INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 16A - Abnormal income of artists, composers, inventors, performers, production associates, sportspersons and writers  

SECTION 158H   ELIGIBLE ASSESSABLE INCOME  

158H(1)   [Eligible assessable income]  

Subject to this section, for the purposes of this Division, the eligible assessable income of a year of income of a taxpayer is so much of the assessable income of the taxpayer of the year of income as consists of:

(a) assessable income derived by the taxpayer in relation to services rendered by the taxpayer to the extent to which the assessable income is derived as a reward in respect of the taxpayer's activities as an eligible person (whether or not the assessable income is derived by way of consideration for entering into an arrangement for the rendering of services);

(b) assessable income derived by the taxpayer by way of a prize in respect of the taxpayer's activities as an eligible person;

(c) assessable income derived by the taxpayer in relation to any of the following services rendered by the taxpayer:

(i) endorsing or promoting goods or services;

(ii) appearing or participating in an advertisement;

(iii) appearing or participating in an interview;

(iv) services as a commentator;

(v) any similar services;

the extent to which the income is attributable to the taxpayer being, or having been, an eligible person (whether or not the assessable income is derived by way of consideration for entering into an arrangement for the rendering of services); or

(d) assessable income derived by the taxpayer:

(i) as consideration:

(A) for the assignment, in whole or in part, of, or for the grant of an interest by licence in, the copyright in a literary, dramatic, musical or artistic work of which the taxpayer is the author or the patent for an invention of which the taxpayer is the inventor; or

(B) for an assignment by virtue of which the assignee has the right to make an application for a patent for an invention of which the taxpayer is the inventor;

(ii) as an advance on account of royalties in respect of such a copyright or patent;

(iii) as a prize in respect of such a work or invention; or

(iv) as an amount (other than an amount to which subparagraph (i), (ii) or (iii) applies or remuneration for services rendered by the taxpayer) received by the taxpayer, by way of royalties or otherwise, in respect of, or in respect of the copyright in, a literary, dramatic, musical or artistic work of which the taxpayer is the author or in respect of, or in respect of the patent for, an invention of which the taxpayer is the inventor.

158H(2)   [Unreasonably large and small components of income]  

For the purposes of this Division, where:

(a) a taxpayer derives, or has derived, assessable income (in this subsection called the ``arrangement income'') directly or indirectly under or as a result of an arrangement;

(b) the arrangement income consists of the following components:

(i) a component of eligible assessable income;

(ii) a component of other assessable income; and

(c) the Commissioner is of the opinion that:

(i) one of those components (in this subsection called the ``large component'') is unreasonably large;

(ii) the other component (in this subsection called the ``small component'') is unreasonably small; and

(iii) the reason, or any of the reasons, why the large component is unreasonably large is related directly or indirectly to the reason, or any of the reasons, why the small component is unreasonably small;

the Commissioner may treat so much of the large component as exceeds an amount which, in the opinion of the Commissioner, is reasonable, as having been part of the small component instead of part of the large component.

158H(3)   [Excluded income]  

A reference in this section to assessable income does not include a reference to:

(a) an eligible termination payment within the meaning of Subdivision AA of Division 2 ;

(b) an amount to which section 26AC or 26AD applies; or

(c) a net capital gain.