Apply for a PSB determination

What is a PSBD?

A personal services business determination (PSBD) is a notice from the Commissioner of Taxation which states that one of the personal service business (PSB) tests has been met for the relevant income year.

Where a PSBD is issued, the personal services income (PSI) rules will not apply to that income for the income year.

PSBDs are only issued in relation to one 'test' individual. If multiple individuals are earning PSI through another entity such as a company, partnership or trust (which we refer to as a 'personal services entity' or PSE), the entity will need to apply for a PSBD for each individual.

You can apply to us for a PSBD if:

• you are unsure whether you have passed one of the PSB tests
• unusual circumstances prevented you from passing one of the PSB tests, or
• you met the unrelated clients test but unusual circumstances prevented you from meeting the 80% rule.

Unusual circumstances

Unusual circumstances are temporary, short-term circumstances that stop you from passing a PSB test because they are completely out of the ordinary.

The unusual circumstances must specifically apply to the individual that the PSBD is in relation to. Industry-wide circumstances, such as economic downturn affecting a particular industry, cannot be relied on as an unusual circumstance when applying for a PSBD.

The unusual circumstances must be temporary, rather than the 'new norm' or a new mode of operation. The more temporary the circumstances are, and the greater the likelihood that the situation will return to normal, the easier it will be to demonstrate that there were unusual circumstances which prevented you from meeting a PSB test.

If you are applying for a PSBD in relation to the unrelated clients test, we will also accept the following as unusual circumstances:

• you started a business during the income year and can reasonably expect to pass one of the PSB tests in the next income year, or
• you provided services to only one client during the income year, but you passed the unrelated clients test in one or more prior income years and can reasonably expect to pass the unrelated clients test again in the next income year.

Apply for a PSBD

There are 2 ways to apply for a PSBD:

1. Use our Personal services income tool
2. Complete the Personal services business determination application

If you're still unsure of your circumstances, you may need to seek further advice from us or a registered tax professional.

If you are unable to self-assess as a PSB, you can apply to the ATO for a PSB determination in some circumstances.