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TD 2009/22: Income tax: value of goods taken from
stock for private use for the 2009-10 income year
Preamble
|
 This
publication provides you with the following level of
protection:
This publication (excluding appendixes) is a public
ruling for the purposes of the Taxation
Administration Act 1953.
A public ruling is an expression of the Commissioner's
opinion about the way in which a relevant provision
applies, or would apply, to entities generally or to a
class of entities in relation to a particular scheme or
a class of schemes.
If you rely on this ruling, the Commissioner must apply
the law to you in the way set out in the ruling (unless
the Commissioner is satisfied that the ruling is
incorrect and disadvantages you, in which case the law
may be applied to you in a way that is more favourable
for you - provided the Commissioner is not prevented
from doing so by a time limit imposed by the law). You
will be protected from having to pay any underpaid tax,
penalty or interest in respect of the matters covered by
this ruling if it turns out that it does not correctly
state how the relevant provision applies to you. |
Ruling
1. This Determination provides an update of amounts that the
Commissioner will accept as estimates of the value of goods
taken from trading stock for private use by taxpayers in named
industries. The updated amounts are contained in the Schedule at
paragraph 2 of this Determination.
Schedule for the value of goods taken from trading stock
2. The Schedule for the value of goods taken from trading stock
for private use in the 2009-10 income year is:
|
TYPE OF BUSINESS |
AMOUNT (EXCLUDING GST) FOR ADULT/CHILD
OVER 16 YEARS
$ |
AMOUNT (EXCLUDING GST) FOR CHILD 4-16
YEARS
$ |
|
Bakery |
1,130 |
565 |
|
Butcher |
760 |
380 |
|
Restaurant/cafe (licensed) |
3,860 |
1,540 |
|
Restaurant/cafe (unlicensed) |
3,080 |
1,540 |
|
Caterer |
3,330 |
1,665 |
|
Delicatessen |
3,080 |
1,540 |
|
Fruiterer/greengrocer |
810 |
405 |
|
Takeaway food shop |
2,920 |
1,460 |
|
Mixed business (includes milk bar, general
store and convenience store) |
3,680 |
1,840 |
Date of effect
3. This Determination applies to the 2009-10 income year.
However, this Determination will not apply to taxpayers to the
extent that it conflicts with the terms of a settlement of a
dispute agreed to before the date of issue of this Determination
(see paragraphs 75 and 76 of Taxation Ruling TR 2006/10).
Commissioner of Taxation
23 December 2009
Appendix 1 - Explanation
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This
Appendix is provided as information to help you
understand how the Commissioner's view has been reached.
It does not form part of the binding public ruling. |
Explanation
4. In the context of self assessment, each taxpayer should be
able to demonstrate that the value attributed to goods taken
from stock for private use was fair and reasonable. Taxpayers
should always have regard to their own circumstances when
determining the appropriate value.
5. The Commissioner has previously issued 'Goods Own Use' (GOU)
amounts for a range of industries in recognition of the fact
that in many cases it is difficult for accurate records to be
kept of transactions involving goods taken from stock for
private use. These amounts are estimates of the value of goods
taken from trading stock for private use by taxpayers in named
industries.
6. It is also recognised that greater or lesser values may be
appropriate in particular cases. Taxpayers may be able to
justify a lower value for goods taken from stock than that shown
in the schedule. In that case the lower amount should be used.
Where the value of goods ex-stock would be significantly
greater, the actual amount should be used.
Methodology
Selection of industries
7. Industries suitable for inclusion in the Schedule should:
-
·
-
exhibit a transformation process of
trading stock items (for example baking);
-
·
-
have as trading stock a range of small
items or ingredients, usually of low value;
-
·
-
not be suited to inventory systems; and
-
·
-
have a high turnover of items, often for
cash.
8. The Schedule of Industries is:
|
BAKERY |
|
Butcher |
|
Restaurant/cafe (licensed) |
|
Restaurant/cafe (unlicensed) |
|
Caterer |
|
Delicatessen |
|
Fruiterer/greengrocer |
|
Takeaway food shop |
|
Mixed business (incorporating milk bar,
general store and convenience store) |
Determination of amounts
9. The basis for determining values of goods taken from trading
stock is derived from the latest1 Household
Expenditure Survey (HES) results issued by the Australian Bureau
of Statistics (ABS) adjusted for Consumer Price Index (CPI)
movements for each category of items.2 The
ABS collects at varying intervals detailed information about the
expenditure, income, net worth and other characteristics of
households resident in private dwellings throughout Australia.
Information is collected during personal interviews and from
diaries in which survey participants have recorded all personal
expenditure over a two week period. Interviews and diary-keeping
are spread over the financial year of collection. At the 'fine'
level of expenditure, the survey details household expenditure
in over 700 categories of items across a range of household
composition groups.3 It
is considered that these survey results provide reasonable and
statistically valid estimates as to the community's level of
spending on a wide range of items.
10. Using the HES data, consideration has been given to the fine
level expenditure items and which items would be present in the
trading stock of the Schedule of Industries. The stock items are
generally limited to the HES 'food and non-alcoholic beverage'
broad category, except for Licensed Restaurants/Cafes where
'alcoholic beverage' items are included,4 and
Caterer where some 'household equipment' items are included.
11. The main assumption in calculating GOU amounts is that if a
business has an item in stock then the taxpayer would take the
item from stock for own use rather than purchase the item
elsewhere. However, the GOU amounts represent amounts that the
Commissioner deems acceptable. Where a taxpayer considers the
values provided in the schedule do not reflect their particular
circumstances, they may elect to maintain suitable records5 of
items taken from trading stock for personal use.
Updating the Schedule
12. It is intended to adjust the values annually to reflect
either the most recent HES data or the HES data uplifted for CPI
movements and reissue the Schedule each income year.
Footnotes
[1]
2003-2004.
[2]
This figure is rounded up to the nearest $10 for adults.
[3]
For example, sole person, couple or couple with one dependent.
[4]
For adults but not for children.
[5]
See section 262A of the Income
Tax Assessment Act 1936 and
Taxation Ruling TR 96/7 Income tax: record keeping - section
262A - general principles. Law Administration Practice Statement
PS LA 2004/3 (GA) The valuation of goods taken from trading
stock for private use by sole traders or partners in a
partnership, sets out the approach the Commissioner will accept
for valuing trading stock that is taken for private use by sole
traders or partners in a partnership.
Not previously issued as a draft
References
ATO references:
NO 1-1QYUTUM
ISSN: 1038-8982
Related Rulings/Determinations:
TR 96/7
TR 2006/10
Subject References:
private use
record keeping
trading stock
value of goods taken from stock
Legislative References:
ITAA 1936 262A
TAA 1953
Other References
Law Administration Practice Statement PS LA 2004/3 (GA)
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