Private ruling: Commissioner's discretion for non-commercial losses
Date of advice: 3 November 2020
Published: January 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow you to include any losses from your business in the calculation of your taxable income for the 20XX-XX financial year? | A1: Yes

Relevant facts and circumstances: Your income for non-commercial business loss income test purpose was under $250,000 for 20XX-XX financial year (this financial year). You carry on a business which commenced in 20XX. Your business activity involves providing a specific service to other businesses within the primary production industry. You made over $20,000 in assessable income in the 20XX-XX and 20XX-XX financial years. You submit that your business activities were affected by special circumstances in this financial year, which were conditions affecting primary production businesses in the area that you carry out your business activities. Your tax agent advised that the conditions first commenced in 20XX and extended into this financial year. The conditions affected the primary production businesses, you therefore had no opportunity to undertake your business activity. Due to this, you earned nil assessable business income during this financial year. With the conditions improving, you expect to make over $20,000 in assessable income in the following 20XX-XX financial year. The state government's website information provides that the area where you carry out your business operations (providing service to primary production businesses) were affected by the conditions during this 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)(a)