Taxation Administration Act 1953

No. 1, 1953 as amended

Compilation start date:   1 July 2013

Includes amendments up to: Act No. 124, 2013

This compilation has been split into 3 volumes

Volume 1: sections 1–18

Volume 2: Schedule

Volume 3: Endnotes

Each volume has its own contents

 

About this compilation

This compilation

This is a compilation of the Taxation Administration Act 1953 as in force on 1 July 2013. It includes any commenced amendment affecting the legislation to that date.

This compilation was prepared on 27 September 2013.

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of each amended provision.

Uncommenced amendments

The effect of uncommenced amendments is not reflected in the text of the compiled law but the text of the amendments is included in the endnotes.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Modifications

If a provision of the compiled law is affected by a modification that is in force, details are included in the endnotes.

Provisions ceasing to have effect

If a provision of the compiled law has expired or otherwise ceased to have effect in accordance with a provision of the law, details are included in the endnotes.

 

 

 

Contents

Schedule 1—Collection and recovery of income tax and other liabilities

Chapter 2—Collection, recovery and administration of income tax

Part 21—Introduction to the Pay as you go (PAYG) system

Division 6—Guide to Parts 25 and 210

61 What Parts 25 and 210 are about

65 The Pay as you go (PAYG) system

610 How the amounts collected are dealt with

Part 25—Pay as you go (PAYG) withholding

Division 10—Guide to Part 25

101 What this Part is about

105 Summary of withholding payments

Division 11—Preliminary matters

111 Object of this Part

115 Constructive payment

Division 12—Payments from which amounts must be withheld

Subdivision 12A—General rules

121 General exceptions

125 What to do if more than one provision requires a withholding

127 Division does not apply to alienated personal services payments

1210 Division does not apply to noncash benefits

1220 Application of Division and regulations to nonshare dividends

Subdivision 12B—Payments for work and services

1235 Payment to employee

1240 Payment to company director

1245 Payment to office holder

1247 Payment to religious practitioners

1250 Return to work payment

1255 Voluntary agreement to withhold

1260 Payment under labour hire arrangement, or specified by regulations

Subdivision 12C—Payments for retirement or because of termination of employment

1280 Superannuation income streams and annuities

1285 Superannuation lump sums and payments for termination of employment

1290 Unused leave payments

Subdivision 12D—Benefit and compensation payments

12110 Social Security or other benefit payment

12115 Commonwealth education or training payment

12120 Compensation, sickness or accident payment

Subdivision 12E—Payments where TFN or ABN not quoted

Payment in respect of investment

12140 Recipient does not quote tax file number

12145 Investor becoming presently entitled to income of a unit trust

12150 Limited application of section 12140 to payment under financial arrangement

12155 When investor may quote ABN as alternative

12160 Investment body unaware that exemption from quoting TFN has stopped applying

12165 Exception for fully franked dividend

12170 Exception for payments below thresholds set by regulations

Payment of income of closely held trust where TFN not quoted

12175 Trustee distributes income of closely held trust

12180 Beneficiary becomes presently entitled to income of closely held trust

12185 Exception for payments below thresholds set by regulations

Payment for a supply

12190 Recipient does not quote ABN

Subdivision 12F—Dividend, interest and royalty payments

Dividends

12210 Dividend payment to overseas person

12215 Dividend payment received for foreign resident

12220 Application to part of a dividend

12225 Application to distribution by a liquidator or other person

Interest

12245 Interest payment to overseas person

12250 Interest payment received for foreign resident

12255 Interest payment derived by lender in carrying on business through overseas permanent establishment

12260 Lender to notify borrower if interest derived through overseas permanent establishment

Royalties

12280 Royalty payment to overseas person

12285 Royalty payment received for foreign resident

General

12300 Limits on amount withheld under this Subdivision

Subdivision 12FA—Departing Australia superannuation payments

12305 Departing Australia superannuation payment

12310 Limits on amount withheld under this Subdivision

Subdivision 12FAA—Excess untaxed rollover amount

12312 Untaxed rollover superannuation benefits

12313 Limits on amount withheld under this Subdivision

Subdivision 12FB—Payments to foreign residents etc.

12315 Payment to foreign resident etc.

12317 Payment received for foreign resident etc.

12319 Exemptions from withholding obligations under this Subdivision

Subdivision 12FC—Seasonal Labour Mobility Program

12319A Payment to employee

Subdivision 12G—Payments in respect of mining on Aboriginal land, and natural resources

Mining on Aboriginal land

12320 Mining payment

Natural resources

12325 Natural resource payment

12330 Payer must ask Commissioner how much to withhold

12335 Commissioner may exempt from section 12330, subject to conditions

Subdivision 12H—Distributions of managed investment trust income

Guide to Subdivision 12H

12375 What this Subdivision is about

Operative provisions

12385 Withholding by managed investment trusts

12390 Withholding by custodians and other entities

12395 Requirement to give notice or make information available

12400 Meaning of managed investment trust

12401 Trusts with wholesale membership

12402 Widelyheld requirements—ordinary case

12402A Widelyheld requirements for registered MIT—special case for entities covered by subsection 12402(3)

12402B Closelyheld restrictions

12403 Licensing requirements for unregistered MIS

12404 MIT participation interest

12405 Meaning of fund payment

12410 Entity to whom payment is made

12415 Failure to give notice or make information available: administrative penalty

12420 Agency rules

12425 Meaning of clean building managed investment trust

12430 Meaning of clean building

Division 13—Alienated personal services payments

131 Object of this Division

135 Payment to the Commissioner in respect of alienated personal services payments

1310 Alienated personal services payments

1315 Personal services payment remitters

1320 Time for payments to Commissioner for alienated personal services payments made during 200001

Division 14—Noncash benefits, and accruing gains, for which amounts must be paid to the Commissioner

Subdivision 14A—Noncash benefits

141 Object of this Subdivision

145 Provider of noncash benefit must pay amount to the Commissioner if payment would be subject to withholding

1410 Dividend, interest or royalty received, for a foreign resident, in the form of a noncash benefit

1415 Payer can recover amount paid to the Commissioner

Subdivision 14B—Accruing gains

1450 Object of this Subdivision

1455 Liability for TFN withholding tax

1460 Investment body may recover TFN withholding tax from investor

1465 Application of rules in Division 18

1475 Overpayment of TFN withholding tax

1485 Other laws do not exempt from TFN withholding tax

Subdivision 14C—Shares and rights under employee share schemes

14155 Liability for TFN withholding tax (ESS)

14160 Employer may give individual tax file numbers to provider

14165 Provider may recover TFN withholding tax (ESS) from individual

14170 Application of rules in Division 18

14175 Overpayment of TFN withholding tax (ESS)

14180 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

Division 15—Working out the amount to withhold

Guide to Division 15

151 What this Division is about

Subdivision 15A—Working out how much to withhold

1510 How much to withhold

1515 Variation of amounts required to be withheld

Subdivision 15B—Withholding schedules and regulations

1525 Commissioner’s power to make withholding schedules

1530 Matters to be considered when making withholding schedules

1535 Regulations about withholding

Subdivision 15C—Declarations

1550 Declarations

Division 16—Payer’s obligations and rights

Guide to Division 16

161 What this Division is about

Subdivision 16A—To withhold

When to withhold

165 When to withhold an amount

1620 Payer discharged from liability to recipient for amount withheld

Penalties for not withholding

1625 Failure to withhold: offence

1630 Failure to withhold: administrative penalty for entity other than exempt Australian government agency

1635 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty

1640 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment

1643 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.

Subdivision 16B—To pay withheld amounts to the Commissioner

When and how to pay amounts to the Commissioner

1670 Entity to pay amounts to Commissioner

1675 When amounts must be paid to Commissioner

1680 Penalty for failure to pay within time

1685 How amounts are to be paid

Who is a large, medium or small withholder

1695 Meaning of large withholder

16100 Meaning of medium withholder

16105 Meaning of small withholder

16110 Commissioner may vary withholder’s status downwards

16115 Commissioner may vary withholder’s status upwards

Subdivision 16BA—To be registered

Registration of withholders

16140 Withholders must be registered

16141 Registration and cancellation

Branch registration

16142 Branches may be registered

16143 Separate amounts for entities and branches

16144 Cancellation of branch registration

16145 Effect on branches of cancelling the entity’s registration

Subdivision 16C—To provide information

To the Commissioner

16150 Commissioner must be notified of amounts

16152 Annual reports—Withholding payments covered by section 12175

16153 Annual reports—other payments

To recipients of withholding payments

16155 Annual payment summary

16156 Annual payment summary for sections 12175 and 12180

16157 Payment summary for Subdivision 12H

16160 Partyear payment summary

16165 Payment summaries for superannuation lump sums and payments for termination of employment

16166 Payment summary for a departing Australia superannuation payment

16167 Payment summary for payment to recipient who does not quote ABN

16170 Form and content of payment summary

16175 Penalty for not providing payment summary

16180 Commissioner may exempt entity from giving payment summary

16182 Definition of reportable employer superannuation contribution

Subdivision 16D—Additional rights and obligations of entity that makes a payment

16195 Payer’s right to recover amounts of penalty: certain withholding taxes

Division 18—Recipient’s entitlements and obligations

Subdivision 18A—Crediting withheld amounts

Guide to Subdivision 18A

181 What this Subdivision is about

General exception

185 No credit for refunded amount

Entitlement to credits: income tax liability

1810 Application of sections 1815, 1820 and 1825

1815 Tax credit for recipient of withholding payments

1820 Tax credit where recipient is a partnership

1825 Tax credit where recipient is a trust

1827 Tax credit for alienated personal services payments

Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program

1830 Credit: dividend, interest or royalty

1832 Credit: amount attributable to fund payment

1833 Credit: Seasonal Labour Mobility Program

1835 Credit: penalty under section 12415, 1630, 1635 or 1640 or related general interest charge

1840 Credit: liability under Part 425

Entitlement to credit: departing Australia superannuation payment

1842 Credit—departing Australia superannuation payment

Entitlement to credit: mining payment

1845 Credit—mining payment

Entitlement to credit: Minerals resource rent tax

1849 Credit—Natural resource payments

Entitlement to credit: Petroleum resource rent tax

1855 Credit—Natural resource payments

Subdivision 18B—Refund of certain withheld amounts

1865 Refund of withheld amounts by the payer to the recipient

1870 Refund of withheld amounts by the Commissioner to the recipient

1880 Refund by Commissioner of amount withheld from payment in respect of investment

Subdivision 18C—Recipient’s obligations

18100 Obligation to keep payment summary

Subdivision 18D—Directors etc. of noncomplying companies

Object of Subdivision

18120 Object of Subdivision

PAYG withholding noncompliance tax

18125 Directors of noncomplying companies

18130 Directors of noncomplying companies—tax reduced in certain circumstances

18135 Associates of directors of noncomplying companies

18140 Notices

18145 When PAYG withholding noncompliance tax must be paid

18150 General interest charge payable on unpaid PAYG withholding noncompliance tax

18155 Validity of decisions and evidence

18160 Rights of indemnity and contribution

Credits for later compliance

18165 Credits for later compliance—scope

18170 Credits for later compliance—Commissioner must give notice in certain circumstances

18175 Credits for later compliance—Commissioner may give notice

18180 Effect of earlier credits

Other provisions

18185 When Commissioner may give notice

18190 Review of decisions

Division 20—Other matters

Subdivision 20B—Offences

2035 Offences

2040 Joining of charges

2045 Offences that would otherwise be committed by a partnership or unincorporated company

Subdivision 20D—Review of decisions

2080 Reviewable decisions

Division 21—Entitlements relating to insolvent ADIs and general insurers

Guide to Division 21

211 What this Division is about

Subdivision 21A—Treatment of some payments by APRA

215 APRA treated like ADI or general insurance company

Part 210—Pay as you go (PAYG) instalments

Division 45—Instalment payments

Guide to Division 45

451 What this Division is about

Subdivision 45A—Basic rules

455 Object of this Part

4510 Application of Part

4515 Liability for instalments

4520 Information to be given to the Commissioner by certain payers

4525 Penalty for failure to notify Commissioner

4530 Credit for instalments payable

Subdivision 45B—When instalments are due

4550 Liability to pay instalments

4560 Meaning of instalment quarter

4561 When quarterly instalments are due—payers of quarterly instalments

4565 Meaning of instalment month

4567 When monthly instalments are due—payers of monthly instalments

4570 When annual instalments are due

4572 Means of payment of instalment

4575 Instalments recoverable in same way as income tax

4580 General interest charge on late payment

4590 Commissioner may withdraw instalment rate

Subdivision 45C—Working out instalment amounts

45110 How to work out amount of quarterly instalment on instalment income basis

45112 Amount of instalment for quarterly payer who pays on basis of GDPadjusted notional tax

45114 How to work out amount of monthly instalment

45115 How to work out amount of annual instalment

45120 Meaning of instalment income

Subdivision 45D—Quarterly payers

45125 Quarterly payer who pays instalments on the basis of instalment income

45130 Quarterly payer who pays on the basis of GDPadjusted notional tax

45132 Quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax

45134 Quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax

Subdivision 45DA—Monthly payers

45136 Monthly payer

45138 Monthly payer requirement

Subdivision 45E—Annual payers

When you start and stop being an annual payer

45140 Choosing to pay annual instalments

45145 Meaning of instalment group

45150 Entity stops being annual payer if involved with GST registration or instalment group

45155 Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly

45160 Head company of a consolidated group stops being annual payer

Subdivision 45F—Varying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income

