Private ruling: Above average special professional averaging
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you considered a special professional for the purposes of the concessional tax treatment under Division 405 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: Are you excluded from the concessional tax treatment because you are an employee producer? | A2: No.

Relevant facts and circumstances: You are an Australian resident for tax purposes. You state that you are employed under salary as a Senior Production Manager for a television company in Australia. However your duty statement provided lists your occupation as a writer/producer. Your duties as a writer/producer involve, amongst others, utilising your artistic skills in producing, writing, directing, shooting and post-producing content for television. During the 2013 financial year the taxable income from your producer job was more than $2,500. You were an Australian resident for income tax purposes in the 2012-13 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 - Division 405 | Income Tax Assessment Act 1997 - Paragraph 405-25(4) | Income Tax Assessment Act 1997 - Section 405-30

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. Subsection 405-25(4) of the ITAA 1997 states that you are a special professional where you are a production associate proving artistic support for the activity of making a television broadcast. As you are a producer utilising your artistic skills in the making of a television broadcast, you are considered a special professional for the purposes of the concessional tax treatment under Division 405 of the ITAA 1997. Exclusion Section 405-30 of the ITAA 1997 provides details of the exclusions from what can be counted as amounts of assessable special professional income. This section effectively excludes from the special professional averaging provisions, assessable income derived by employed persons who use their technical skills in the provision of services as an author or inventor only. Therefore the exclusion does not apply to your circumstances.