There is an interesting discussion running on the AIG Linkedin group currently regarding the professions able to access income averaging in Australia.
Australian tax legislation recognises that certain taxpayers, due to the nature of their work, can make inconsistent levels of income from year to year. In light of this, there is a concessionary tax treatment available that allows for a reduction of the otherwise unreasonable tax rates that would apply in higher income years, in effect smoothing out these income spikes to come to a fair level of tax overall.
The concession comes in the form of special tax rates applied, broadly, to a four year rolling average taxable income. It is available only to certain specified categories of income earners, known as “special professionals”. These are:
- authors (literary, dramatic, musical, but also other artistic works and in some cases computer programmers)
- performing artists, and
- production associates (those who provide artistic support to performing artists).
There has recently been discussion about the extension of income averaging to primary producers, such as farmers and fishermen, whose income is affected by seasonal fluctuations in their employment and returns from primary production. Income averaging is available to primary producers and fishermen in the United States.
Should self-employed geoscientists be able to access these provisions in Australia given the highly variable and cyclical nature of the exploration and mining industry? Is this an issue that AIG should be pursuing on behalf of members, utilising data provided by AIG’s employment surveys?
Have your say by joining the discussion on the AIG Linkedin group.