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Edited version of private advice
Authorisation Number: 1051917656753
Date of advice: 4 November 2021
Ruling
Subject: Commissioner's discretion - lead time
Question
Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 (ITAA1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX financial years?
Answer
Yes.
Having regard to your full circumstances, it is accepted that it is the nature of the business activity that has prevented you making a tax profit. It is also accepted that you will make a tax profit within the commercially viable period for your industry. Consequently, the Commissioner will exercise his discretion in the XXXX to XXXX financial years.
This ruling applies for the following periods:
1 July 20XX to 30 June 20XX
The scheme commences on:
1 April 20XX
Relevant facts and circumstances
You do not satisfy the under $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
You carry on a primary production enterprise.
You commenced operations during the XXXX financial year.
Due to the large start-up capital required to purchase livestock for your business it was not commercially viable for you to make a profit in the XXXX financial year, and you suffered a loss.
You have provided independent evidence that attests to a commercially viable period of 2 years for your industry.
You intend to make a tax profit in the XXXX financial year.
Relevant 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)(c)