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  • Alternative test

    The Commissioner has determined alternative tests for fall in turnover for classes of entities where there is not an appropriate relevant comparison period in 2019 for the purposes of an entity in the class of entities satisfying the basic test.

    The relevant appropriate comparison period in 2019 is a calendar month that ends after 30 March 2019 and before 1 October 2019 or a quarter that starts on 1 April 2019 or on 1 July 2019.

    However, if an entity satisfies the basic test, it does not need to go to an alternative test determined by the Commissioner.

    Circumstances where an alternative test applies:

    • The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020.
    • The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now).
    • The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now).
    • The entity’s turnover substantially increased by    
      • 50% or more in the 12 months immediately before the applicable turnover test period, or
      • 25% or more in the 6 months immediately before the applicable turnover test period, or
      • 12.5% or more in the 3 months immediately before the applicable turnover test period.
    • The entity was affected by drought or other declared natural disaster during the relevant comparison period.
    • The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or
    • The entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.

    If an alternative decline in turnover test applies in these circumstances, the Commissioner also sets out what that alternative decline in turnover test is.

    You can get more information on these alternative tests in the Legislative Instrument and Explanatory Statement:

    The Commissioner cannot determine an alternative decline in turnover test in all circumstances. It is only where there is an event or circumstance that is outside the usual business setting for entities of that class that results in the relevant comparison period in 2019 not being appropriate for applying the basic test.

    The Commissioner can also only determine a test for a class of entities, and cannot make discretionary decisions for individual entities.

    If you fall into more than one of the classes of entities covered by the alternative test, you can choose which alternative decline in turnover test to apply. You only need to satisfy one of the tests (it does not matter if you do not satisfy one of the other tests that applies to you).

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      Last modified: 05 Jun 2020QC 62132