Private ruling: Non-commercial losses
Date of advice: 17 October 2017
Published: March 2018
Ruling period: Year ended 30 June 20CC | Year ending 30 June 20DD | Year ending 30 June 20EE
Date scheme commenced: 1 July 20BB

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 20BB-CC to 20DD-EE financial years? | A1: Yes Having regard to your full circumstances, it is accepted that it is in 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. Therefore, the Commissioner will exercise the discretion in the 20BB-CC to 20DD-EE financial years.

Relevant facts and circumstances: You are carrying on a business which commenced in January 20AA. Your income for non-commercial loss purposes for the financial years 20BB-CC to 20DD-EE is more than $250,000. You have provided independent evidence that attests to a commercially viable period of two to four years for your industry. You state the business will make a profit in the 20EE-FF 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)