For artists in Australia unsure about tax and whether or not their art-making is a hobby or a business
​Plus taxation for art collectors
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Contents

• Is your art a hobby or a business? Can you claim expenses against tax?
• Australian Government - tax information and resources
• Other resources about tax for visual artists and arts organisations in Australia - including specialist tax advisers
• ​Tax for Australian Art Collectors

I'm no expert on tax in Australia, however I did have a look at what was available online and provide links to what seems useful below - but I accept no liability at all for whether it is all accurate and/or up to date! 

​However if it's on a government website then it should be!

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Is your art a hobby or a business? Can you claim expenses?
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Whether or not you can claim expenses as business expenses and hence as tax deductions depends on whether or not you are conducting your activities as a hobby or a business

In short - an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

A hobby is a pastime or leisure activity conducted in your spare time for recreation or pleasure
You’re in business, if your activity, as a whole, is commercial with an aim to make a profit.
Business or Hobby | Australian Government

The Australian Government is trialling a new tool to help Artists, Creatives and Makers who are making money to identify information for them about the differences between a hobby or business. 

By answering some simple questions, the tool can tell you:

• whether your creative work looks like a hobby or a business
• what government obligations you have.

REFERENCE

• A Business or a Hobby | Department of Business, Australian Government
  

Did you know?
​You can't claim a deduction for any losses from your creative work if it is a hobby.

It's a myth that there is a dollar threshold to be in a business. Some people can have very expensive hobbies! What matters is whether, as a whole, your activity is commercial with an aim to make a profit. Once you're in business, there are dollar thresholds that can affect your tax obligations.
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A business or a hobby - Help me work it out | Australian government

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Australian Government - Tax Information & Resources

There are a range of information and tax tools online for those wanting to become a sole trader / start a business as an artist or related to the art world.

​It's best to start with the official websites!

It's best to get an ABN for your business. If you don't, other businesses have to withhold 49% from their payments to you. If you're required to register for GST you must get an ABN.

Australian business number (ABN)
​Your ABN is your identifier for certain dealings with us and other government departments and agencies.

Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.

REFERENCE:

• Australian Taxation Office - the first port of call for all matters relating to tax in Australia
• Deductions you can claim - for work-related expenses
• Deductions for specific industries and occupations - does not include provision for visual artists
• Supporting your Small Business | Australian Taxation Office - a range of tools and services to help make it easier for you to get your tax and super right
• Business or company registrations | Australian Taxation Office 
• GST (Goods and Services Tax) | Australian Taxation Office - 

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Other Resources about Tax for Artists in Australia
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REFERENCE:​

• Taxation of professional artists - Arts Law Centre of Australia discusses the differences between hobby income and a proper business
• Tax for Artists | Guildhouse
• Artists Income Tax | National Association for the Visual Arts - discusses practical realities for artists and their lobbying efforts and a relevant test case re tax law for artists
• Call for athletes and artists to be taxed the same | Sydney Morning Herald - highlights the inequitable tax treatment of emerging writers and artists compared to young athletes

In January 2005 the Australian Tax Office (ATO) issued tax ruling TR2005/1 'Income Tax: Carrying on a business as a professional artist'. The ATO issued the ruling to clarify the categorisations of 'professional arts business' and 'hobbyist'. 

Each overseas non-resident performer and sportsperson is subject to Australian income tax, either as an individual or as their corporate entity (the NR)

SPECIALIST TAX ADVISORS

These references are not recommendations as to the quality of service offered (speaking as an ex accountant!).
However, if you need professional advice then it's always worthwhile speaking with a professionally qualified accountant who knows the visual arts field and its activities in the content of current taxation rules.

• Brian Tucker Arts Accounting - a professional accounting practice established to provide quality accounting, auditing and taxation services to the arts, including visual artists, not-for-profit arts organizations, Aboriginal Art Centres, and others
• Arts Specific Provisions - Brian Tucker Arts Accounting - comments on income averaging for artists
• Art Centre Issues | Brian Tucker Arts Accounting - commentary on when GST liability arises
• Michael Fox | Arts Accountant & Valuer - worked with creative professionals across Australia and internationally for over 20 years
• Australian Witholding Tax | Artists Escrow Services - Each overseas non-resident performer and sportsperson is subject to Australian income tax, either as an individual or as their corporate entity (the NR), with respect to income derived from services provided in Australia.

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Tax for Australian Art Collectors
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This is a beginning - and hopefully will grow over time.
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• 5 Tax Tips for Serious Art Collectors | Michael Fox | Arts Accountant & Valuer - discusses tax matters relevant to art collectors
• A 100% Tax Deduction on Art? Wow!! - Art Lovers Australia
  
  

REFERENCE

• Cultural Gifts Program | Australian Taxation Office - To encourage people to donate cultural items to public art galleries, museums, libraries and archives in Australia, the Cultural Gifts Program offers tax incentives to donors.

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HOME

• Art Business Information Index
• Starting Out - Tips
• ​The Best Art Business Books
• Money & Tax
• Tax for Artists

DISCLAIMER

• I'm not a professionally qualified expert in this area.
• However everybody has to start somewhere and the aim of this website is to get you thinking about the right questions to think about and ask if and when you need to get professional advice.
• The links contained on this website are those which could be found by anybody doing extensive research on the Internet. This is your shortcut to the hours it took me to put this site together!

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