Australia Creative Industries Tax Guide

Australian tax rules for the creative industries. The guide covers: the income for the creatives — the 'creative professionals' (the 'artists', the 'musicians', the 'writers', the 'actors', the 'designers', the 'photographers', the 'filmmakers', the 'content creators') earn the 'income' from the 'creative work' (the 'sales of the artworks', the 'performance fees', the 'royalties', the 'licensing fees', the 'commission fees', the 'grants', the 'prize money'); the 'creative income' is the 'assessable income' under the 'Section 6-5 of the ITAA 1997' (the 'ordinary income') — the 'royalties' are the 'assessable income' under the 'Section 15-20 of the ITAA 1997' (the 'royalty income'); the PSI rules for the creatives — the 'creative professionals' who are the 'sole traders' (the 'individuals carrying on the creative business') are subject to the 'PSI rules' (the 'personal services income rules') — the 'PSI rules' may 'limit the deductions' and the 'income allocation' for the 'creatives' who 'personally perform the creative work' (the 'artists' and the 'musicians' who 'perform the services personally'); the 'creative professionals' who 'pass the results test' (the '80/20 results test') can 'avoid the PSI rules' — the 'creatives' who 'supply the creative product' as the 'result' (the 'specific artwork', the 'recording', the 'manuscript') and 'use the own equipment' (the 'studio', the 'instruments', the 'cameras') and 'bear the liability for the defects' may 'pass the results test'; the GST on the creative services — the 'creative professionals' must 'register for the GST' if the 'GST turnover' is $75,000 or more; the 'creative services' (the 'art sales', the 'performance fees', the 'licensing fees', the 'consulting fees') are subject to the 'GST at 10%'; the 'GST-free creative supplies' include: (i) the 'export of the creative work' (the 'sale of the artwork to the overseas buyer' — the 'export of the goods' is 'GST-free'), (ii) the 'GST-free education' (the 'creative courses' and the 'workshops' that are the 'accredited education' may be 'GST-free'); the deductions for the creative professionals — the 'creative professionals' can claim the 'deductions' for the 'expenses incurred in earning the creative income': (i) the 'studio rent', (ii) the 'equipment and the instruments' (the 'cameras', the 'musical instruments', the 'computers', the 'software'), (iii) the 'materials and the supplies' (the 'paints', the 'canvas', the 'film', the 'recording media'), (iv) the 'marketing and the promotion' (the 'website', the 'social media', the 'advertising', the 'portfolio'), (v) the 'travel' (the 'travel to the performances', the 'exhibitions', the 'gallery openings'), (vi) the 'professional development' (the 'courses', the 'workshops', the 'mentoring'), (vii) the 'portfolio insurance', the 'valuation fees', and the 'gallery commission fees'.

Creative Income & GST

Creative income types: The 'art sales', the 'performance fees', the 'royalties', the 'licensing fees', the 'grants', and the 'prize money' are the 'assessable income'.
GST registration: The 'creative professionals' must 'register for the GST' if the 'turnover is $75,000 or more'.
GST-free export: The 'sale of the artwork to the overseas buyer' is 'GST-free' as the 'export of the goods'.

For the PSI rules and the results test, see our Personal Services Income Guide →.

Deductions for Creatives

Studio & equipment: The 'studio rent', the 'equipment', the 'instruments', the 'computers', and the 'software' are 'deductible'.
Materials & marketing: The 'materials', the 'supplies', the 'marketing', and the 'promotion' are 'deductible'.
Travel & development: The 'travel to the performances and the exhibitions' and the 'professional development' are 'deductible'.

For the business expenses and the deductions, see our Business Expenses Guide →.