Tennis Australia Limited - payments to tennis officials
Please note that the PDF version is the authorised version of this ruling.
|Table of Contents||Paragraph|
|What this Ruling is about|
|Who this Ruling applies to|
|When this Ruling applies|
|Appendix - Explanation|
Relying on this Ruling
This publication (excluding appendix) is a public ruling for the purposes of the Taxation Administration Act 1953.
If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.
6. Payments you receive from TA for officiating at non-professional tennis events are not assessable as ordinary income for the purposes of section 6-5, nor are they statutory income for the purposes of section 6-10. Losses and outgoings incurred by you in respect of receiving these payments from TA cannot be claimed as a deduction under section 8-1 or any other provision of the ITAA 1997.
Tennis Australia Limited
8. TA is a not-for-profit organisation that promotes and encourages participation in the sport of tennis in Australia. To encourage members of the community to participate in local sporting activities, TA provides trained officials (TA officials) for tennis events throughout Australia.
9. TA officials have different roles, including referee, chair umpire, chief umpire, court supervisor and line umpire. TA officials do not necessarily perform the same role at every tournament/competition in which they participate.
12. TA will issue an 'availability form' to active TA officials who are then able to state their interest in a specific tournament/competition. A selection is then made by TA with reference to availability, qualifications, merit and reasonable distribution of engagements between TA officials. No club or league has any influence over which TA officials are appointed to which match.
15. TA officials have costs associated with participation. For example, they are required to incur their own expenditure for sunscreen, uniforms, tennis shoes and all other sundry items required to perform their duties. Shirts and hats are provided by TA.
When this Ruling does not apply
- to individuals for officiating at the Australian Open, professional or semi-professional events, or
- as a part of an employment or services contract.
- engaged regularly to officiate at professional or semi-professional events, or
- employed or carry on a business as a tennis official, referee or umpire.
- Association of Tennis Professionals and Women's Tennis Association tour events
- International Tennis Federation (ITF) and Universal Tennis Rating Pro Tour
- ITF Junior Tour
- ITF Wheelchair Tour
- ITF Seniors Tour
- Australian Ranking Tournaments
- Australian Open Series.
Commissioner of Taxation
1 September 2021
|This Explanation is provided as information to help you understand how the Commissioner's view has been reached. It does not form part of the binding public ruling.|
|Table of Contents||Paragraph|
|Payment is not included in assessable income||24|
- income in the ordinary sense of the word (ordinary income) as per section 6-5, or
- an amount or benefit that through the operation of the provisions of the tax law is included in assessable income (statutory income), as per section 6-10.
27. In GP International Pipecoaters Pty Ltd v Commissioner of Taxation (Cth), the Full High Court stated:
To determine whether a receipt is of an income or of a capital nature, various factors may be relevant. Sometimes, the character of receipts will be revealed most clearly by their periodicity, regularity or recurrence; sometimes, by the character of a right or thing disposed of in exchange for the receipt; sometimes, by the scope of the transaction, venture or business in or by reason of which money is received and by the recipient's purpose in engaging in the transaction, venture or business.
28. Amounts that are periodical, regular or recurrent, relied upon by a recipient for their regular expenditure and paid to them for that purpose are likely to be ordinary income, as are amounts that are the product in a real sense of any employment of, or services rendered by, the recipient. Amounts paid in substitution for salary or wages foregone or lost may also be ordinary income.
29. Ultimately, whether or not a particular receipt is ordinary income depends on its character in the hands of the recipient. The whole of the circumstances must be considered and the motive of the payer may be a relevant consideration.
30. In Scott, Windeyer J considered whether a gratuitous payment to the taxpayer's solicitor was income. His Honour held that, to be income, the gratuitous payment had to be, in a relevant sense, a product of the donee's income-producing activities. In The Commissioner of Taxation of the Commonwealth of Australia v Harris, G.O., a bank made a lump sum payment to supplement a former employee's pension so as to alleviate the negative effects of high inflation. The majority held that the payment was not a product of the former employment relationship and this was an important element in finding that the payment was not income.