45200 Application

45205 Choosing a varied instalment rate

45210 Notifying Commissioner of varied instalment rate

45215 Credit on using varied rate in certain cases

Subdivision 45G—General interest charge payable in certain cases if instalments are too low

45225 Effect of Subdivision in relation to monthly payers

45230 Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate

45232 Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax

45233 Reduction in GIC liability under section 45232 if shortfall is made up in later instalment

45235 Liability to GIC on shortfall in annual instalment

45240 Commissioner may remit general interest charge

Subdivision 45H—Partnership income

45260 Instalment income for a period in which you are in a partnership

Subdivision 45I—Trust income included in instalment income of beneficiary

45280 Instalment income for a period in which you are a beneficiary of a trust

45285 Instalment income includes distributions by certain resident unit trusts

45286 Instalment income includes distributions by certain managed investment trusts

45287 When trusts are disqualified due to concentrated ownership

45288 Resident investment trusts for beneficiaries who are absolutely entitled

45290 Exceptions to exclusion of trust capital gains from beneficiary’s instalment income

Subdivision 45J—How Commissioner works out your instalment rate and notional tax

45320 Working out instalment rate

45325 Working out your notional tax

45330 Working out your adjusted taxable income

45335 Working out your adjusted withholding income

45340 Adjusted tax on adjusted taxable income or on adjusted withholding income

Subdivision 45K—How Commissioner works out your benchmark instalment rate and benchmark tax

45355 When Commissioner works out benchmark instalment rate and benchmark tax

45360 How Commissioner works out benchmark instalment rate

45365 Working out your benchmark tax

45370 Working out your adjusted assessed taxable income for the variation year

45375 Adjusted assessed tax on adjusted assessed taxable income

Subdivision 45L—How Commissioner works out amount of quarterly instalment on basis of GDPadjusted notional tax

45400 Working out amount of instalment—payers of 4 quarterly instalments

45402 Working out amount of instalment—payers of 2 quarterly instalments

45405 Working out your GDPadjusted notional tax

Subdivision 45M—How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax

45410 Working out amount of instalment—payers of 4 quarterly instalments

45412 Working out amount of instalment—payers of 2 quarterly instalments

45415 Estimating your benchmark tax

45420 Credit in certain cases where amount of instalment is nil

Subdivision 45N—How this Part applies to the trustee of a trust

Trustees to whom this Part applies

45450 Trustees to whom a single instalment rate is given

45455 Trustees to whom several instalment rates are given

45460 Rest of Subdivision applies only to multirate trustees

45465 Meaning of instalment income

45468 Multirate trustee may pay quarterly instalments

How Commissioner works out instalment rate and notional tax for a multirate trustee

45470 Working out instalment rate

45473 Commissioner must notify you of notional tax

45475 Working out your notional tax

45480 Working out your adjusted taxable income

45483 Meaning of reduced beneficiary’s share and reduced no beneficiary’s share

45485 Working out your adjusted withholding income

How Commissioner works out benchmark instalment rate and benchmark tax for a multirate trustee

45525 When Commissioner works out benchmark instalment rate and benchmark tax

45530 How Commissioner works out benchmark instalment rate

45535 Working out your benchmark tax

Subdivision 45P—Antiavoidance rules

45595 Object of this Subdivision

45597 Effect of Subdivision in relation to instalment months

45600 General interest charge on tax benefit relating to instalments

45605 When do you get a tax benefit from a scheme?

45610 What is your tax position for an income year?

45615 What is your hypothetical tax position for an income year?

45620 Amount on which GIC is payable, and period for which it is payable

45625 Credit if you also got a tax detriment from the scheme

45630 When do you get a tax detriment from a scheme?

45635 No tax benefit or detriment results from choice for which income tax law expressly provides

45640 Commissioner may remit general interest charge in special cases

Subdivision 45Q—General rules for consolidated groups

Guide to Subdivision 45Q

45700 What this Subdivision is about

Application of Subdivision

45703 Effect of this Subdivision and Subdivision 45R in relation to monthly payers

45705 Application of Subdivision to head company

Usual operation of this Part for consolidated group members

45710 Single entity rule

45715 When instalments are due—modification of section 4561

45720 Head company cannot be an annual payer—modification of section 45140

Membership changes

45740 Change of head company

45755 Entry rule (for an entity that becomes a subsidiary member of a consolidated group)

45760 Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)

45775 Commissioner’s power to work out different instalment rate or GDPadjusted notional tax

Subdivision 45R—Special rules for consolidated groups

Guide to Subdivision 45R

45850 What this Subdivision is about

Operative provisions

45855 Section 7011 disregarded for certain purposes

45860 Member having a different instalment period

45865 Credit rule

45870 Head company’s liability to GIC on shortfall in quarterly instalment

45875 Other rules about the general interest charge

45880 Continued application of Subdivision 45Q to the head company of an acquired group

45885 Early application of Subdivision 45Q to the head company of a new group

Subdivision 45S—MEC groups

Guide to Subdivision 45S

45900 What this Subdivision is about

Preliminary 

45905 Objects of Subdivision

General modification rules

45910 Extended operation of Part to cover MEC groups

Extended operation of Subdivision 45Q

45913 Sections 45705 and 45740 do not apply to members of MEC groups

45915 Application of Subdivision 45Q to provisional head company

45917 Assumption for applying section 45710 (single entity rule)

45920 Change of provisional head company

45922 Life insurance company

Extended operation of Subdivision 45R

45925 Additional modifications of sections 45855 and 45860

45930 Modifications of sections 45865 and 45870 and a related provision

45935 Additional modifications of section 45885

Part 230—Collecting Medicare levy with income tax

Division 90Medicare levy and Medicare levy surcharge

Subdivision 90A—Treatment like income tax

901 Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax

Part 235—Excess concessional contributions

Division 95—Excess concessional contributions charge

Guide to Division 95

951 What this Division is about

Subdivision 95A—Object of Division

955 Object of Division

Subdivision 95B—Excess concessional contributions charge

9510 Liability to excess concessional contributions charge

9515 Amount of excess concessional contributions charge

9520 When excess concessional contributions charge is due and payable

9525 General interest charge

Division 96—Releasing money from superannuation

Subdivision 96A—Releasing money from superannuation

Guide to Subdivision 96A

961 What this Subdivision is about

Requesting a release authority

965 Electing to release money from superannuation

Issuing a release authority to superannuation provider

9610 Issuing a release authority to a superannuation provider

9615 Varying and revoking a release authority

Complying with a release authority

9620 Obligations of superannuation providers

9625 Voluntary compliance with a release authority relating to voluntary release interests

9630 Meaning of maximum available release amount

9635 Notifying Commissioner

9640 Notifying individual of unsuccessful release attempt

9645 Compensation for acquisition of property

Consequences of releasing amounts

9650 Entitlement to credits

9655 Interest for late payments of money received by the Commissioner in accordance with release authority

9660 Income tax treatment of amounts released—proportioning rule does not apply

Division 97—Excess concessional contributions determinations

Subdivision 97A—Excess concessional contributions determinations

Guide to Subdivision 97A

971 What this Subdivision is about

Operative provisions

975 Determination of excess concessional contributions and charge

9710 Review

Chapter 3—Collection, recovery and administration of other taxes

Part 310—Indirect taxes

Division 105—General rules for indirect taxes

Guide to Division 105

1051 What this Division is about

Subdivision 105A—Assessments

1053 Application of Subdivision

1055 Commissioner may make assessment of indirect tax

10510 Request for assessment

10515 Indirect tax liabilities do not depend on assessment

10520 Commissioner must give notice of the assessment

10525 Amendment of assessment

10530 Later assessment prevails in case of inconsistency

Subdivision 105B—Review of indirect tax decisions

10540 Reviewable indirect tax decisions

Subdivision 105C—Limits on credits, refunds and recovering amounts

10550 Time limit on recovery by the Commissioner

10555 Time limit on refunds etc. from the Commissioner

10565 Restriction on GST refunds

Subdivision 105D—General interest charge and penalties

10580 General interest charge

10585 Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent

Subdivision 105F—Indirect tax refund schemes

105120 Refund scheme—defence related international obligations

105125 Refund scheme—international obligations

Subdivision 105G—Other administrative provisions

105140 Address for service

105145 Commissioner must give things in writing

Division 110—Goods and services tax

Guide to Division 110

1101 What this Division is about

Subdivision 110F—Review of GST decisions

11050 Reviewable GST decisions

Division 111—Wine tax and luxury car tax

Guide to Division 111

1111 What this Division is about

Subdivision 111C—Review of wine tax decisions

11150 Reviewable wine tax decisions

Subdivision 111D—Effect on contracts from amendments to laws

11160 Alteration of contracts if cost of complying with agreement is affected by later alteration to wine tax or luxury car tax laws

Division 112—Fuel tax

Guide to Division 112

1121 What this Division is about

Subdivision 112E—Review of fuel tax decisions

11250 Reviewable fuel tax decisions

Part 315—Minerals Resource Rent Tax

Division 115—Instalments

Guide to Division 115

1151 What this Division is about

Subdivision 115A—Preliminary

1155 Objects of this Division

Subdivision 115B—Liability for instalments

11510 Liability for instalments

11515 Information to be given to the Commissioner

11520 Credit for instalments payable

11525 When instalments are due

11530 General interest charge on late payment

Subdivision 115C—Working out instalment amounts

11535 How to work out the amount of an instalment

11540 Meaning of instalment income

11545 Meaning of applicable instalment rate

Subdivision 115D—Instalment rate chosen by you

Choosing an instalment rate

11550 Choosing a varied instalment rate

11555 Notifying Commissioner of varied instalment rate

Variation credits

11560 Credit on using varied rate in certain cases

General interest charge payable in certain cases if instalments are too low

11565 Liability to GIC on shortfall in instalments worked out on the basis of varied rate

11570 Working out your benchmark instalment rate

Subdivision 115E—Instalment rate given to you by Commissioner

11575 Commissioner instalment rate for MRRT

11580 Commissioner may take changes, and proposed changes, to the law into account

Subdivision 115F—Default instalment rate

11585 Default instalment rate

Subdivision 115G—Special rules for project interests that are transferred or split

