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Edited version of private advice
Authorisation Number: 1051891320154
Date of advice: 25 August 2021
Ruling
Subject: Non commercial losses - special circumstances
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-20XX financial year?
Answer
Yes
Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control and that these prevented you meeting one of the four tests. Consequently, the Commissioner will exercise his discretion in the 20XX-XX financial year.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a business in the ride sourcing industry.
You commenced business operations in the 20XX-XX financial year.
In the 20XX-XX financial year Covid-19 impacted your business activity.
Your business was impacted in the following ways:
• Government Covid-19 (coronavirus) health and safety plans put in place in the interest of public safety Social distancing rules
• Venue closures
• Travel restrictions for the wellbeing of staff and customers created significant downturn to normal turnover.
You intend to meet the assessable income test in the 20XX-XX financial year.
Legislative provisions
Income Tax Assessment Act 1997 subsection 35-10(1)
Income Tax Assessment Act 1997 subsection 35-10(2)
Income Tax Assessment Act 1997 subsection 35-10(2E)
Income Tax Assessment Act 1997 paragraph 35-55(1)(a)