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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051251553804

Date of advice: 14 July 2017

Ruling

Subject: Special Professional Income Averaging

Question 1

Are you considered to be a special professional for averaging purposes in relation to the creation of videos as the producer, director and participant for online sales?

Answer

Yes

Question 2

Does a beautician who works with entertainment sets and performing artists, fit the definition of a special professional under the Act?

Answer

No

This ruling applies for the following period:

Period ended 2017

The scheme commences on:

01 July 2016

Relevant facts and circumstances

You are a sole trader.

You have a business.

You have a registered trademark.

You have been acknowledged by your industry.

You produced, directed and participated in a video for online distribution.

Your videos generate income. You receive payment from an e-commerce site.

You have social media presence including Facebook and Instagram

You have regular write ups and editorials written about you both online and in print.

You provide services for clients.

You attend trade shows.

You conduct workshops for professional individuals. These classes target individuals that want to learn your procedures.

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 405

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 subsection 405-25(4)

Income Tax Assessment Act 1997 subsection 405-25(5)

Reasons for decision

Legislative references within the Reasons for decision are to the Income Tax Assessment Act 1997

Question 1

Subsection 405-25(1) states that you are a special professional if you are:

You are a production associate as defined in subsection 405-25(4) if you provide artistic support for an activity in subsection 405-25(2) involving the making of a film, tape, disc or television or radio broadcast as a director or a producer. Artistic support activities include the services such as director, film editor or producer to name a few categories from subsection 405-25(5).

You have indicated that you were the director, producer and participated in Tutorials for distribution via online services. These roles are regarded as Special Professional roles. These videos are posted on line, which allows anyone with internet access to view your videos upon registration and payment.

However your other services are not regarded as a Special Professional role under section 405-25.

Question 2

Providing services at entertainment sets on performing artists does not have sufficient nexus to determine you are a Special Professional under the Act. Special Professionals are seen as inventors, performing artists, production associates and sportspersons. As a beautician you do not fall within these categories.

A Makeup Artist is a trained person whose job it is to improve the appearance of a customer’s face, body, and hair, using make-up and beauty treatments. Whilst it is acknowledged that you have significant skills. The profession of Makeup Artist does not meet the strict application of the legislation as a Special Professional under section 405-25.

Appearing at tradeshows or delivering classes are not seen as an artistic performance for an audience therefore are not regarded as a professional artist under subsection 405-25(2). The delivery of classes is seen as taking on the role of providing an education service. Services, including your role as an educator, are not listed as an artistic support activity in subsection 405-25(5). Whilst you work with clients who may be seen as performing artists this does not mean that you are also seen as a performing artist in consideration of subsection 405-25(1).

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