Private ruling: Non-commercial losses - Commissioner's discretion - lead time
Date of advice: 9 June 2021
Published: August 2021
Ruling period: Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your primary production activity in the calculation of your taxable income for the 20XX-XX financial year? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au

Relevant facts and circumstances: You will not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997 in the 20XX-XX financial year. You are commencing a primary production business activity by purchasing stock in the 20XX-XX financial year. You have provided your business plan that provides that due to the lead time stock will not be sold and the activity will make a tax loss in the 20XX-XX financial year. Your activities business plan outlines that you expect to make a tax profit in the 20XX-XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 section 35-50 | Income Tax Assessment Act 1997 paragraph 35-55(1)(c)


This ruling applies for the following period: