Income Tax Assessment Act 1997
CHAPTER 2
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LIABILITY RULES OF GENERAL APPLICATION
PART 2-42
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PERSONAL SERVICES INCOME
Division 87
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Personal services businesses
Subdivision 87-B
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Personal services business determinations
SECTION 87-65
Personal services business determinations for personal services entities
Making etc. personal services business determinations
87-65(1)
The Commissioner may, by giving written notice to a *personal services entity whose *ordinary income or *statutory income includes some or all of an individual ' s *personal services income:
(a) make a personal services business determination relating to the individual ' s personal services income included in the entity ' s ordinary income or statutory income; or
(b) vary such a determination.
87-65(2)
The Commissioner may, in the notice, specify:
(a) the day on which the determination or variation takes effect, or took effect;
(b) the period for which the determination has effect;
(c) conditions to which the determination is subject.
Matters about which the Commissioner must be satisfied
87-65(3)
The Commissioner must not make the determination unless satisfied that, in the income year during which the determination first has effect, or is taken to have first had effect, the conditions in one or more of subsections (3A), (3B), (5) and (6) are met.
First alternative - results, employment or business premises test met or reasonably expected to be met
87-65(3A)
The conditions in this subsection are that:
(a) the entity could reasonably be expected to meet, or met, the results test under section 87-18 , the employment test under section 87-25 , the business premises test under section 87-30 or more than one of those tests; and
(b) the individual ' s *personal services income included in the entity ' s *ordinary income or *statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.
Second alternative - unusual circumstances prevented the results, employment or business premises test from being met
87-65(3B)
The conditions in this subsection are that:
(a) but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, the results test under section 87-18 , the employment test under section 87-25 , the business premises test under section 87-30 or more than one of those tests; and
(b) the individual ' s *personal services income included in the entity ' s *ordinary income or *statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.
87-65(4)
For the purposes of paragraph (3B)(a) but without limiting the scope of that paragraph, unusual circumstances include providing services to an insufficient number of entities to meet the unrelated clients test under section 87-20 if:
(a) the*personal services entity starts a *business during the income year, and can reasonably be expected to meet that test in subsequent income years; or
(b) the personal services entity provides services to only one entity during the income year, but met the test in one or more preceding income years and can reasonably be expected to meet the test in subsequent income years.
Third alternative - unrelated clients test was met but 80% or more of income from same source because of unusual circumstances
87-65(5)
The conditions in this subsection are that:
(a) the entity could reasonably be expected to meet, or met, the unrelated clients test under section 87-20 ; and
(b) because of unusual circumstances applying to the entity in the income year, 80% or more of the individual ' s *personal services income (not including income mentioned in subsection 87-15(4) ) included in the entity ' s *ordinary income or *statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its *associates); and
(c) the individual ' s personal services income included in the entity ' s ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section 87-20 .
Fourth alternative - unrelated clients test not met because of unusual circumstances
87-65(6)
The conditions in this subsection are that:
(a) but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, the unrelated clients test under section 87-20 ; and
(b) if 80% or more of the individual ' s *personal services income (not including income mentioned in subsection 87-15(4) ) included in the entity ' s *ordinary income or *statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its *associates) - that is the case only because of unusual circumstances applying to the entity in the income year; and
(c) the individual ' s personal services income included in the entity ' s ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section 87-20 .
87-65(7)
(Repealed by No 169 of 2001)
View history note
Hide history noteMaking etc. personal services business determinations
87-65(1)
The Commissioner may, by giving written notice to a *personal services entity whose *ordinary income or *statutory income includes some or all of an individual ' s *personal services income:
(a) make a personal services business determination relating to the individual ' s personal services income included in the entity ' s ordinary income or statutory income; or
(b) vary such a determination.
87-65(2)
The Commissioner may, in the notice, specify:
(a) the day on which the determination or variation takes effect, or took effect;
(b) the period for which the determination has effect;
(c) conditions to which the determination is subject.
Matters about which the Commissioner must be satisfied
87-65(3)
The Commissioner must not make the determination unless satisfied that, in the income year during which the determination first has effect, or is taken to have first had effect, the conditions in one or more of subsections (3A), (3B), (5) and (6) are met.
First alternative - results, employment or business premises test met or reasonably expected to be met
87-65(3A)
The conditions in this subsection are that:
(a) the entity could reasonably be expected to meet, or met, the results test under section 87-18 , the employment test under section 87-25 , the business premises test under section 87-30 or more than one of those tests; and
(b) the individual ' s *personal services income included in the entity ' s *ordinary income or *statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.
Second alternative - unusual circumstances prevented the results, employment or business premises test from being met
87-65(3B)
The conditions in this subsection are that:
(a) but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, the results test under section 87-18 , the employment test under section 87-25 , the business premises test under section 87-30 or more than one of those tests; and
(b) the individual ' s *personal services income included in the entity ' s *ordinary income or *statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.
87-65(4)
For the purposes of paragraph (3B)(a) but without limiting the scope of that paragraph, unusual circumstances include providing services to an insufficient number of entities to meet the unrelated clients test under section 87-20 if:
(a) the*personal services entity starts a *business during the income year, and can reasonably be expected to meet that test in subsequent income years; or
(b) the personal services entity provides services to only one entity during the income year, but met the test in one or more preceding income years and can reasonably be expected to meet the test in subsequent income years.
Third alternative - unrelated clients test was met but 80% or more of income from same source because of unusual circumstances
87-65(5)
The conditions in this subsection are that:
(a) the entity could reasonably be expected to meet, or met, the unrelated clients test under section 87-20 ; and
(b) because of unusual circumstances applying to the entity in the income year, 80% or more of the individual ' s *personal services income (not including income mentioned in subsection 87-15(4) ) included in the entity ' s *ordinary income or *statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its *associates); and
(c) the individual ' s personal services income included in the entity ' s ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section 87-20 .
Fourth alternative - unrelated clients test not met because of unusual circumstances
87-65(6)
The conditions in this subsection are that:
(a) but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, the unrelated clients test under section 87-20 ; and
(b) if 80% or more of the individual ' s *personal services income (not including income mentioned in subsection 87-15(4) ) included in the entity ' s *ordinary income or *statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its *associates) - that is the case only because of unusual circumstances applying to the entity in the income year; and
(c) the individual ' s personal services income included in the entity ' s ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section 87-20 .
87-65(7)
(Repealed by No 169 of 2001)
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