Private ruling: Special professional above average income
Date of advice: 25 July 2023
Published: 11 September 2023
Ruling period: Year ended 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Can you apply the above-average special professional income rules under Division 405 of the Income Tax Assessment Act 1997 to the assessable income you derive as a sole trader? | A1: Yes. Having considered your circumstances, the Commissioner is satisfied that you are a special professional for the purposes of the above-average special professional income rules under Division 405 of the Income Tax Assessment Act 1997 (ITAA 1997). Subsection 405-30(1) of the ITAA 1997 does not apply in your circumstances, as it applies to special professionals that are authors or inventors only. Further information about the income averaging rules for special professionals can be found by searching ato.gov.au for 'QC 67998'.

Relevant facts and circumstances: You are an Australian tax resident. You are a film and video director. This activity is artistic in nature and involves you using artistic skill. You work on a freelance basis for several different businesses and operate as a sole trader. As a sole trader, you invoiced multiple businesses during the income year ended 30 June 2022. You are not employed in any of the businesses. You work mainly for a couple of businesses. These businesses do not restrict you from working for anyone else. You do not have ongoing obligations or contractual arrangements with these businesses. Your work is performed on a project-by-project basis. You agree verbally on a project fee or day rate with clients and then invoice the clients at the end of your work. Further work is not guaranteed and could cease at any time.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 405-15 | Income Tax Assessment Act 1997 subsection 405-25(1) | Income Tax Assessment Act 1997 subsection 405-25(4) | Income Tax Assessment Act 1997 subsection 405-25(5) | Income Tax Assessment Act 1997 subsection 405-30(1)