relevant facts and circumstances: You came to Australia in to complete a Degree. You advised that you work as an actor and as a model. You are a contractor when you are engaged as a model. Your modelling employment is through agencies on short term contracts. You exceeded the $2500 derived income from modelling and acting in the 20XX Financial Year. You are deemed to be an Australian resident for tax purposes for the 20XX Financial Year.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Division 405 | Income Tax Assessment Act 1997 - Section 405-20 | Income Tax Assessment Act 1997 - Section 405-25 | Income Tax Assessment Act 1997 - Subsection 405-25(1) | Income Tax Assessment Act 1997 - Subsection 405-25(2) | Income Tax Assessment Act 1997 - Subsection 405-25(3) | Income Tax Assessment Act 1997 - Section 405-30 | Taxation Administration Regulations 1976 - Regulation 44(2)

Reasons for decision: Summary: Division 405 of the ITAA 1997 applies special rates of tax on the above-average professional income of special professionals. It reduces the effect that fluctuations in special professional income would otherwise have on the income tax liability of these persons. Under this division you are only subject to concessional tax treatment if: • you are an individual • you are an Australian resident at any time during the income year • your are a special professional, and • your taxable professional income is more than $2,500 in the current or earlier income year. Subsection 405-25(1) of the ITAA 1997 states that you are a special professional if you are a performing artist. Subsection 405-25(2) of the ITAA 1997 states that you are a performing artist if you exercise intellectual, artistic, musical, physical or other personal skills in the presence of an audience by performing or presenting: (a) music; or (b) a play; or (c) dance; or (d) an entertainment; or (e) an address; or (f) a display; or (g) a promotional activity; or (h) an exhibition; or (i) any similar activity. Further, subsection 405-25(3) of the ITAA 1997 states that you are also a performing artist if you perform or appear in or on a film, tape, disc or television or radio broadcast. Taxation Administration Regulations 1976 Regulation 44(2) determines performing artist includes a singer, dancer, actor, model or a similar individual who is engaged to use her intellectual, artistic, musical, physical or other personal skill. | Detailed Reasoning - Application to your circumstances: You have two special professional activities being acting and modelling. Your combined assessable income from both special professional activities was greater than $2,500 in taxable professional income during the relevant financial year, and you were an Australian resident for tax purposes in the preceding financial year, this year is considered your first year for special professional averaging. Therefore the concessional tax treatment can be applied to the special professional income you earn