11590 Effect of transfer or split of project interest on instalment income

11595 Additional instalment income for new miner or new explorer

115100 Credit for original miner or original explorer for instalment quarters before transfer or split

115105 Adjusted instalment income for original miners or explorers

Subdivision 115H—Special rules for transitional accounting periods

115110 Instalment quarters in transitional accounting periods

Division 117—MRRT returns and starting base returns

Guide to Division 117

1171 What this Division is about

Operative provisions

1175 Who must give MRRT returns

11710 The form and contents of MRRT returns

11715 Additional MRRT returns

11720 Starting base returns

11725 Electronic lodgement of MRRT returns and starting base returns

11730 MRRT returns and starting base returns treated as being duly made

Division 119—Making choices

Guide to Division 119

1191 What this Division is about

Operative provisions

1195 Making choices

11910 Choices are irrevocable

11915 Division subject to more specific rules

Division 121—Reporting

Guide to Division 121

1211 What this Division is about

Operative provisions

1215 Object of this Division

12110 Information notice for transfers and splits of mining and premining project interests

12112 Notice of rehabilitation expenditure

12115 Substantiation requirement

Division 123—Record keeping

Guide to Division 123

1231 What this Division is about

Operative provisions

1235 What records you must keep

12310 Retaining records

12315 Offence for failing to keep or retain records

Division 125—Miscellaneous

1251 Address for service

Part 320—Sustaining the superannuation contribution concession

Division 133—Deferred payment

Guide to Division 133

1331 What this Division is about

Subdivision 133A—Deferral determination

Guide to Subdivision 133A

1335 What this Subdivision is about

Operative provisions

13310 Determination of tax that is deferred to a debt account

13315 Defined benefit tax

13320 How to attribute the defined benefit tax to defined benefit interests

13325 Determination reducing tax deferred to a debt account

13330 General provisions applying to determinations under this Subdivision

Subdivision 133B—Debt account

Guide to Subdivision 133B

13355 What this Subdivision is about

Operative provisions

13360 Debt account to be kept for deferred tax

13365 Interest on debt account balance

13370 Voluntary payments

13375 Commissioner must notify superannuation provider of debt account

Subdivision 133C—Compulsory payment

Guide to Subdivision 133C

133100 What this Subdivision is about

Debt account discharge liability

133105 Liability to pay debt account discharge liability

133110 When debt account discharge liability must be paid

133115 General interest charge

133120 Meaning of debt account discharge liability

133125 Notice of debt account discharge liability

End benefit 

133130 Meaning of end benefit

133135 End benefit notice—individual

133140 End benefit notice—superannuation provider

133145 End benefit notice—material changes or omissions

Division 135—Releasing money from superannuation

Guide to Division 135

1351 What this Division is about

Subdivision 135A—When the Commissioner must issue a release authority

Guide to Subdivision 135A

1355 What this Subdivision is about

Operative provisions

13510 Release authorities

Subdivision 135B—When a release authority can be given to a superannuation provider

Guide to Subdivision 135B

13535 What this Subdivision is about

Operative provisions

13540 When you may give release authority to superannuation provider

13545 When Commissioner may give release authority to superannuation provider

Subdivision 135C—Release of superannuation money under a release authority

Guide to Subdivision 135C

13570 What this Subdivision is about

Operative provisions

13575 Requirement for superannuation provider to release money

13580 Compensation for acquisition of property

13585 Release amount

13590 How the Commissioner applies amounts received under a release authority

13595 Defined benefit interests—releasing amounts to pay debt account discharge liability

135100 Income tax treatment of amounts released—proportioning rule does not apply

Chapter 4—Generic assessment, collection and recovery rules

Part 41—Returns and assessments

Division 155—Assessments

Guide to Division 155

1551 What this Division is about

Subdivision 155A—Making assessments

1555 Commissioner may make assessment

15510 Commissioner must give notice of assessment

15515 Selfassessment

15520 Assessment of indirect tax on importations and customs dealing

15525 Special assessment

15530 Delays in making assessments

Subdivision 155B—Amending assessments

When Commissioner may amend assessments

15535 Amendment during period of review

15540 Amendment during period of review—certain applications taken to be notices

15545 Amendment on application

15550 Amendment to give effect to private ruling

15555 Amendment to give effect to certain antiavoidance declarations or determinations

15557 Amendment to give effect to MRRT antiprofit shifting rules

15560 Amendment because of review, objection or fraud

Special rules about amending amended assessments

15565 Amending amended assessments

15570 Refreshed period of review

General rules 

15575 Refunds of amounts overpaid

15580 Amended assessments are assessments

Subdivision 155C—Validity and review of assessments

15585 Validity of assessment

15590 Review of assessments

Subdivision 155D—Miscellaneous

15595 Entities

Part 415—Collection and recovery of taxrelated liabilities and other amounts

Division 250—Introduction

Subdivision 250A—Guide to Part 415

2501 What this Part is about

2505 Some important concepts about taxrelated liabilities

25010 Summary of taxrelated liabilities

Subdivision 250B—Object of this Part

25025 Object

Division 255—General rules about collection and recovery

Subdivision 255A—Taxrelated liabilities

2551 Meaning of taxrelated liability

2555 Recovering a taxrelated liability that is due and payable

Subdivision 255B—Commissioner’s power to vary payment time

25510 To defer the payment time

25515 To permit payments by instalments

25520 To bring forward the payment time in certain cases

Subdivision 255C—Recovery proceedings

Guide to Subdivision 255C

25535 What this Subdivision is about

Operative provisions

25540 Service of documents if person absent from Australia or cannot be found

25545 Evidentiary certificate

25550 Certain statements or averments

25555 Evidence by affidavit

Subdivision 255D—Security deposits

255100 Commissioner may require security deposit

255105 Notice of requirement to give security

255110 Offence

Division 260—Special rules about collection and recovery

Guide to Division 260

2601 What this Division is about

Subdivision 260A—From third party

2605 Commissioner may collect amounts from third party

26010 Notice to Commonwealth, State or Territory

26015 Indemnity

26020 Offence

Subdivision 260B—From liquidator

26040 Subdivision does not apply to superannuation guarantee charge

26045 Liquidator’s obligation

26050 Offence

26055 Joint liability of 2 or more liquidators

26060 Liquidator’s other obligation or liability

Subdivision 260C—From receiver

26075 Receiver’s obligation

26080 Offence

26085 Joint liability of 2 or more receivers

26090 Receiver’s other obligation or liability

Subdivision 260D—From agent winding up business for foreign resident principal

260105 Obligation of agent winding up business for foreign resident principal

260110 Offence

260115 Joint liability of 2 or more agents

260120 Agent’s other obligation or liability

Subdivision 260E—From deceased person’s estate

260140 Administered estate

260145 Unadministered estate

260150 Commissioner may authorise amount to be recovered

Division 263—Mutual assistance in collection of foreign tax debts

Subdivision 263A—Foreign revenue claims

Guide to Subdivision 263A

2635 What this Subdivision is about

Operative provisions

26310 Meaning of foreign revenue claim

26315 Requirements for foreign revenue claims

26320 Foreign Revenue Claims Register

26325 Registering claims

26330 When amount is due and payable

26335 Amending the Register etc.

26340 Payment to competent authority

Division 265—Other matters

Subdivision 265A—Right of person to seek recovery or contribution

Guide to Subdivision 265A

26535 What this Subdivision is about

Operative provisions

26540 Right of recovery if another person is liable

26545 Right of contribution if persons are jointly liable

Subdivision 265B—Application of laws

26565 Nonapplication of certain taxation laws

Division 268—Estimates and recovery of PAYG withholding liabilities and superannuation guarantee charge

Guide to Division 268

2681 What this Division is about

Subdivision 268A—Object

2685 Object of Division

Subdivision 268B—Making estimates

26810 Commissioner may make estimate

26815 Notice of estimate

Subdivision 268C—Liability to pay estimates

26820 Nature of liability to pay estimate

26825 Accuracy of estimate irrelevant to liability to pay

26830 Estimate provable in bankruptcy or winding up

Subdivision 268D—Reducing and revoking estimates

26835 How estimate may be reduced or revoked—Commissioner’s powers

26840 How estimate may be reduced or revoked—statutory declaration or affidavit

26845 How estimate may be reduced or revoked—rejection of proof of debt

26850 How estimate may be reduced—amount paid or applied

26855 When reduction or revocation takes effect

26860 Consequences of reduction or revocation—refund

26865 Consequences of reduction or revocation—statutory demand changed or set aside

26870 Consequences of reduction or revocation—underlying liability

Subdivision 268E—Late payment of estimates

26875 Liability to pay the general interest charge

26880 Effect of paying the general interest charge

Subdivision 268F—Miscellaneous

26885 Effect of judgment on liability on which it is based

26890 Requirements for statutory declaration or affidavit

26895 Liquidators, receivers and trustees in bankruptcy

268100 Division not to limit or exclude Corporations or Bankruptcy Act

Division 269—Penalties for directors of noncomplying companies

Guide to Division 269

2691 What this Division is about

Subdivision 269A—Object and scope

2695 Object of Division

26910 Scope of Division

Subdivision 269B—Obligations and penalties

26915 Directors’ obligations

26920 Penalty

26925 Notice

26930 Effect on penalty of directors’ obligation ending before end of notice period

26935 Defences

Subdivision 269C—Discharging liabilities

26940 Effect of director paying penalty or company discharging liability

26945 Directors’ rights of indemnity and contribution

Subdivision 269D—Miscellaneous

26950 How notice may be given

26952 Copies of notices

26955 Division not to limit or exclude Corporations Act

Part 425—Charges and penalties

Division 280—Shortfall interest charge

Guide to Division 280

2801 Guide to Division 280

Subdivision 280A—Object of Division

28050 Object of Division

Subdivision 280B—Shortfall interest charge

280100 Liability to shortfall interest charge—income tax

280101 Liability to shortfall interest charge—minerals resource rent tax

280102 Liability to shortfall interest charge—petroleum resource rent tax

280102A Liability to shortfall interest charge—excess nonconcessional contributions tax

280102B Liability to shortfall interest charge—Division 293 tax

280103 Liability to shortfall interest charge—general

280105 Amount of shortfall interest charge

280110 Notification by Commissioner

Subdivision 280C—Remitting shortfall interest charge

280160 Remitting shortfall interest charge

280165 Commissioner must give reasons for not remitting in certain cases

280170 Objecting against remission decision

Division 284—Administrative penalties for statements, unarguable positions and schemes

Guide to Division 284

2845 What this Division is about

Subdivision 284A—General provisions

28410 Object of Division

28415 When a matter is reasonably arguable

28420 Which statements this Division applies to

28425 Statements by agents

28430 Application of Division to trusts

28435 Application of Division to partnerships

Subdivision 284B—Penalties relating to statements

Guide to Subdivision 284B

28470 What this Subdivision is about

Operative provisions

28475 Liability to penalty

28480 Shortfall amounts

28485 Amount of penalty

28490 Base penalty amount

28495 Joint and several liability of directors of corporate trustee that makes a false or misleading statement

Subdivision 284C—Penalties relating to schemes

Guide to Subdivision 284C

284140 What this Subdivision is about

Operative provisions

284145 Liability to penalty

284150 Scheme benefits and scheme shortfall amounts

284155 Amount of penalty

284160 Base penalty amount: schemes

284165 Exception—threshold for penalty arising from crossborder transfer pricing

Subdivision 284D—Provisions common to Subdivisions 284B and 284C

284220 Increase in base penalty amount

284224 Reduction of base penalty amount if law was applied in an accepted way

284225 Reduction of base penalty amount if you voluntarily tell the Commissioner

Subdivision 284E—Special rules about unarguable positions for crossborder transfer pricing

