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Edited version of your written advice

Authorisation Number: 1013094537740

Date of advice: 21 September 2016

Ruling

Subject: Above-averaging special professional income - Modelling

Question 1

Does a fashion model qualify as a performing artist in accordance with the provisions of Section 405-25(2) of the Income Tax Assessment act 1997?

Answer

Yes

This ruling applies for the following periods:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You came to Australia in to complete a Degree.

You advised that you work as an actor and as a model.

You are a contractor when you are engaged as a model.

Your modelling employment is through agencies on short term contracts.

You exceeded the $2500 derived income from modelling and acting in the 20XX Financial Year.

You are deemed to be an Australian resident for tax purposes for the 20XX Financial Year.

Relevant legislative provisions

Income Tax Assessment Act 1997 - Division 405

Income Tax Assessment Act 1997 - Section 405-20

Income Tax Assessment Act 1997 - Section 405-25

Income Tax Assessment Act 1997 - Subsection 405-25(1)

Income Tax Assessment Act 1997 - Subsection 405-25(2)

Income Tax Assessment Act 1997 - Subsection 405-25(3)

Income Tax Assessment Act 1997 - Section 405-30

Taxation Administration Regulations 1976 - Regulation 44(2)

Reasons for decision

Division 405 of the ITAA 1997 applies special rates of tax on the above-average professional income of special professionals. It reduces the effect that fluctuations in special professional income would otherwise have on the income tax liability of these persons.

Under this division you are only subject to concessional tax treatment if:

Subsection 405-25(1) of the ITAA 1997 states that you are a special professional if you are a performing artist.

Subsection 405-25(2) of the ITAA 1997 states that you are a performing artist if you exercise intellectual, artistic, musical, physical or other personal skills in the presence of an audience by performing or presenting:

Further, subsection 405-25(3) of the ITAA 1997 states that you are also a performing artist if you perform or appear in or on a film, tape, disc or television or radio broadcast.

Taxation Administration Regulations 1976 Regulation 44(2) determines performing artist includes a singer, dancer, actor, model or a similar individual who is engaged to use her intellectual, artistic, musical, physical or other personal skill.

Application to your circumstances

You have two special professional activities being acting and modelling. Your combined assessable income from both special professional activities was greater than $2,500 in taxable professional income during the relevant financial year, and you were an Australian resident for tax purposes in the preceding financial year, this year is considered your first year for special professional averaging.

Therefore the concessional tax treatment can be applied to the special professional income you earn

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