Part One: Definitions

What is a ‘professional artist’?

As with all business ventures, the ATO really has the first and last word on what principles are to be applied in determining whether an artist is carrying on business as a 'professional artist’.  Without trying to overcomplicate the issue, the law is set down by the Income Assessment Act 1997 (ITAA 1997), and specifically relates to:

·       S 6-5

o   Income according to ordinary concepts, because it has been earnt in the ordinary course of carrying on such a business;

·       S 8-1

o    whether a loss or outgoing has been necessarily incurred

·       Division 35

o   Whether a deferment of losses applies

·       Ss35-10(4)

o   Whether the second arm of the exception concerning a 'professional arts business'

For the purposes of definition ss35-10(5) provides the definition of “professional arts business” activities as either

·       an author of a literary, dramatic, musical or artistic work;

·       a performing artist; or

·       a production associate.

For further information please feel free to contact us at Financial Control and Management.