Part 2-1—Assessable income
Division 15—Some items of assessable income
(Division 6—Assessable income and exempt income- Australian Taxation / Blogs | Financesolution.com
15-2 Allowances and other things provided in respect of employment or services
- Your assessable income includes the value to you of all allowances, gratuities, compensation, benefits, bonuses and premiums *provided to you in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by you (including any service as a member of the Defence Force).
- This is so whether the things were *provided in money or in any other form.
- However, the value of the following are not included in your assessable income under this section:
- superannuation lump sum or an *employment termination payment;
- an *unused annual leave payment or an *unused long service leave payment;
- a *dividend or *non-share dividend;
- an amount that is assessable as *ordinary income under section 6-5;
- *ESS interests to which Subdivision 83A-B or 83A-C (about employee share schemes) applies.
Note: Section 23L of the Income Tax Assessment Act 1936 provides that fringe benefits are non-assessable non-exempt income.
15-3 Return to work payments
Your assessable income includes an amount you receive under an *arrangement that an entity enters into for a purpose of inducing you to resume working for, or providing services to, any entity.
(Incentive paid to staff to bring them in previous role)
15-5 Accrued leave transfer payments
Your assessable income includes an *accrued leave transfer payment that you receive.
Example
Imagine Mr. A is working with XYZ Ltd and he transfers his employment to ABC Ltd.
XYZ Ltd Pays $20,000 to ABC Ltd. For Mr A’s accrued leave entitlements.
This $20,000 payment will be included in assessable income of XYZ Ltd.
To find out if the payment is deductible to the payer, see section 26-10.
15-10 Bounties and subsidies
Your assessable income includes a bounty or subsidy that:
- you receive in relation to carrying on a business; and
- is not assessable as ordinary income under section 6-5.
(These are payment/financial benefits provided to a business by the government like grant, incentive etc.
Included in assessable income only if the bounty or subsidy is not already assessable as ordinary income under Section 6-5.)
15-15 Profit-making undertaking or plan
- Your assessable income includes profit arising from the carrying on or carrying out of a profit-making undertaking or plan.
- This section does not apply to a profit that:
- is assessable as *ordinary income under section 6-5; or
- arises in respect of the sale of property acquired on or after 20 September 1985.
Note: If you sell property you acquired before 20 September 1985 for profit-making by sale, your assessable income includes the profit: see section 25A of the Income Tax Assessment Act 1936.
15-20 Royalties
- Your assessable income includes an amount that you receive as or by way of royalty within the ordinary meaning of “royalty”.
(disregarding the definition of royalty in subsection 995-1(1)) if the amount is not assessable as *ordinary income under section 6-5.
“It means If you receive an amount as or by way of royalty, and it is not assessable as ordinary income under Section 6-5, it is still included in your assessable income under Section 15-20.”
Subsection (1) does not apply to an amount of a payment to which section 15-22 or 15-23 applies.
15-23 Payments of resale royalties by resale royalty collecting society
- This section, instead of Division 6 of Part III of the Income Tax Assessment Act 1936, applies to a payment that the *resale royalty collecting society makes to you under section 26 of the Resale Royalty Right for Visual Artists Act 2009.
- Your assessable income includes the amount of the payment, except to the extent that the payment represents an amount on which the directors of the society are or have been assessed, and are liable to pay *tax, under section 98, 99 or 99A of the Income Tax Assessment Act 1936.
Note: Section 410-50 of this Act requires the resale royalty collecting society to give you a notice at the time of payment.
Explanation to this Rule.
“The resale royalty refers to a legal right that allows visual artists to receive a percentage of the sale price whenever their artwork is resold in the secondary market
- This section replaces the rules in Division 6 of Part III of the Income Tax Assessment Act 1936 for payments made by the resale royalty collecting society.
- It ensures that payments made to individuals under the resale royalty scheme are taxed appropriately.
Inclusion in Assessable Income:
- Payments received from the resale royalty collecting society are included in the recipient's assessable income.
- However, if the payment represents an amount on which the directors of the society have already been assessed and are liable to pay tax (under Section 98, 99, or 99A of the Income Tax Assessment Act 1936), that portion is excluded from the recipient's assessable income.
This provision ensures that resale royalties paid to visual artists or their beneficiaries are taxed fairly, while avoiding double taxation on amounts already assessed at the society level.
Example Scenario
- Visual Artist: Emily is a well-known painter.
- Sale of Artwork: Emily sold one of her paintings in 2015 to an art collector.
- Resale: In 2025, the same painting is resold by the art collector through an auction house for $50,00
Tax Treatment:
- Payment Received: The resale royalty collecting society collects $2,500 from the art collector and pays it to Emily.
- Inclusion in Assessable Income: Emily must include the $2,500 royalty payment in her assessable income for the year. This ensures
Example Scenario:
- A visual artist, Sarah, created a painting in 2018 and sold it for $5,000.
- Resale: In 2025, the painting is resold at an auction for $20,000.
- Royalty Entitlement: Under the Resale Royalty Right for Visual Artists Act 2009, Sarah is entitled to 5% of the resale price ($1,000) as a resale royalty payment.
- Payment Process: The resale royalty collecting society collects the $1,000 from the auction house and pays it to Sarah.
- Tax Treatment: The $1,000 payment must be included in Sarah's assessable income, unless some part of it has already been taxed at the society level under sections 98, 99, or 99A of the Income
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