INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-42 - PERSONAL SERVICES INCOME  

Division 87 - Personal services businesses  

Subdivision 87-A - General  

SECTION 87-35   Personal services income from Australian government agencies  

87-35(1)  
*Australian government agencies are not treated as *associates of each other for the purposes of subsection 87-15(3) and paragraph 87-20(1)(a) .

Example:

You receive 60% of your personal services income from a Department of a State government and 40% of your personal services income from a corporation in which that State has a majority shareholding.

You are not treated as if 80% or more of your personal services income is income from the same entity and that entity's associates, and therefore you will not need a personal services business determination to satisfy subsection 87-15(3) .

In addition, you satisfy the first limb (but not necessarily the second limb) of the unrelated clients test in subsection 87-20(1) , because you receive your personal services income from 2 entities that are not treated as associates of each other.

87-35(2)  
Each Agency within the meaning of the Public Service Act 1999 :


(a) is treated as a separate entity; and


(b) is not treated as an *associate of any other such Agency, or of any *Australian government agency;

for the purposes of subsection 87-15(3) and paragraph 87-20(1)(a) .

Example:

You receive 70% of your personal services income from the Commonwealth Department of Treasury and 30% of your personal services income from the Australian Taxation Office (neither body has a legal identity separate from the Commonwealth Government).

You are not treated as if 80% or more of your personal services income is income from the same entity, or from the same entity and that entity's associates, and therefore you will not need a personal services business determination to satisfy subsection 87-15(3) .

In addition, you satisfy the first limb (but not necessarily the second limb) of the unrelated clients test in subsection 87-20(1) , because you receive your personal services income from 2 bodies that are treated as separate entities and that are not treated as associates of each other.

87-35(3)  
Each part of the government of a State or Territory, and each part of an authority of the State or Territory, that has, under a law of the State or Territory, a status corresponding to an Agency within the meaning of the Public Service Act 1999 :


(a) is treated as a separate entity; and


(b) is not treated as an *associate of any other part of such a government or authority, or of any *Australian government agency;

for the purposes of subsection 87-15(3) and paragraph 87-20(1)(a) .


 

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