284250 Undocumented transfer pricing treatment not reasonably arguable

284255 Documentation requirements

Division 286—Penalties for failing to lodge documents on time

Subdivision 286A—Guide to Division 286

2861 What this Division is about

Subdivision 286B—Object of Division

28625 Object of Division

Subdivision 286C—Penalties for failing to lodge documents on time

28675 Liability to penalty

28680 Amount of penalty

Division 288—Miscellaneous administrative penalties

28810 Penalty for nonelectronic notification

28820 Penalty for nonelectronic payment

28825 Penalty for failure to keep or retain records

28830 Penalty for failure to retain or produce declarations

28835 Penalty for preventing access etc.

28840 Penalty for failing to register or cancel registration

28845 Penalty for failing to issue tax invoice etc.

28850 Penalty for both principal and agent issuing certain documents

28870 Administrative penalties for life insurance companies

28875 Administrative penalty for a copyright or resale royalty collecting society

28880 Administrative penalty for over declaring conduit foreign income

28890 Failing to give release authority for excess nonconcessional contributions tax

28895 Failing to comply etc. with release authority

288100 Excess money paid under release authority

288105 Superannuation provider to calculate crystallised preJuly 83 amount of superannuation interest by 30 June 2008

288110 Contravention of superannuation data and payment regulation or standard

Division 290—Promotion and implementation of schemes

Subdivision 290A—Preliminary

2905 Objects of this Division

29010 Extraterritorial application

Subdivision 290B—Civil penalties

29050 Civil penalties

29055 Exceptions

29060 Meaning of promoter

29065 Meaning of tax exploitation scheme

Subdivision 290C—Injunctions

290120 Conduct to which this Subdivision applies

290125 Injunctions

290130 Interim injunctions

290135 Delay in making ruling

290140 Discharge etc. of injunctions

290145 Certain limits on granting injunctions not to apply

290150 Other powers of the Federal Court unaffected

Subdivision 290D—Voluntary undertakings

290200 Voluntary undertakings

Division 298—Machinery provisions for penalties

Subdivision 298A—Administrative penalties

2985 Scope of Subdivision

29810 Notification of liability

29815 Due date for penalty

29820 Remission of penalty

29825 General interest charge on unpaid penalty

29830 Assessment of penalties under Division 284

Subdivision 298B—Civil penalties

29880 Application of Subdivision

29885 Civil evidence and procedure rules for civil penalty orders

29890 Civil proceedings after criminal proceedings

29895 Criminal proceedings during civil proceedings

298100 Criminal proceedings after civil proceedings

298105 Evidence given in proceedings for penalty not admissible in criminal proceedings

298110 Civil double jeopardy

Part 450—Release from particular liabilities

Division 340Commissioner’s power in cases of hardship

Guide to Division 340

3401 What this Division is about

Operative provisions

3405 Release from particular liabilities in cases of serious hardship

34010 Liabilities to which this section applies

34015 Commissioner may take action to give effect to a release decision

34020 Extinguishing your liability to pay a fringe benefits tax instalment if you are released

34025 Extinguishing your liability to pay a PAYG instalment if you are released

Division 342Commissioner’s power relating to proceeds of crime proceedings

Guide to Division 342

3421 What this Division is about

Subdivision 342A—Power to waive right to payment of taxrelated liabilities

3425 Object of this Subdivision

34210 Power to waive right to payment of taxrelated liability

Part 490—Evidence

Division 350—Evidence

Guide to Division 350

3501 What this Division is about

Subdivision 350A—Evidence

3505 Application of Subdivision

35010 Evidence

35015 Judicial notice of signature

Chapter 5—Administration

Part 51—The Australian Taxation Office

Division 352—Accountability of the Commissioner

Guide to Division 352

3521 What this Division is about

Subdivision 352A—Accountability of the Commissioner in respect of indirect tax laws

3525 Commissioner must prepare annual report on indirect tax laws

Subdivision 352B—Accountability of the Commissioner in respect of MRRT law

35210 Commissioner must prepare annual report on MRRT law

Division 353—Powers to obtain information and evidence

35310 Commissioner’s power

35315 Access to premises for the purposes of the indirect tax laws, the MRRT law and the Division 293 tax law

35317 Offshore information notices

35320 Checking status of specifically listed deductible gift recipients

Division 355—Confidentiality of taxpayer information

Guide to Division 355

3551 What this Division is about

Subdivision 355A—Objects and application of Division

35510 Objects of Division

35515 Application of Division

Subdivision 355B—Disclosure of protected information by taxation officers

Guide to Subdivision 355B

35520 What this Subdivision is about

Operative provisions

35525 Offence—disclosure of protected information by taxation officers

35530 Meaning of protected information and taxation officer

35535 Consent is not a defence

35540 Generality of Subdivision not limited

35545 Exception—disclosure of publicly available information

35547 Exception—disclosure of periodic aggregate tax information

35550 Exception—disclosure in performing duties

35555 Exception—disclosure to Ministers

35560 Limits on disclosure to Ministers

35565 Exception—disclosure for other government purposes

35570 Exception—disclosure for law enforcement and related purposes

35575 Limits on disclosure to courts and tribunals

Subdivision 355C—Ondisclosure of protected information by other people

Guide to Subdivision 355C

355150 What this Subdivision is about

Operative provisions

355155 Offence—ondisclosure of protected information by other people

355160 Consent is not a defence

355165 Generality of Subdivision not limited

355170 Exception—ondisclosure of publicly available information

355172 Exception—disclosure of periodic aggregate tax information

355175 Exception—ondisclosure for original purpose

355180 Exception—ondisclosure to Ministers in relation to statutory powers or functions

355185 Exception—ondisclosure in relation to IGIS

355190 Exception—ondisclosure in relation to ASIO

355195 Exception—ondisclosure by Royal Commissions

355200 Exception—records made in compliance with Australian laws

355205 Limits on ondisclosure to courts or tribunals

355210 Limits on ondisclosure to Ministers

Subdivision 355D—Disclosure of protected information that has been unlawfully acquired

Guide to Subdivision 355D

355260 What this Subdivision is about

Operative provisions

355265 Offence—disclosure of protected information acquired in breach of a taxation law

355270 Exception—disclosure of publicly available information

355275 Exception—disclosure in relation to a taxation law

355280 Limits on disclosure to courts and tribunals

Subdivision 355E—Other matters

Guide to Subdivision 355E

355320 What this Subdivision is about

Operative provisions

355325 Oath or affirmation to protect information

355330 Injunctions to prevent contravention of nondisclosure provisions

355335 Procedures for disclosing protected information

Division 356—General administration of tax laws

Guide to Division 356

3561 What this Division is about

Subdivision 356A—Indirect tax laws

3565 Commissioner has general administration of indirect tax laws

Part 55—Rulings

Division 357—Object and common rules

Guide to Division 357

3571 What this Division is about

Subdivision 357A—Object of this Part

3575 Object of this Part

Subdivision 357B—Common rules for rulings

Rules for all rulings

35750 Scope of Division

35755 The provisions that are relevant for rulings

35760 When rulings are binding on the Commissioner

35765 Stopping relying on a ruling

35770 Commissioner may apply the law if more favourable than the ruling

35775 Inconsistent rulings

35780 Contracts for schemes

35785 Effect on ruling if relevant provision reenacted

35790 Validity of ruling not affected by formal defect

Common rules for public and private rulings

35795 Electronic communications

357100 Evidence

Common rules for private and oral rulings

357105 Further information must be sought

357110 Assumptions in making private or oral ruling

357115 Additional information provided by applicant

357120 Commissioner may take into account information from third parties

357125 Applications and objections not to affect obligations and powers

Division 358—Public rulings

Guide to Division 358

3581 What this Division is about

Making public rulings

3585 What is a public ruling?

35810 Application of public rulings

35815 When a public ruling ceases to apply

Withdrawing public rulings

35820 Withdrawing public rulings

Division 359—Private rulings

Guide to Division 359

3591 What this Division is about

Private rulings 

3595 Private rulings

35910 Applying for a private ruling

35915 Private rulings to be given to applicants

35920 Private rulings must contain certain details

35925 Time of application of private rulings

35930 Ruling for trustee of a trust

35935 Dealing with applications

35940 Valuations

35945 Related rulings

35950 Delays in making private rulings

35955 Revised private rulings

35960 Objections, reviews and appeals relating to private rulings

35965 Commissioner may consider new information on objection

35970 Successful objection decision alters ruling

Division 360—Oral rulings

Guide to Division 360

3601 What this Division is about

Oral rulings 

3605 Applying for and making of oral rulings

36010 Withdrawing an application for an oral ruling

36015 Commissioner determinations

Division 361—Nonruling advice and general administrative practice

3615 Nonruling advice and general administrative practice

Part 525—Recordkeeping and other obligations of taxpayers

Division 382—Recordkeeping

Guide to Division 382

3821 What this Division is about

Subdivision 382A—Keeping records of indirect tax transactions

3825 Keeping records of indirect tax transactions

Subdivision 382B—Record keeping obligations of deductible gift recipients

38215 Deductible gift recipients to keep records

Division 388—Requirements about giving material to the Commissioner

Subdivision 388A—Object of Division

3885 Object of Division

Subdivision 388B—General provisions

38850 Approved forms

38852 Saturdays, Sundays and public holidays

38855 Commissioner may defer time for lodgment

38860 Declaration by entity

38865 Declaration by entity where agent gives document

38870 Declaration by agent

38875 Signing declarations

38880 Electronic notification of BAS amounts

38885 Truncating amounts

Division 390Superannuation reporting

Guide to Division 390

3901 What this Division is about

Subdivision 390A—Member information statements and rollover superannuation benefit statements

3905 Member information statements

39010 Statements about rollover superannuation benefits etc.

39012 Statements about benefits paid to KiwiSaver schemes

39015 Superannuation statements to members

Subdivision 390B—Statements relating to release authorities

39065 Statements relating to release authorities

Subdivision 390C—Other statements

390115 Change or omission in information given to the Commissioner

Division 391—First home saver account reporting

Guide to Division 391

3911 What this Division is about

Subdivision 391A—Account activity statements

3915 FHSA account activity statements

Subdivision 391B—Transfer statements

39110 Statements about transfer payments between FHSAs etc.

Division 392—Employee share scheme reporting

Guide to Division 392

3921 What this Division is about

Subdivision 392A—Statements

3925 Statements by providers

39210 Change or omission in information given to the Commissioner

Subdivision 392B—Miscellaneous

39215 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

Division 394Reporting about forestry managed investment schemes

Guide to Division 394

3941 What this Division is about

3945 Statements about initial contributions to scheme

39410 Statements about failure to establish trees within 18 months

Division 398—Miscellaneous reporting obligations

Guide to Division 398

3981 What this Division is about

Subdivision 398A—Farm Management Deposit reporting

3985 Reporting to Agriculture Department

Part 530—Payment, ABN and identification verification system

Division 400—Guide to Part 530

4001 What Part 530 is about

4005 The payment, ABN and identification verification system

Division 405—Transaction reporting by purchasers

4055 Payments to which this Division applies

40510 Reporting requirements

40515 Invoices produced by purchasers

Division 410—Transaction reporting by suppliers

4105 Payments to which this Division applies

41010 Reporting requirements

41015 Invoices produced by purchasers

Division 415—Verification of suppliers’ ABNs by purchasers

4155 Payments to which this Division applies

41510 ABN verification requirements

41515 Method of obtaining ABN verification

41520 Verification applies to later payments

Division 417—Verification of suppliers’ identities by purchasers

4175 Payments to which this Division applies

41710 Identity verification requirements

41715 Method of obtaining identity verification

41720 Verification applies to later payments

Division 420—Penalties for not reporting or verifying

4205 Failing to report or verify: administrative penalty

Division 425—Other matters

42520 Constructive payment

42525 Noncash benefits

Part 535—Registration and similar processes for various taxes

Division 426—Process of endorsing charities and other entities

Guide to Division 426

4261 What this Division is about

Subdivision 426A—Application of Subdivision 426B to various kinds of endorsement

4265 Application of Subdivision 426B to various kinds of endorsement

42610 How Subdivision 426B applies to government entities in relation to endorsement under section 30120 of the Income Tax Assessment Act 1997

Subdivision 426B—Process of endorsement etc.

