Private ruling: Commissioner's discretion - lead time
Date of advice: 4 November 2021
Published: January 2022
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX financial years? | A1: Yes. Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently, the Commissioner will exercise his discretion in the XXXX to XXXX financial years.

Relevant facts and circumstances: You do not satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. You carry on a primary production enterprise. You commenced operations during the XXXX financial year. Due to the large start-up capital required to purchase livestock for your business it was not commercially viable for you to make a profit in the XXXX financial year, and you suffered a loss. You have provided independent evidence that attests to a commercially viable period of 2 years for your industry. You intend to make a tax profit in the XXXX financial year.

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)(c)