• Appendix B

    The definition of an enterprise for GST and ABN purposes includes:

    An activity or series of activities done:

    • in the form of a business, or
    • in the form of an adventure or concern in the nature of trade.

    But does not include an activity or series of activities done:

    • as a private recreational pursuit or hobby, or
    • by an individual or partnership (mainly of individuals) without a reasonable expectation of profit or gain.

    The main indicators of carrying on a business for income tax purposes are:

    • significant commercial activity
    • purpose and intention of the taxpayer in engaging in the activity
    • an intention to make a profit from the activity
    • the activity is or will be profitable
    • repetition and regularity of activity
    • the activity is carried on in a similar manner to that of the ordinary trade
    • the activity is organised and carried on in a business like manner and systematically - records are kept
    • size and scale of the activity
    • not a hobby or recreational activity
    • a business plan exists
    • commercial sales of product
    • taxpayer has knowledge or skill.
      Last modified: 17 May 2013QC 16398