Private ruling: Commissioners discretion for non-commercial losses - lead time
Date of advice: 3 September 2021
Published: November 2021
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

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

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 business which provides utilities services and installations to households and small businesses. You commenced business operations in the 20XX-XX financial year. Due to the amount of start-up capital required to purchase equipment for your business it was not commercially viable for you to make a profit in the 20XX-XX financial year and you suffered losses. You intend to meet the assessable income test in the 20XX-XX 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)


This ruling applies for the following period: