Decision impact statement
Re Applicant for an Australian Business Number and Registrar of the Australian Business Register
Venue: Administrative Appeals Tribunal
Venue Reference No: W2005/192
Judge Name: Justice Downes, President
Judgment date: 20 February 2007
Appeal on foot:
No.
Impacted Advice
Relevant Rulings/Determinations:
Subject References:
ABN
Carrying on an enterprise
Reasonable expectation of profit or gain
 This document is not a public ruling, but provides a statement of the Commissioner's position in relation to the decision and how the law will be administered as a consequence of the decision. Any proposals for changes in the law are matters for government and it is not appropriate for the Commissioner to comment. |
Précis
Cancellation of an Australian Business Number (ABN) with effect from an earlier date where it was considered that the taxpayer was not carrying on an enterprise because there was never any expectation of making a profit.
Brief summary of facts
The applicant was audited by the Registrar who considered that the applicant was not carrying on an enterprise and that what he did do never had any likelihood of making a profit. His ABN was cancelled with effect from 1 July 2000.
The applicant attended the Tribunal with a DVD containing hundreds of photographs showing items that he constructed and sold and he gave oral evidence in relation to these. The Tribunal allowed the applicant to present this evidence and accepted that he carried on manufacturing and selling operations on a reasonably large scale and that he had a reasonable expectation of making a profit.
The applicant gave evidence that he ceased his business in late 2004.
Issues decided by the tribunal
The Tribunal decided that:
- 1.
- The applicant was carrying on an enterprise;
- 2.
- Viewed objectively, the applicant had a reasonable expectation of making a profit despite the fact that hindsight shows that he never actually achieved a profit.
The Tribunal set aside the decision under review and substituted a decision cancelling the ABN from 31 December 2004.
Tax Office view of Decision
The decision was open to the Tribunal on the basis of the evidence presented at the Tribunal hearing.
Implications on Law Administration Practice Statements
None
Court citation:
[2007] AATA 63
2007 ATC 103
65 ATR 434
Legislative References:
A New Tax System (Australian Business Number) Act 1999
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