42615 Applying for endorsement

42620 Dealing with an application for endorsement

42625 Notifying outcome of application for endorsement

42630 Date of effect of endorsement

42635 Review of refusal of endorsement

42640 Checking entitlement to endorsement

42645 Telling Commissioner of loss of entitlement to endorsement

42650 Partnerships and unincorporated bodies

42655 Revoking endorsement

42660 Review of revocation of endorsement

Subdivision 426C—Entries on Australian Business Register

42665 Entries on Australian Business Register

Subdivision 426D—Public and private ancillary funds

Guide to Subdivision 426D

426100 What this Subdivision is about

Public ancillary funds

426102 Public ancillary funds

426103 Public ancillary fund guidelines

426104 Australian Business Register must show public ancillary fund status

Private ancillary funds

426105 Private ancillary funds

426110 Private ancillary fund guidelines

426115 Australian Business Register must show private ancillary fund status

Administrative penalties

426120 Administrative penalties for trustees of ancillary funds

Suspension and removal of trustees

426125 Suspension or removal of trustees

426130 Commissioner to appoint acting trustee in cases of suspension or removal

426135 Terms and conditions of appointment of acting trustee

426140 Termination of appointment of acting trustee

426145 Resignation of acting trustee

426150 Property vesting orders

426155 Powers of acting trustee

426160 Commissioner may give directions to acting trustee

426165 Property vested in acting trustee—former trustees’ obligations relating to books, identification of property and transfer of property

Transfers between ancillary funds

426170 Ancillary funds must not provide funds to other ancillary funds

Part 545—Application of taxation laws to certain entities

Division 444—Obligations of entities on behalf of other entities

Guide to Division 444

4441 What this Division is about

Subdivision 444A—Unincorporated associations and bodies and companies

4445 Unincorporated associations and bodies

44410 Public officers of companies

44415 Notifying and serving companies

Subdivision 444B—Partnerships

44430 Partnerships

Subdivision 444C—Superannuation funds

44450 Superannuation funds

Subdivision 444D—Incapacitated entities

44470 Representatives of incapacitated entities

Subdivision 444E—Indirect tax specific entities

44480 GST joint ventures

44485 Nonprofit subentities

44490 GST groups

Subdivision 444F—Trusts

444120 Trusts

Division 446—Local governing bodies

Guide to Division

4461 What this Division is about

Operative provisions

4465 Requirements for unanimous resolutions by local governing bodies

Part 5100—Miscellaneous

Division 850—Transactions exempt from application of taxation laws

Subdivision 850A—Declaration relating to security or intelligence agency

850100 Declaration relating to security or intelligence agency

Schedule 1Collection and recovery of income tax and other liabilities

Note: See section 3AA.

Chapter 2Collection, recovery and administration of income tax

Part 21Introduction to the Pay as you go (PAYG) system

Division 6Guide to Parts 25 and 210

61  What Parts 25 and 210 are about

To help taxpayers meet their annual income tax liability, they are required to pay amounts of their income at regular intervals as it is earned during the year. The system for collecting these amounts is called “Pay as you go”.

Amounts collected under this system also go towards meeting liability for Medicare levy, liability to repay contributions under the Higher Education Contribution Scheme (HECS), liability to repay debts under the Higher Education Loan Program (HELP) and liability to repay financial supplement debts under the Student Financial Supplement Scheme (SFSS).

Table of sections

65 The Pay as you go (PAYG) system

610 How the amounts collected are dealt with

65  The Pay as you go (PAYG) system

 (1) Parts 25 and 210 establish the PAYG system, which has 2 components:

  PAYG withholding (Part 25)

  PAYG instalments (Part 210).

PAYG withholding

 (2) Under PAYG withholding, amounts are collected in respect of particular kinds of payments or transactions. Usually, someone who makes a payment to you is required to withhold an amount from the payment, and then to pay the amount to the Commissioner.

For a list of the payments and other transactions to which
PAYG withholding applies, see Division 10

PAYG instalments

 (3) You pay PAYG instalments directly to the Commissioner. These are usually based on your GDPadjusted notional tax or your ordinary income for a past period, but excluding:

  income subject to PAYG withholding (with certain exceptions)

  exempt income, or income that is otherwise not assessable.

An instalment is usually paid after a quarter, but some taxpayers are eligible to pay an annual instalment after the end of the income year.

610  How the amounts collected are dealt with

  You are entitled to credits for the amounts of your income that are collected under the PAYG system. The credits are applied under Division 3 of Part IIB against your tax debts, and any excess is refunded to you.

Part 25Pay as you go (PAYG) withholding

Division 10Guide to Part 25

101  What this Part is about

Under PAYG withholding, amounts are collected in respect of particular kinds of payments or transactions. Usually, someone who makes a payment to you is required to withhold an amount from the payment, and then to pay the amount to the Commissioner. If the payment is personal services income that is included in the assessable income of someone else under Division 86 of the Income Tax Assessment Act 1997, the payer must pay such an amount to the Commissioner at a later date.

If a noncash benefit is provided instead of a payment, the provider must first pay to the Commissioner the amount that would have been withheld from the payment.

This Part also contains provisions about the obligations and rights of payers and recipients.

105  Summary of withholding payments

 (1) The payments and other transactions covered by PAYG withholding are called withholding payments. They are summarised in the table.

Note: The obligation to pay an amount to the Commissioner is imposed on the entity making the withholding payment (except for items 17, 19 and 22, and 26 (to the extent that it covers subsection 12390(4))).

 

Summary of withholding payments

Item

Withholding payment

Section

1

A payment of salary etc. to an employee

1235

2

A payment of remuneration to the director of a company

1240

3

A payment of salary etc. to an office holder (e.g. a member of the Defence Force)

1245

3A

a payment to a *religious practitioner

1247

4

A return to work payment to an individual

1250

5

A payment that is covered by a voluntary agreement

1255

6

A payment under a labour hire arrangement or a payment specified by regulations

1260

7

A *superannuation income stream or an annuity

1280

8

A *superannuation lump sum or a payment for termination of employment

1285

9

An unused leave payment

1290

10

A social security or similar payment (e.g. old age pension)

12110

11

A Commonwealth education or training payment

12115

12

A compensation, sickness or accident payment

12120

13

A payment arising from an investment where the recipient does not quote its tax file number, or in some cases, its ABN

12140

14

Investor becoming presently entitled to income of a unit trust

12145

14A

A trustee of a closely held trust distributing an amount from the trust income to a beneficiary, where the beneficiary does not quote its tax file number

12175

14B

A beneficiary of a closely held trust becoming presently entitled to income of the trust, where the beneficiary does not quote its tax file number

12180

15

A payment for a supply where the recipient of the payment does not quote its ABN

12190

16

A dividend payment to an overseas person

12210

17

A dividend payment received for a foreign resident

12215

18

An interest payment to an overseas person

12245

19

An interest payment received for a foreign resident

12250

20

An interest payment derived by a lender in carrying on business through overseas permanent establishment

12255

21

A royalty payment to an overseas person

12280

22

A royalty payment received for a foreign resident

12285

22A

A departing Australia superannuation payment

12305

22AA

An *excess untaxed rollover amount

12312

22B

A payment (of a kind set out in the regulations) to a foreign resident

12315

22C

A payment (of a kind set out in the regulations) received for a foreign resident

12317

22D

A payment of salary, wages etc. to an employee under the Seasonal Labour Mobility Program

12319A

23

A mining payment

12320

24

A natural resource payment

12325

25

A payment by a managed investment trust

12385

26

A payment by a *custodian or other entity

12390

 (2) These can also be treated as withholding payments:

 (a) alienated personal services payments (see Division 13);

 (b) noncash benefits (see Division 14).

Note: The obligation to pay an amount to the Commissioner is imposed on the entity receiving the alienated personal services payment or providing the noncash benefit.

Division 11Preliminary matters

Table of sections

111 Object of this Part

115 Constructive payment

111  Object of this Part

  The object of this Part is to ensure the efficient collection of:

 (a) income tax; and

 (b) *Medicare levy; and

 (ca) amounts of liabilities to the Commonwealth under Chapter 4 of the Higher Education Support Act 2003; and

 (da) amounts of liabilities to the Commonwealth under Part 2B.3 of the Social Security Act 1991; and

 (db) amounts of liabilities to the Commonwealth under Division 6 of Part 4A of the Student Assistance Act 1973; and

 (d) *withholding tax; and

 (e) *mining withholding tax; and

 (f) *TFN withholding tax; and

 (g) *MRRT; and

 (h) *petroleum resource rent tax.

115  Constructive payment

 (1) In working out whether an entity has paid an amount to another entity, and when the payment is made, the amount is taken to have been paid to the other entity when the first entity applies or deals with the amount in any way on the other’s behalf or as the other directs.

 (2) An amount is taken to be payable by an entity to another entity if the first entity is required to apply or deal with it in any way on the other’s behalf or as the other directs.

Division 12Payments from which amounts must be withheld

Table of Subdivisions

12A General rules

12B Payments for work and services

12C Payments for retirement or because of termination of employment

12D Benefit and compensation payments

12E Payments where TFN or ABN not quoted

12F Dividend, interest and royalty payments

12FA Departing Australia superannuation payments

12FAA Excess untaxed rollover amount

12FB Payments to foreign residents etc.

12FC Seasonal Labour Mobility Program

12G Payments in respect of mining on Aboriginal land, and natural resources

12H Distributions of managed investment trust income

Subdivision 12AGeneral rules

Table of sections

121 General exceptions

125 What to do if more than one provision requires a withholding

127 Division does not apply to alienated personal services payments

1210 Division does not apply to noncash benefits

1220 Application of Division and regulations to nonshare dividends

121  General exceptions

Exempt income of recipient

 (1) An entity need not withhold an amount under section 1235, 1240, 1245, 1247, 1250, 1255, 1260, 1280, 1285, 1290, 12120 or 12190 from a payment if the whole of the payment is *exempt income of the entity receiving the payment.

Nonassessable nonexempt income of recipient

 (1A) An entity need not withhold an amount under Subdivision 12B, Subdivision 12C or section 12120 or 12190 from a payment if the whole of the payment is not assessable income and is not *exempt income of the entity receiving the payment.

Livingawayfromhome allowance benefit

 (2) In working out how much to withhold under section 1235, 1240, 1245, 1247, 12115, 12120, 12315 or 12317 from a payment, disregard so much of the payment as is a livingawayfromhome allowance benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986.

Expense payment benefit

 (3) In working out how much to withhold under section 1235, 1240, 1245, 1247, 12115, 12120, 12315 or 12317 from a payment, disregard so much of the payment as:

 (a) is an expense payment benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986; and

 (b) is not any of the following:

 (i) an exempt benefit under section 22 of that Act (about reimbursement of car expenses on the basis of distance travelled);

 (ii) an expense payment benefit in relation to a contribution to an *FHSA.

125  What to do if more than one provision requires a withholding

 (1) If more than one provision in this Division covers a payment, only one amount is to be withheld from the payment.

 (2) The provision to apply is the one that is most specific to the circumstances of the payment. However, this general rule is subject to the specific rules in the table, and the specific rule in subsection (3).

 

Specific rules for determining priority among withholding provisions

Item

Apply:

Which is about:

In priority to:

1AA

section 12385 or 12390

distributions to foreign residents from *managed investment trusts

each other withholding provision

1

section 1235, 1240, 1245, 1247 or 1250

a payment for work or services

section 1260 (payment under a labour hire arrangement or specified by regulations); or

section 12190 (payment for a supply where recipient does not quote its ABN)

1A

section 1235 or 1245

a payment for work or services

section 1247 (a payment to a *religious practitioner)

2

section 1280, 1285 or 1290

a *superannuation benefit, an annuity, a payment for termination of employment or an unused leave payment

section 1260 (payment under a labour hire arrangement or specified by regulations); or

section 12190 (payment for a supply where recipient does not quote its ABN)

3

section 12110, 12115 or 12120

a payment of benefit or compensation

section 1260 (payment under a labour hire arrangement or specified by regulations); or

section 12190 (payment for a supply where recipient does not quote its ABN)

4

section 1260

a payment under a labour hire arrangement or specified by regulations

section 12190 (payment for a supply where recipient does not quote its ABN)

5

section 12140 or 12145

a payment arising from investment where the recipient does not quote tax file number

section 12175 or 12180 (Payment of income of closely held trust where TFN not quoted) or section 12210, 12215, 12245, 12250 or 12255 (payment of a dividend or interest)

6

section 12280 or 12285

a payment of royalty

section 12325 (natural resource payment)

 (3) Apply a provision in this Division (apart from a provision in Subdivision 12FB) that covers a payment in priority to a provision in Subdivision 12FB that also covers the payment.

Note: Some provisions of this Division clearly do not cover a payment covered by some other provisions. For example:

127  Division does not apply to alienated personal services payments

 (1) This Division (other than the provisions mentioned in subsection (2)) does not apply to a payment in so far as the payment:

 (a) is an *alienated personal services payment; or

 (b) was received, by the entity making the payment, as an *alienated personal services payment.

Note: An entity that receives an alienated personal services payment may be obliged to pay an amount to the Commissioner: see Division 13.

