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Edited version of private advice
Authorisation Number: 4110080421397
Date of advice: 04 May 2020
Ruling
Subject: Personal services income - Income from a business structure
Question
Is the income that that you receive via your business name personal services income under section 84-5 of the Income Tax Assessment 1997?
Answer
No. The income from your business is generated from income yielding from a structure of a business rather than personal services income (PSI).
The definition of PSI is contained in subsection 84-5(1) of the Income Tax Assessment Act 1997.The definition says that income (including ordinary income or statutory income) that is mainly a reward for an individual's personal efforts or skills is personal services income.
Your business has many employees, and is not dependent on a particular individual's personal skill, efforts or expertise. The income from your business is generated by the structure of your business rather than from an individual's personal services. The income from your business is not personal services income.
For more information see Income from a business structure or go to ato.gov.au and search QC 17521.
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
You are a professional and as a sole trader offer services under a business name.
Your business has a website.
You receive your enquiries and clients through the website.
You have engaged XX people in various capacities in your business to perform the work.
The income received is not dependant on your own or an individual's particular skills.
You have provided copies of contracts for casual employment, lists of duties and copies of rosters for your employees.
You have provided Invoices from your clients.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 84-5