31. Where a taxpayer's activities constitute a pastime or hobby rather than an income-producing activity, money and other benefits received from the pursuit of that pastime or hobby will not be included in their assessable income as ordinary income, even if the receipts are regular or periodical.
32. A pastime or hobby can be described as a social or personal pursuit of a non-commercial nature. Amounts received from engaging in a pastime or hobby are generally not intended to, and often do not, cover expenses.
33. The activities of TA officials participating at non-professional tennis events are a social or personal pursuit of a non-commercial nature and constitute a pastime or hobby. Consequently, the payments received are not assessable as ordinary income.
- TA officials are not under employment contracts with TA or its member associations and do not officiate regularly at professional or semi-professional tournaments
- engagements to officiate are ad hoc and irregular
- the amount of each payment made by TA is not intended to, and does not usually, cover TA officials' expenses for attending the tennis event, and
- the purpose of the payments to TA officials is to encourage their participation in local sporting activities by subsidising costs associated with their participation.
35. These factors, when considered together, lead to the conclusion that the amounts received by TA officials to participate in non-professional tennis events are not ordinary income under subsection 6-5(1).
37. These amounts are called statutory income. A list of the statutory income provisions can be found in section 10-5. The most relevant provision to consider for TA officials is the potential operation of section 15-2.
Your assessable income includes the value to you of all allowances, gratuities, compensation, benefits, bonuses and premiums provided to you in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by you ...
40. TA officials covered by this Ruling are not considered to be employees of TA or its affiliated member associations. The payments are considered to be incidental to a pastime or hobby and not a product or incident of any employment or a reward for services rendered by them. As such, the payments are not assessable under section 15-2.
42. As the payments received by TA officials are not assessable income, all losses and outgoings that are incurred in connection with these activities are not allowable as deductions under section 8-1, nor will a deduction be allowable under any other provision of the ITAA 1997.
43. Payments made to a TA official engaged in a hobby or pastime activity are not assessable income. The payments are not regarded as withholding payments under Division 12 of Schedule 1 to the Taxation Administration Act 1953. TA or its affiliated member associations making payments to TA officials who are in the class of entities to which this Ruling applies will not be required to withhold amounts from these payments, nor do they have any other associated PAYG withholding obligations, for example, obtaining tax file number declarations, providing payment summaries or annual reporting.
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
 HCA 25.
Hayes v Commissioner of Taxation (Cth)  HCA 21 (Hayes); Commissioner of Taxation of the Commonwealth of Australia v Rowe, Anthony John Poulston  FCA 834.
Commissioner of Taxation (Cth) v Dixon  HCA 65, per Fullagar J.
Scott v Federal Commissioner of Taxation  HCA 48 (Scott); Hayes; Federal Coke Company Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia  FCA 29.
Squatting Investment Co Ltd v Commissioner of Taxation  HCA 13.
 FCA 74.
Not previously issued as a draft
Commissioner of Taxation of the Commonwealth of Australia v Rowe, Anthony John Poulston
 FCA 834
60 FCR 99
95 ATC 4691
31 ATR 392
Federal Coke Company Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia
 FCA 29
77 ATC 4255
7 ATR 519
15 ALR 449
34 FLR 375
GP International Pipecoaters Pty Ltd v Commissioner of Taxation (Cth)
 HCA 25
170 CLR 124
64 ALJR 392
90 ATC 4413
21 ATR 1
Hayes v Commissioner of Taxation (Cth)
 HCA 21
96 CLR 47
11 ATD 68
30 ALJ 96
Scott v Federal Commissioner of Taxation
 HCA 48
117 CLR 514
40 ALJR 205
 ALR 561
14 ATD 286
Squatting Investment Co Ltd v Commissioner of Taxation
 HCA 13
86 CLR 570
 ALR 366
26 ALR 658
10 ATD 126
The Commissioner of Taxation of the Commonwealth of Australia v Harris, G.O.
 FCA 74
43 FLR 36
80 ATC 4238
10 ATR 869
30 ALR 10