 (2) The provisions are:

 (a) Subdivision 12FB; and

 (b) any other provisions in this Division to the extent that they apply in relation to that Subdivision.

1210  Division does not apply to noncash benefits

  This Division does not apply to a payment in so far as it consists of providing a *noncash benefit.

Note: If a noncash benefit is provided in circumstances where a payment would give rise to a withholding obligation, the provider must pay an amount to the Commissioner: see Division 14.

1220  Application of Division and regulations to nonshare dividends

  This Division and the regulations made for the purposes of this Division:

 (a) apply to a nonshare equity interest in the same way as it applies to a share; and

 (b) apply to an equity holder in the same way as it applies to a shareholder; and

 (c) apply to a nonshare dividend in the same way as it applies to a dividend.

Subdivision 12BPayments for work and services

Table of sections

1235 Payment to employee

1240 Payment to company director

1245 Payment to office holder

1247 Payment to religious practitioners

1250 Return to work payment

1255 Voluntary agreement to withhold

1260 Payment under labour hire arrangement, or specified by regulations

1235  Payment to employee

  An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity).

For exceptions, see section 121.

1240  Payment to company director

  A company must withhold an amount from a payment of remuneration it makes to an individual:

 (a) if the company is incorporated—as a director of the company, or as a person who performs the duties of a director of the company; or

 (b) if the company is not incorporated—as a member of the committee of management of the company, or as a person who performs the duties of such a member.

For exceptions, see section 121.

1245  Payment to office holder

 (1) An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as:

 (a) a member of an *Australian legislature; or

 (b) a person who holds, or performs the duties of, an appointment, office or position under the Constitution or an *Australian law; or

 (c) a member of the Defence Force, or of a police force of the Commonwealth, a State or a Territory; or

 (d) a person who is otherwise in the service of the Commonwealth, a State or a Territory; or

 (e) a member of a *local governing body where there is in effect, in accordance with section 4465, a unanimous resolution by the body that the remuneration of members of the body be subject to withholding under this Part.

For exceptions, see section 121.

 (2) This section does not require an amount to be withheld from a payment to an individual as a member of a *local governing body unless it is one to which paragraph (1)(e) applies.

1247  Payment to religious practitioners

  An entity must withhold an amount from a payment it makes to a *religious practitioner for an activity, or a series of activities, if:

 (a) the activity, or series of activities, is done by the religious practitioner in pursuit of his or her vocation as a religious practitioner; and

 (b) the activity, or series of activities, is done by the religious practitioner as a member of a religious institution; and

 (c) the payment is made by the entity in the course or furtherance of an *enterprise that the entity *carries on.

1250  Return to work payment

  An entity must withhold an amount from a payment it makes to an individual if the payment is included in the individual’s assessable income under section 153 of the Income Tax Assessment Act 1997 (return to work payments).

For exceptions, see section 121.

1255  Voluntary agreement to withhold

 (1) An entity must withhold an amount from a payment it makes to an individual if:

 (a) the payment is made under an *arrangement the performance of which, in whole or in part, involves the performance of work or services (whether or not by the individual); and

 (b) no other provision of this Division requires the entity to withhold an amount from the payment; and

 (c) the entity and the individual are parties to an agreement (the voluntary agreement) that is in the *approved form and states that this section covers payments under the arrangement mentioned in paragraph (a), or under a series of such arrangements that includes that arrangement; and

 (d) the individual has an *ABN that is in force and is *quoted in that agreement.

For exceptions, see section 121.

 (2) Each party must keep a copy of the voluntary agreement from when it is made until 5 years after the making of the last payment covered by the agreement.

Penalty: 30 penalty units.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

 (2A) An offence under subsection (2) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

 (3) A party to the voluntary agreement may terminate it at any time by notifying the other party in writing.

1260  Payment under labour hire arrangement, or specified by regulations

 (1) An entity that *carries on an *enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if:

 (a) the enterprise is a *business of arranging for persons to perform work or services directly for clients of the entity, or the enterprise includes a business of that kind that is not merely incidental to the main activities of the enterprise; and

 (b) the payment is made under an *arrangement the performance of which, in whole or in part, involves the performance of work or services by the individual directly for a client of the entity, or directly for a client of another entity.

For exceptions, see section 121.

Example 1: Staffprovider Ltd keeps a database of skilled persons who are willing for their services to be provided to third parties. Staffprovider arranges with Corporate Pty Ltd to provide to it the services of a computer programmer in return for payment. Staffprovider arranges with Jane for her to do computer programming for Corporate. Staffprovider must withhold amounts under this section from payments it makes to Jane under the arrangement with her.

Example 2: Ian is a solicitor who regularly briefs barristers to represent his clients. Briefing barristers is merely incidental to Ian’s main activities as a solicitor, so he does not have to withhold amounts under this section from payments he makes to barristers.

 (2) An entity that carries on an *enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if the payment is, in whole or in part, for work or services and is of a kind prescribed by the regulations.

For exceptions, see section 121.

Subdivision 12CPayments for retirement or because of termination of employment

1280  Superannuation income streams and annuities

  An entity must withhold an amount from any of the following payments it makes to an individual:

 (a) a *superannuation income stream;

 (b) an *annuity.

For exceptions, see section 121.

1285  Superannuation lump sums and payments for termination of employment

  An entity must withhold an amount from any of the following payments it makes to an individual:

 (a) a *superannuation lump sum;

 (b) a payment that is an *employment termination payment or would be one except that it is received more than 12 months after termination of employment.

For exceptions, see section 121.

1290  Unused leave payments

  An entity must withhold an amount from any of the following payments it makes to an individual:

 (a) an *unused annual leave payment;

 (b) an *unused long service leave payment, to the extent that the payment is included in the individual’s assessable income.

For exceptions, see section 121.

Subdivision 12DBenefit and compensation payments

Table of sections

12110 Social Security or other benefit payment

12115 Commonwealth education or training payment

12120 Compensation, sickness or accident payment

12110  Social Security or other benefit payment

 (1) An entity must withhold an amount from a payment it makes to an individual if the payment is:

 (a) specified in an item of the table in section 5210 of the Income Tax Assessment Act 1997 (Social Security payments); or

 (b) specified in an item of the table in section 5265 of that Act (Veterans’ Affairs payments); or

 (ba) specified in an item of the table in section 52114 of that Act (Military Rehabilitation and Compensation Act payments); or

 (c) specified in section 52105, 5310, 555 or 5510 of that Act; or

Note: Payments specified in those provisions of the Income Tax Assessment Act 1997 are made under various Commonwealth laws.

 (ca) *parental leave pay; or

 (cb) *dad and partner pay; or

 (d) made under Part 3.15A of the Social Security Act 1991.

 (2) In working out the amount to be withheld, disregard so much of the payment as is *exempt income of the individual.

12115  Commonwealth education or training payment

 (1) An entity must withhold an amount from a *Commonwealth education or training payment it makes to an individual.

For exceptions, see subsection (2) and section 121.

 (2) In working out the amount to be withheld, disregard so much of the payment as is *exempt income of the individual.

12120  Compensation, sickness or accident payment

  An entity must withhold an amount from a payment of compensation, or of sickness or accident pay, it makes to an individual if the payment:

 (a) is made because of that or another individual’s incapacity for work; and

 (b) is calculated at a periodical rate; and

 (c) is not a payment made under an insurance policy to the policy owner.

For exceptions, see section 121.

Subdivision 12EPayments where TFN or ABN not quoted

Table of sections

Payment in respect of investment

12140 Recipient does not quote tax file number

12145 Investor becoming presently entitled to income of a unit trust

12150 Limited application of section 12140 to payment under financial arrangement

12155 When investor may quote ABN as alternative

12160 Investment body unaware that exemption from quoting TFN has stopped applying

12165 Exception for fully franked dividend

12170 Exception for payments below thresholds set by regulations

Payment of income of closely held trust where TFN not quoted

12175 Trustee distributes income of closely held trust

12180 Beneficiary becomes presently entitled to income of closely held trust

12185 Exception for payments below thresholds set by regulations

Payment for a supply

12190 Recipient does not quote ABN

Payment in respect of investment

12140  Recipient does not quote tax file number

 (1) An *investment body must withhold an amount from a payment it makes to another entity in respect of a *Part VA investment if:

 (a) all or some of the payment is *ordinary income or *statutory income of the other entity; and

 (b) if the investment is nontransferable—the other entity did not *quote its *tax file number in connection with the investment before the time when the payment became payable; and

 (c) if the investment is transferable—the other entity did not quote its tax file number in connection with the investment before the time when the other entity had to be registered with the investment body as the *investor to be entitled to the payment.

Payment in respect of units in a trust or investmentrelated betting chance

 (2) If a *Part VA investment consists of:

 (a) units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936); or

 (b) an investmentrelated betting chance;

an entity (including the *investment body) must withhold an amount from a payment it makes to another entity in respect of the investment if the conditions in subsection (1) of this section are met.

For exceptions to the rules in this section, see sections 12150 to 12170.

12145  Investor becoming presently entitled to income of a unit trust

 (1) This section applies if:

 (a) a *Part VA investment consists of units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936); and

 (b) the *investor becomes presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of income of the trust at a time (the entitlement time) before any of that share is paid to the investor.

 (2) The entity (including the *investment body) that would have to pay that share to the *investor if the share were due and payable at the entitlement time must withhold from the share, at that time, the amount (if any) that subsection 12140(2) would have required it to withhold if it had paid the share to the investor at that time.

For exceptions to the rules in this section, see sections 12155 to 12170.

 (3) This Part (except section 12140 and this section) applies as if that entity had paid that share to the *investor at the entitlement time.

 (4) If that entity withholds an amount from that share as required by subsection (2), subsection 12140(2) does not require an amount to be withheld from a payment of all or part of that share to the *investor.

12150  Limited application of section 12140 to payment under financial arrangement

 (1) This section limits the extent to which section 12140 applies to a payment in respect of a *Part VA investment if the investment is a qualifying security (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936 (about gains accruing on securities)) and:

 (a) is of a kind mentioned in item 1 or 2 of the table in subsection 202D(1) of that Act; or

 (b) is of a kind mentioned in item 3 of that table and is nontransferable.

Note: Section 202D of the Income Tax Assessment Act 1936 lists the investments in connection with which tax file numbers are to be quoted.

 (2) Section 12140 applies to the payment only to the extent that is covered by one or both of these paragraphs:

 (a) so much of the payment as consists of periodic interest (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936);

 (b) if the payment became payable at the end of the term (within the meaning of that Division) of the investment—so much of the payment as does not exceed what section 159GQ of that Act would include in the *investor’s assessable income for the income year in which that term ended.

Note: This limitation ensures that an amount is not withheld from payment of an amount in respect of which TFN withholding tax is payable. See Subdivision 14B.

 (3) The adoption (under section 18 of the Income Tax Assessment Act 1936) of an accounting period ending on a day other than 30 June is disregarded for the purposes of:

 (a) paragraph (2)(b) of this section; and

 (b) the application of Division 16E of Part III of that Act for the purposes of that paragraph.

12155  When investor may quote ABN as alternative

  Section 12140 or 12145 does not require an amount to be withheld if:

 (a) the other entity made the investment in the course or furtherance of an *enterprise *carried on by it; and

 (b) the other entity has an *ABN, and has *quoted it to the investment body, by the time referred to in paragraph 12140(1)(b) or (c).

12160  Investment body unaware that exemption from quoting TFN has stopped applying

  Section 12140 or 12145 does not require an amount to be withheld if:

 (a) a provision of Division 5 of Part VA of the Income Tax Assessment Act 1936 has applied to the other entity in relation to the investment, but no longer applies when the payment is made; and

 (b) when the payment is made, the *investment body has not been informed of anything that resulted in the provision no longer applying.

Note: Division 5 of Part VA of that Act provides, in certain cases, that even though an entity has not quoted its tax file number it is taken to have done so.

12165  Exception for fully franked dividend

  Section 12140 does not require an amount to be withheld if:

 (a) the investment consists of *shares in a public company (as defined in section 202A of the Income Tax Assessment Act 1936); and

 (b) the payment is a *distribution that has been franked in accordance with section 2025 of the Income Tax Assessment Act 1997; and

 (c) the *franking percentage for the distribution is 100%.

