Document ID: chunk:federal_register_of_legislation:C2004A00662:clause:1_3:p13
Version: federal_register_of_legislation:C2004A00662
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 13/20)
Character Range: 33383–36239

object of this Division is to define *personal services businesses in a way that ensures that it covers genuine businesses but not situations that are merely arrangements for dealing with the *personal services income of individuals.

87‑15  What is a personal services business

 (1) An individual or a *personal services entity conducts a personal services business during an income year if the individual or entity meets at least one of the 3 *personal services business tests.

 (2) The 3 personal services business tests are:
 (a) the unrelated clients test under section 87‑20;
 (b) the employment test under section 87‑25;
 (c) the business premises test under section 87‑30.

 (3) However, if 80% or more of an individual's *personal services income during the income year is income from the same entity (or from the same entity and that entity's *associates), the individual's personal services income is not taken to be from conducting a *personal services business unless:
 (a) when the personal services income is gained or produced, a *personal services business determination is in force relating to the individual's personal services income; and
 (b) if the determination was made on the application of a *personal services entity—the individual's personal services income is income from the entity conducting the personal services business.

Note: For personal services business determinations, see Subdivision 87‑B.

87‑20  The unrelated clients test for a personal services business

 (1) An individual or a *personal services entity meets the unrelated clients test in an income year if:
 (a) during the year, the individual or personal services entity gains or produces income from providing services to 2 or more entities that are not *associates of each other, and are not associates of the individual or of the personal services entity; and
 (b) the services are provided as a direct result of the individual or personal services entity making offers or invitations (for example, by advertising), to the public at large or to a section of the public, to provide the services.

 (2) The individual or *personal services entity is not treated, for the purposes of paragraph (1)(b), as having made offers or invitations to provide services merely by being available to provide the services through an entity that conducts a *business of arranging for persons to provide services directly for clients of the entity.

87‑25  The employment test for a personal services business

 (1) An individual meets the employment test in an income year if:
 (a) the individual engages one or more entities (other than *associates of the individual that are not individuals) to perform work; and
 (b) that entity performs, or those entities together perform, at least 20% (by market value) of the individual's principal work for that year.

 (2) A