The peak body protecting and promoting the Australian visual arts sector

Taxation

Running your practice as a business means being obliged to deal with tax issues. Being on top of these issues from the start can save you from nasty surprises!

Tax Ruling

Carrying on business as a professional artist

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In 2005 the Australian Tax Office (ATO) issued the Public Taxation Ruling: carrying on business as a professional artist (TR 2005/1).

This Ruling provides clearer income tax entitlement guidelines, as to who can be regarded as a professional artist rather than a hobbyist in order to claim their art business expenses against all forms of income, whether from their art practice or any other income source.

ABN

Australian Business Number

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Whether you should have an ABN or not depends on how your practice operates. If you do not have an ABN then you would be considered to be operating your practice as a hobby. When you decide to register for an ABN you are making commitment to operate as a business as opposed to being a ‘hobbyist’. Once you become a business with an ABN you will need to undertake the required paperwork and tax procedures as prescribed by the ATO. You also need to continue to show the ATO that you are operating as a business.

GST

On income

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When you are GST (Goods and Services Tax) registered you must charge GST on all your income and pay this GST directly to the ATO.

The tax implications of artwork sales, grants, and income you receive as an artist are dependent on whether you are an artist in business or a ‘hobbyist’.

If you are in business, have an ABN and are also registered for GST, then GST must be charged and you should issue a Tax Invoice.

If you are in business but aren't GST registered, you should issue an Invoice without a GST component.

Either way you need to quote your ABN on the invoice.

If you do not have an ABN, you need to complete a Statement by a supplier form and attached it to your invoice to explain why you are not quoting an ABN. If you don't do this, 46.5% of the payment will be withheld by the ATO.

If selling artwork through a gallery, they will also deduct their commission plus GST.

The following guides explain GST in more detail.

EOFY

What you can claim

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The End Of Financial Year (EOFY) brings with it the start of tax time – a concept that brings anxiety and confusion to most people, including artists. While it’s tempting to put off doing your tax until just days before the October deadline, it’s a good idea to sort it out well before then as it can take a bit of time to gather everything you need, and well, the sooner you lodge it, the sooner you could receive money back. The following guides outline what and how to claim on your income and expenses.

More Information

Tax

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Below is a glossary of taxation terms you may come across in running your arts practice as a business, and link to NAVA's advocacy and campaign work on tax rights for artists.