12170  Exception for payments below thresholds set by regulations

 (1) Section 12140 or 12145 does not require an amount to be withheld if the payment is less than the amount worked out under the regulations.

 (2) Regulations made for the purposes of this section may deal differently with different payments.

Payment of income of closely held trust where TFN not quoted

12175  Trustee distributes income of closely held trust

Scope

 (1) This section applies if:

 (a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time) during an income year of the trust; and

 (b) some or all of the distribution is from the *ordinary income or *statutory income of the trust; and

 (c) the trust is:

 (i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936) in relation to the income year; and

 (ii) a closely held trust (within the meaning of section 102UC of that Act, disregarding paragraphs (c), (d) and (e) of the definition of excluded trust in subsection (4) of that section); and

 (iii) not prescribed by the regulations for the purposes of this subparagraph; and

 (d) the beneficiary is:

 (i) an Australian resident; and

 (ii) not an *exempt entity; and

 (iii) not under a legal disability for the purposes of section 98 of that Act.

Trustee must withhold

 (2) The trustee must withhold an amount from the distribution, if:

 (a) the beneficiary did not *quote the beneficiary’s *tax file number to the trustee before the distribution time; and

 (b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and

 (c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary nondisclosure tax) in connection with the distribution; and

 (d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.

Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12140 in priority to this section: see section 125.

Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 1625.

Application of rest of Part

 (3) If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time.

Trust income of earlier income years

 (4) Subsections (2) and (3) do not apply to the distribution, to the extent that:

 (a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of the income of the trust of an earlier income year; and

 (b) the distribution is a distribution of some or all of that share.

Note: The trustee may have been required to withhold from that share under section 12180.

12180  Beneficiary becomes presently entitled to income of closely held trust

Scope

 (1) This section applies if:

 (a) at the end of an income year of a trust, a beneficiary of the trust is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of the income of the trust of that year; and

 (b) paragraph 12175(1)(c) in this Schedule applies to the trustee of the trust; and

 (c) paragraph 12175(1)(d) applies to the beneficiary.

Trustee must withhold

 (2) The trustee must withhold an amount from that share of the *net income of the trust, if:

 (a) the beneficiary did not *quote the beneficiary’s *tax file number to the trustee before the end of the year; and

 (b) the trustee is not liable to pay tax in respect of that share under section 98 of the Income Tax Assessment Act 1936; and

 (c) the trustee is not required to make a correct TB statement about that share under Division 6D of Part III of that Act (about trustee beneficiary nondisclosure tax); and

 (d) family trust distribution tax is not payable on that share of the income of the trust under Schedule 2F to that Act.

Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12145 in priority to this section: see section 125.

Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 1625.

Application of rest of Part

 (3) This Part (other than section 12175) applies as if the trustee had paid that share of the *net income of the trust to the beneficiary at the end of the income year.

Entitlements already paid

 (4) Subsections (2) and (3) do not apply to that share of the *net income of the trust to the extent that the trustee distributed any of that share to the beneficiary during the income year.

Note: The trustee may have been required to withhold from that distribution under section 12175.

Trusts that end during the year

 (5) This section applies as if each reference to the end of an income year were a reference to the time occurring just before the trust ends, if the trust ends during the income year.

12185  Exception for payments below thresholds set by regulations

 (1) Section 12175 or 12180 does not require an amount to be withheld if the payment (including the payment mentioned in subsection 12180(3)) is less than the amount worked out under the regulations.

 (2) Regulations made for the purposes of this section may deal differently with different payments.

Payment for a supply

12190  Recipient does not quote ABN

 (1) An entity (the payer) must withhold an amount from a payment it makes to another entity if:

 (a) the payment is for a *supply that the other entity has made, or proposes to make, to the payer in the course or furtherance of an *enterprise *carried on in Australia by the other entity; and

 (b) none of the exceptions in this section applies.

ABN correctly quoted

 (2) The payer need not withhold an amount under this section if, when the payment is made:

 (a) the other entity has given the payer an *invoice that relates to the *supply and *quotes the other entity’s *ABN; or

 (b) the payer has some other document relating to the supply on which the other entity’s ABN is *quoted.

 (2A) The payer need not withhold an amount under this section if the other entity has made the *supply, or proposes to make the supply, through an agent and, when the payment is made:

 (a) the agent has given the payer an *invoice that relates to the supply and *quotes the agent’s *ABN; or

 (b) the payer has some other document relating to the supply on which the agent’s ABN is *quoted.

Payer has no reason to believe that ABN has been incorrectly quoted

 (3) The payer need not withhold an amount under this section if, when the payment is made:

 (a) the other entity has given the payer an *invoice that relates to the *supply and purports to *quote the other entity’s *ABN, or the payer has some other document that relates to the supply and purports to *quote the other entity’s ABN; and

 (b) the other entity does not have an ABN, or the invoice or other document does not in fact quote the other entity’s ABN; and

 (c) the payer has no reasonable grounds to believe that the other entity does not have an ABN, or that the invoice or other document does not quote the other entity’s ABN.

 (3A) The payer need not withhold an amount under this section if the other entity has made the *supply, or proposes to make the supply, through an agent and, when the payment is made:

 (a) the agent has given the payer an *invoice that relates to the supply and purports to *quote the agent’s *ABN, or the payer has some other document that relates to the supply and purports to *quote the agent’s ABN; and

 (b) the agent does not have an ABN, or the invoice or other document does not in fact quote the agent’s ABN; and

 (c) the payer has no reasonable grounds to believe that the agent does not have an ABN, or that the invoice or other document does not quote the agent’s ABN.

No need to quote ABN

 (4) The payer need not withhold an amount under this section if:

 (a) the payment is made otherwise than in the course or furtherance of an *enterprise *carried on in Australia by the payer; or

 (b) the payment (disregarding so much of it as relates to *GST payable on the *supply) or, if the payer has also made, or proposes to make, one or more other payments to the other entity for the supply, the total of all the payments (disregarding so much of them as relates to *GST payable on the supply) does not exceed $50 or such higher amount as is specified in regulations in force for the purposes of subsection 2980(1) of the *GST Act; or

 (c) the supply is made in the course or furtherance of an activity, or series of activities, done as a member of a local governing body established by or under a *State law or *Territory law; or

 (d) the supply is wholly *input taxed.

 (5) The payer need not withhold an amount under this section if the payment:

 (a) is covered by section 12140 or 12145 (about not quoting *tax file number in respect of an investment in respect of which the payment is made); or

 (b) would be covered by section 12140 or 12145 if the other entity had not quoted as mentioned in subsection 12140(1) or section 12155; or

 (c) would be covered by section 12140 or 12145 apart from section 12160, 12165 or 12170 (which are exceptions to sections 12140 and 12145); or

 (d) is covered by section 12175 or 12180 (Payment of income of closely held trust where TFN not quoted); or

 (e) would be covered by section 12175 or 12180 if the other entity had not quoted as mentioned in paragraph 12175(2)(a) or 12180(2)(a); or

 (f) would be covered by section 12175 or 12180 apart from section 12185 (which is an exception to sections 12175 and 12180).

 (6) The payer need not withhold an amount under this section if, when the payment is made:

 (a) the other entity is an individual and has given the payer a written statement to the effect that:

 (i) the *supply is made in the course or furtherance of an activity, or series of activities, done as a private recreational pursuit or hobby; or

 (ii) the supply is, for the other entity, wholly of a private or domestic nature; and

 (b) the payer has no reasonable grounds to believe that the statement is false or misleading in a material particular.

 (7) In working out, for the purposes of this section, whether an enterprise is *carried on in Australia:

 (a) ignore the external Territories; and

 (b) treat an installation (within the meaning of the Customs Act 1901) that is deemed by section 5C of the Customs Act 1901 to be part of Australia, as part of Australia.

Note: The effect of this subsection is to treat an enterprise as carried on in Australia only where it would be treated as carried on in Australia under the A New Tax System (Australian Business Number) Act 1999.

Subdivision 12FDividend, interest and royalty payments

Table of sections

Dividends

12210 Dividend payment to overseas person

12215 Dividend payment received for foreign resident

12220 Application to part of a dividend

12225 Application to distribution by a liquidator or other person

Interest

12245 Interest payment to overseas person

12250 Interest payment received for foreign resident

12255 Interest payment derived by lender in carrying on business through overseas permanent establishment

12255 Interest payment derived by lender in carrying on business through overseas permanent establishment

12260 Lender to notify borrower if interest derived through overseas permanent establishment

Royalties

12280 Royalty payment to overseas person

12285 Royalty payment received for foreign resident

General

12300 Limits on amount withheld under this Subdivision

Dividends

12210  Dividend payment to overseas person

  A company that is an Australian resident must withhold an amount from a *dividend it pays if:

 (a) according to the register of the company’s members, the entity, or any of the entities, holding the *shares on which the dividend is paid has an address outside Australia; or

 (b) that entity, or any of those entities, has authorised or directed the company to pay the dividend to an entity or entities at a place outside Australia.

For limits on the amount to be withheld, see section 12300.

12215  Dividend payment received for foreign resident

 (1) An entity that receives a payment of a *dividend of a company that is an Australian resident must withhold an amount from the dividend if:

 (a) the entity is a person in Australia or an *Australian government agency; and

 (b) a foreign resident is or becomes entitled:

 (i) to receive the dividend or part of it from the entity, or to receive the amount of the dividend or of part of it from the entity; or

 (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the dividend or part of it, or the amount of the dividend or of part of it.

For limits on the amount to be withheld, see section 12300.

 (2) The entity must withhold the amount:

 (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or

 (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

12220  Application to part of a dividend

  This Part applies to a part of a *dividend in the same way as to a dividend.

12225  Application to distribution by a liquidator or other person

  This Part applies to a distribution that section 47 of the Income Tax Assessment Act 1936 treats as a *dividend paid by a company, in the same way as this Part applies to a dividend paid by the company, and as if the liquidator or other person making the distribution were the company.

Interest

12245  Interest payment to overseas person

  An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) it pays to an entity, or to entities jointly, if:

 (a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the interest relates; or

 (b) the payer is authorised to pay the interest at a place outside Australia (whether to the recipient or any of the recipients or to anyone else).

For limits on the amount to be withheld, see section 12300.

12250  Interest payment received for foreign resident

 (1) An entity that receives a payment of interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) must withhold an amount from the payment if:

 (a) the entity is a person in Australia or an *Australian government agency; and

 (b) a foreign resident is or becomes entitled:

 (i) to receive the interest or part of it from the entity, or to receive the amount of the interest or of part of it from the entity; or

 (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the interest or part of it, or the amount of the interest or of part of it.

For limits on the amount to be withheld, see section 12300.

 (2) The entity must withhold the amount:

 (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or

 (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

12255  Interest payment derived by lender in carrying on business through overseas permanent establishment

  An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) it pays if it has been notified under section 12260 of this Act that this section applies to the interest.

Note: For limits on the amount to be withheld, see section 12300.

12260  Lender to notify borrower if interest derived through overseas permanent establishment

 (1) If:

 (a) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) is payable to:

 (i) an entity that is, or entities at least one of whom is, an Australian resident; or

 (ii) an *Australian government agency; and

 (b) the entity liable to pay the interest is authorised to pay it at a place in Australia (whether to any of those entities or the agency, or to anyone else); and

 (c) the interest is or will be *derived by any of those entities or the agency in carrying on business in a country outside Australia at or through a *permanent establishment it has in that country;

those entities, or the agency, must notify the entity liable to pay the interest that section 12255 applies to the interest.

 (2) The notice must be given in writing, before the entities, or the agency, enter into the transaction in relation to which the interest is payable, or within one month afterwards.

 (3) Immediately after giving the notice, those entities, or the agency, must notify the Commissioner of:

 (a) the particulars of the transaction (including the dates on which interest is payable under it); and

 (b) the day when the notice was given to the entity liable to pay the interest.

Failure to comply with this section may contravene section 8C of this Act.

Royalties

12280  Royalty payment to overseas person

  An entity must withhold an amount from a *royalty it pays to an entity, or to entities jointly, if:

 (a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the royalty relates; or

 (b) the payer is authorised to pay the royalty at a place outside Australia (whether to the recipient or any of the recipients or to anyone else).

