Private ruling: Personal services income
Date of advice: 3 September 2020
Published: October 2020
Ruling period: Income year ended 30 June 2020 | Income year ending 30 June 2021
Date scheme commenced: 1 July 2019

Ruling: Q1: Is the income received from advertisements on social media platforms personal services income under section 84-5 of the Income Tax Assessment Act 1997 ? | A1: No. The income received is not mainly a reward for the personal efforts or skills of an individual (in creating the video) but from the advertisements placed into the video content as part of the agreement with the social media platforms. The income is produced from the contractual right given to the social media platforms to place advertisements into the videos. Based on the information provided, the income paid to the Company is for watchers viewing the advertisement, not from the creation of the video itself. The Commissioner is satisfied the income is not personal services income.

Relevant facts and circumstances: The Company creates videos and other content to upload to various social media platforms. When a video is uploaded to a platform, the Company signs an online statement agreeing to their terms and guidelines. The Company can choose if they agree or disagree to have an advertisement (ad) in their video. If the Company agrees to embed an ad into their video, the ad type and length are determined by the platform. The Company can only choose at what point in the video to place the ad. Income from the platform is received from the ads placed within the videos, based on the watch-time of the ad.

Relevant legislative provisions: Income Tax Assessment Act 1997 s ection 84-5