Private ruling: Am I in business?
Date of advice: 14 August 2025
Published: 20 October 2025
Ruling period: Year ended DD MM 20XX
Date scheme commenced: DD MM 20XX

Ruling: Q1: Are the products you receive from participating in a review program considered assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: If you are carrying on a business, will the non-commercial loss rules under Division 35 of ITAA 1997 apply? | A2: No.

Relevant facts and circumstances: Background You are an individual and an Australian resident. You did not have paid employment in the relevant income year. During the relevant income year, you were invited to participate in a reviewing program. Prior to joining the program, you had a habit for testing products and writing reviews. Review program You participate in a review program. You do not receive payment to participate. You have provided a copy of the participation agreement which outlines the terms and conditions of the program and your responsibilities. Review activity On average you review XX products or more each week. You have provided an itemised report for the relevant income year which details the products that you reviewed and their values. The values reflect the recommended retail prices (RRP) of the items. During the relevant period, you reviewed over X items for an estimated total RRP value of over $X AUD. The time you spend on the activity varies significantly depending on how many items you receive, as delivery is not always consistent. Some days you receive nothing and do not write any reviews. Other days, you might review up to XX products. Each review takes you at least one hour to complete, including unboxing, photography, testing, and writing. Some items also require videos or post-review updates. You do not have a business plan. You have no financial strategy or intention to commercialise your reviews. You have no social media accounts related to reviewing products. Your only ongoing expenses related to the activity are your internet and mobile data plans. You do not have a warehouse, shopfront, resale channels, or business registration in connection with your product review activity. You store all items at your personal residence. You strictly follow all review requirements set out by the program participation agreement.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 subsection 8-1(1) | Income Tax Assessment Act 1997 Division 35 | Income Tax Assessment Act 1997 subsection 35-5(2) | Income Tax Assessment Act 1997 paragraph 35-10(1)(a) | Income Tax Assessment Act 1997 subsection 35-10(4) | Income Tax Assessment Act 1997 subsection 35-55(1) Question 1

Reasons for decision: Detailed Reasoning - Assessable income: Your assessable income includes the ordinary income derived directly or indirectly from all sources under section 6-5 of the ITAA 1997. Ordinary income is referred to as income 'according to ordinary concepts'. This phrase is not defined under the legislation, but a large body of case law has developed to identify the factors that indicate if an amount is income according to ordinary concepts. Typical examples of ordinary income include salary and wages, as well as proceeds of carrying on a business, rent, interest, and dividends. In Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215, Jordan CJ held that the meaning of 'income' was to be determined according to 'ordinary concept and usages'. Ordinary income will generally have the characteristics of being periodic, recurring, and regular. These characteristics of income have been emphasised by decisions in Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540 and Just v Federal Commissioner of Taxation (1949) 8 ATD 419. Payments which are received for labour or services will also constitute ordinary income ( Reuter v Federal Commissioner of Taxation (1993) 111 ALR 716). The typical usage of the word 'income' in ordinary speech is to describe that which comes in as a reward for services. Amounts including salary and wages, commission, and tips are universally regarded as income and it is immaterial whether they are paid under or pursuant to a contract of service, or gratuitously. For income tax purposes, it would be immaterial whether an amount which is a reward for services is paid to the taxpayer in advance of the services being performed or after the services have been performed, or whether the payment is made by the person for whom the services are performed or by some other person. Generally, it will also be immaterial whether the amount paid is paid periodically or in a lump sum. What will matter is the character of the payment as a reward for services or, as it was put by Fullagar J in Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47 at 57-58, whether the receipt is a 'product' of the taxpayer's services. Ordinary income therefore generally bears a direct relationship to some form of input or investment made by the taxpayer. | Detailed Reasoning - Carrying on a business: 'Business' is defined under section 995-1(1) of the ITAA 1997. It includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee. The Commissioner considers various indicators to determine whether a business is being carried as contained in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? (TR 97/11). Although this ruling discusses primary production businesses, the indicators can be applied broadly to all businesses. Paragraph 13 of TR 97/11 lists the 8 business indicators as follows: • whether the activity has a significant commercial purpose or character, • whether the taxpayer has more than just an intention to engage in business, • whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity, • whether there is repetition and regularity of the activity, • whether the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business, • whether the activity is planned, organised and carried on in a businesslike manner such that it is directed at making a profit, • the size, scale and permanency of the activity, and • whether the activity is better described as a hobby, a form of recreation or a sporting activity. No single indicator will be decisive in determining whether a business is carried on. The indicators must be considered in combination and as a whole. Where there is no overall profit motive and the activity looks like it will never produce a profit, it is unlikely that the activity will be considered to be a business. | Detailed Reasoning - Application to your circumstance: You are a participant of a product review program. Products are sent to you for no cost in exchange for you uploading product reviews online to the platform. You are not an employee. Your assessable income includes income according to ordinary concepts. This includes income derived from carrying on a business. The Commissioner is satisfied that your activity is not a business activity. The activity does not demonstrate the business indicators. Although the income received from this activity does not constitute business income, it is assessable under section 6-5 of the ITAA 1997. This is because the Commissioner considers the products to fit the meaning of 'ordinary income'. You receive the items in exchange for providing reviews, so there is a relationship between the non-cash income and your input or services. If you receive goods as full or part payment for services you provide, their market value is included as income in your tax return. You do not have to include the value of items you return. Any losses or outgoings incurred in the gaining or producing assessable income may be deductible under subsection 8-1(1) of the ITAA 1997. You should note that if your level of activity changes in the future, that the status of your activity may change to one of a business. You should continually reassess this status on an annual basis by considering if your level of activity has changed, and whether the status of your activity has changed to one of a business. | Detailed Reasoning - Reasons for decision: The non-commercial loss provisions are contained under Division 35 of the ITAA 1997. The provisions prevent losses from a non-commercial business activity carried out by an individual taxpayer from being offset against other assessable income in the year in which the loss is incurred, unless: • the individual meets the income requirement and the business activity satisfies one of the 4 stipulated tests (paragraph 35-10(1)(a) of the ITAA 1997); • an exception in subsection 35-10(4) of the ITAA 1997 applies; or • the Commissioner exercises the discretion in subsection 35-55(1) of the ITAA 1997 for the business activity for one or more income years. The 4 tests referred to in paragraph 35-10(1)(a) of the ITAA 1997 are: • the assessable income test, • the profits test, • the real property test, and • the other assets test. The conditions for meeting the assessable income test are set out in paragraph 35-30(a) of the ITAA 1997. To meet the assessable income test, the income from an activity must be at least $20,000 in the year that the test is to be applied. Subsection 35-5(2) of the ITAA 1997 specifies that Division 35 is not intended to apply to activities that do not amount to carrying on a business. | Detailed Reasoning - Application to your circumstance: For the provisions of Division 35 of the ITAA 1997 to apply, you must be carrying on a business. As the Commissioner has determined that you are not in business under Question 1 of this ruling, the non- commercial loss provisions do not apply.