Foundations of Taxation Law

A taxpayer’s assessable income includes not only amounts that are ordinary income, but also amounts that are ‘statutory income’ (s 6-10(1) ITAA97). Statutory income comprises those amounts that are deemed by the legislation to be assessable income, but are not necessarily income according to ordinary concepts. There are more than 100 statutory income provisions in the ITAA36 and ITAA97. A useful list of these provisions is contained in div 10 ITAA97. A number of other statutory income provisions are discussed in subsequent chapters. In practice, one of the most important statutory income provisions is s 102-5 ITAA97, which renders a ‘net capital gain’ assessable. Like the ordinary income rules, the statutory income provisions operate subject to jurisdictional rules. As with ordinary income, to the extent that statutory income is exempt income or non-assessable non-exempt income, it is excluded from assessable income (ss 6-1, 6-15, 6-20, 6-23 ITAA97). This means, for example, that to the extent that a taxpayer’s statutory income includes GST on a taxable supply, it is not assessable as it constitutes non-assessable non-exempt income by virtue of s 17-5 ITAA97.