Private ruling: Non-commercial losses
Date of advice: 22 August 2017
Published: January 2018
Ruling period: Year ended 30 June 2017 to year ending 30 June 2036 | Activity commenced: | 1 July 2006 | Relevant facts and circumstances | This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. | You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997. | You operate an activity. You intend to produce high quality goods for sale. In April and June 2007 you have planted trees of various species. | Your cash flow assumptions have not changed from previous discretion applications. The cash flow for the years ended 30 June 2006 to 30 June 2015 are based on actual figures. | Your activity is not able to satisfy one of the tests or produce a taxation profit, and is unlikely to do so until the year ending 30 June 2036.

Ruling: 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. Consequently the Commissioner will exercise his discretion in the 2016-17 to 2035-36 financial years. For more information on non-commercial losses, please visit our website at ato.gov.au and search for quick code QC 33774.


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)(b)


Will the Commissioner exercise the discretion in paragraph 35-55(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in your calculation of taxable income for the 2016-17 to 2035-36 financial years?