Edited version of private advice

Authorisation Number: 1051895896420

Date of advice: 4 September 2021

Ruling

Subject: Internet gaming skin trading

Question

Are you in the business of trading in video game skins?

Answer

No.

On balance, you don't meet the relevant factors contained in Taxation Ruling TR 97/11. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au

You should note that conducting an activity that has been described as a hobby is a 'status'. You can change from conducting an activity as a hobby to that of being in business and vice-versa over time as your level of activity changes. Therefore, you should evaluate your level of activity on a regular basis to see whether you are conducting a hobby or carrying on a business.

This ruling applies for the following period:

Financial year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You engage in playing an online video game that offers the in-game purchase of skins as an option.

To allow for your desired changing of your game skins, you engage in purchasing of the skins on a frequent basis, with subsequent resales after approximately 2-4 weeks.

You have stated that your primary intent at the present time is to play the game in different skins, rather than make profit from the activity. Although you do try to ensure purchases are well priced to avoid losing money on the activity.

You have not registered an ABN or business name for your activity.

You have stated that your skin trading activity is at a significantly small scale than other commercial, third party trading sites.

You keep records of your skin purchases and sales. You have provided that this is in order to ensure you are not spending too much money on items. The cumulative totals of your transactions are tracked on the website skinsport.com.

The website tracking does not provide month by month trading figures. You have provided the approximated trading information for the skins, for the 20XX-XX financial year. This shows a reasonably overall value of trading transactions, with purchases of slightly higher value than sales.

You do not keep any other records of the activity, nor do you have an established trading strategy or plan.

Your activity is conducted from home using your personal computer.

You do not have any licences or qualifications related to the activity, nor do you need them.

You started the trading activity in January 20XX

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 995-1