For limits on the amount to be withheld, see section 12300.

12285  Royalty payment received for foreign resident

 (1) An entity that receives a payment of a *royalty must withhold an amount from the payment if:

 (a) the entity is a person in Australia or an *Australian government agency; and

 (b) a foreign resident is or becomes entitled:

 (i) to receive the royalty or part of it from the entity, or to receive the amount of the royalty or of part of it from the entity; or

 (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the royalty or part of it, or the amount of the royalty or of part of it.

For limits on the amount to be withheld, see section 12300.

 (2) The entity must withhold the amount:

 (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or

 (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

General

12300  Limits on amount withheld under this Subdivision

  This Subdivision does not require an entity:

 (a) to withhold an amount from a *dividend, from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) or from a *royalty if no *withholding tax is payable in respect of the dividend, interest or royalty; or

 (b) to withhold from a dividend, from interest (within the meaning of that Division) or from a royalty more than the withholding tax payable in respect of the dividend, interest or royalty (reduced by each amount already withheld from it under this Subdivision).

Note: Section 128B of the Income Tax Assessment Act 1936 deals with withholding tax liability.

Subdivision 12FADeparting Australia superannuation payments

Table of sections

12305 Departing Australia superannuation payment

12310 Limits on amount withheld under this Subdivision

12305  Departing Australia superannuation payment

  An entity must withhold an amount from a *departing Australia superannuation payment it pays to an entity.

12310  Limits on amount withheld under this Subdivision

  This Subdivision does not require an entity:

 (a) to withhold an amount from a *departing Australia superannuation payment if no *withholding tax is payable in respect of the payment; or

 (b) to withhold from a departing Australia superannuation payment more than the withholding tax payable in respect of the payment (reduced by each amount already withheld from it under this Subdivision).

Note: Section 301175 of the Income Tax Assessment Act 1997 deals with the withholding tax liability.

Subdivision 12FAAExcess untaxed rollover amount

Table of sections

12312 Untaxed rollover superannuation benefits

12313 Limits on amount withheld under this Subdivision

12312  Untaxed rollover superannuation benefits

  An entity must withhold an amount from an *excess untaxed rollover amount it pays to an entity.

Note: An excess untaxed rollover amount is an amount that may form part of a rollover superannuation benefit that includes an element untaxed in the fund: see section 30615 of the Income Tax Assessment Act 1997.

12313  Limits on amount withheld under this Subdivision

  This Subdivision does not require an entity:

 (a) to withhold an amount from an *excess untaxed rollover amount if no *withholding tax is payable on the amount; or

 (b) to withhold from an excess untaxed rollover amount more than the withholding tax payable on the amount (reduced by each amount already withheld from the excess untaxed rollover amount under this Subdivision).

Note: Section 30615 of the Income Tax Assessment Act 1997 deals with liability to this form of withholding tax.

Subdivision 12FBPayments to foreign residents etc.

Table of sections

12315 Payment to foreign resident etc.

12317 Payment received for foreign resident etc.

12319 Exemptions from withholding obligations under this Subdivision

12315  Payment to foreign resident etc.

 (1) An entity (the payer) that *carries on an *enterprise must withhold an amount from a payment it makes to another entity, or to other entities jointly, in the course or furtherance of the enterprise if:

 (a) the entity receiving the payment, or any of the entities receiving the payment, is an entity covered by subsection (2); and

 (b) the payment is of a kind set out in the regulations; and

 (c) the payment is not:

 (i) a *dividend of a company; or

 (ii) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936); or

 (iii) a *royalty; or

 (iv) a *departing Australia superannuation payment; or

 (v) a payment worked out wholly or partly by reference to the value or quantity of *natural resources produced or recovered in Australia; or

 (vi) a *mining payment; or

 (vii) an amount represented by or reasonably attributable to a *fund payment; and

 (d) the entity receiving the payment is not covered by an exemption in force under subsection 12319(1), or at least one of the entities receiving the payment is not covered by an exemption in force under that subsection.

 (2) An entity is covered by this subsection if any of the following conditions is satisfied:

 (a) the entity is a foreign resident;

 (b) the payer believes, or has reasonable grounds to believe, that the entity is a foreign resident;

 (c) the payer has no reasonable grounds to believe that the entity is an Australian resident, and either:

 (i) the entity has an address outside Australia (according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the payment relates); or

 (ii) the payer is authorised to make the payment at a place outside Australia (whether to the entity or to anyone else);

 (d) the entity has a connection outside Australia of a kind set out in the regulations.

 (3) Before the GovernorGeneral makes a regulation for the purposes of paragraph (1)(b), the Minister must be satisfied that each payment set out in the regulation is a payment of a kind that could reasonably be related to assessable income of foreign residents.

12317  Payment received for foreign resident etc.

 (1) An entity (the intermediary) that receives a payment meeting the requirements set out in paragraphs 12315(1)(b) and (c) must withhold an amount from the payment if:

 (a) the intermediary is a person in Australia or an *Australian government agency; and

 (b) another entity (the likely foreign recipient) is or becomes entitled:

 (i) to receive the payment or part of it from the intermediary, or to receive the amount of the payment or of part of it from the intermediary; or

 (ii) to have the intermediary credit to the likely foreign recipient, or otherwise deal with on the likely foreign recipient’s behalf or as the likely foreign recipient directs, the payment or part of it, or the amount of the payment or of part of it; and

 (c) the likely foreign recipient is covered by subsection (3); and

 (d) the likely foreign recipient is not covered by an exemption in force under subsection 12319(1).

 (2) The intermediary must withhold the amount:

 (a) if the likely foreign recipient is so entitled when the intermediary receives the payment—just after the intermediary receives the payment; or

 (b) if the likely foreign recipient becomes so entitled after the intermediary receives the payment—just after the likely foreign recipient becomes so entitled.

 (3) The likely foreign recipient is covered by this subsection if any of the following conditions is satisfied:

 (a) the likely foreign recipient is a foreign resident;

 (b) the intermediary believes, or has reasonable grounds to believe, that the likely foreign recipient is a foreign resident;

 (c) the intermediary has no reasonable grounds to believe that the likely foreign recipient is an Australian resident, and either:

 (i) the likely foreign recipient has an address outside Australia (according to any record that is in the intermediary’s possession, or is kept or maintained on the intermediary’s behalf); or

 (ii) the intermediary is authorised to forward the payment to a place outside Australia (whether to the likely foreign recipient or to anyone else);

 (d) the likely foreign recipient has a connection outside Australia of a kind set out in the regulations.

12319  Exemptions from withholding obligations under this Subdivision

 (1) The Commissioner may grant an entity an exemption in writing for the purposes of paragraphs 12315(1)(d) and 12317(1)(d) if the Commissioner is satisfied that:

 (a) the entity has an established history of compliance with its obligations under *taxation laws; and

 (b) the entity is likely to continue to comply with those obligations in the future.

 (2) The exemption is in force during the period:

 (a) beginning when the Commissioner grants the exemption; and

 (b) ending at the time specified in the exemption.

 (3) Without limiting the matters to which the Commissioner may have regard in deciding whether to grant an entity an exemption, the Commissioner may have regard to the following:

 (a) whether the entity is or was liable to pay an instalment under Division 45 at any time in:

 (i) the income year in which the exemption is proposed to be granted; and

 (ii) the previous 2 income years;

 (b) the amount (if any) of the entity’s *taxrelated liabilities that are currently due and payable;

 (c) the extent to which the entity and its *associates (if any) have complied with their obligations under *taxation laws during:

 (i) the income year in which the exemption is proposed to be granted; and

 (ii) the previous 2 income years.

 (4) The Commissioner must give a copy of the exemption to the entity to which it relates.

 (5) A failure to comply with subsection (4) does not affect the validity of the exemption.

Subdivision 12FCSeasonal Labour Mobility Program

Table of sections

12319A Payment to employee

12319A  Payment to employee

  An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual:

 (a) as an employee of an Approved Employer (whether the entity or another entity) under the Seasonal Labour Mobility Program; and

 (b) at a time when:

 (i) the employee is a foreign resident; and

 (ii) the employee holds a Special Program Visa (subclass 416).

Subdivision 12GPayments in respect of mining on Aboriginal land, and natural resources

Table of sections

Mining on Aboriginal land

12320 Mining payment

Natural resources

12325 Natural resource payment

12330 Payer must ask Commissioner how much to withhold

12335 Commissioner may exempt from section 12330, subject to conditions

Mining on Aboriginal land

12320  Mining payment

 (1) An entity must withhold an amount from a *mining payment that:

 (a) it makes to another entity; or

 (b) it applies for the benefit of another entity.

 (2) Subsection (1) does not require the entity to withhold more than the *mining withholding tax payable in respect of the *mining payment.

Note: Section 128V of the Income Tax Assessment Act 1936 deals with mining withholding tax liability.

Natural resources

12325  Natural resource payment

 (1) An entity must withhold an amount from a payment it makes to a foreign resident, or to 2 or more entities at least one of which is a foreign resident, if the payment is worked out wholly or partly by reference to the value or quantity of *natural resources produced or recovered in Australia.

 (2) The amount to be withheld is:

 (a) the amount notified by the Commissioner under section 12330; or

 (b) the amount worked out under a certificate in force under section 12335 that covers the payment;

as appropriate.

Exception

 (3) Subsection (1) does not apply if:

 (a) the Commissioner has notified the entity under section 12330 that the entity does not need to withhold an amount from the payment; or

 (b) a certificate in force under section 12335 covers the payment and does not require the entity to withhold an amount from it.

12330  Payer must ask Commissioner how much to withhold

 (1) An entity must not intentionally make a payment from which section 12325 requires it to withhold an amount, unless:

 (a) the entity has notified the Commissioner in writing of the amount of the proposed payment; and

 (b) the Commissioner has later notified the entity in writing of the amount (if any) that the entity must withhold from the payment in respect of tax,*MRRT or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made;

or the payment is covered by a certificate in force under section 12335.

Penalty: 20 penalty units.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Failure to notify not an offence against section 8C

 (2) An entity that fails to notify the Commissioner as required by subsection (1) does not commit an offence against section 8C.

12335  Commissioner may exempt from section 12330, subject to conditions

 (1) The Commissioner may give an entity a written certificate exempting the entity from complying with section 12330 for specified payments.

 (2) A certificate is subject to:

 (a) a condition that the entity must withhold from a payment covered by the certificate the amount (if any) worked out in accordance with the certificate in respect of tax,*MRRT or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made; and

 (b) such other conditions as the certificate specifies.

However, the entity does not contravene subsection 12330(1) because it contravenes a condition.

 (3) The Commissioner may, by written notice given to the entity:

 (a) revoke a certificate, whether or not a condition of it has been contravened; or

 (b) vary a certificate by revoking, changing or adding to its conditions.

Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

Subdivision 12HDistributions of managed investment trust income

Guide to Subdivision 12H

12375  What this Subdivision is about

A managed investment trust may be required to withhold an amount from a payment of its Australian sourced net income (other than dividends, interest and royalties) if the payment is made to an entity whose address, or place for payment, is outside Australia. If the payment is made to another entity, the managed investment trust is required to make information available to the recipient outlining certain details in relation to the payment.

If a custodian receives a payment that is covered by that information, it is required to withhold an amount from any related later payment to an entity whose address, or place for payment, is outside Australia. If the later payment is made to another entity, the custodian is required to make information available in relation to that later payment.

If an entity that is not a custodian receives a payment that is covered by that information, it is required to withhold an amount from that payment if a foreign resident becomes entitled to that payment. If a resident becomes entitled to the payment, the entity must make information available in relation to that payment.

Where there is an obligation to withhold, the applicable withholding rate is determined by the nature of the country or territory in which the recipient’s address, place for payment or residency is located and whether the trust is a clean building managed investment trust.

A managed investment trust is a clean building managed investment trust if it is a managed investment trust that holds one or more clean buildings and does not derive assessable income from any other taxable Australian property (other than certain assets that are reasonably incidental to a clean building).

Table of sections

Operative provisions

12385 Withholding by managed investment trusts

12390 Withholding by custodians and other entities

12395 Requirement to give notice or make information available

12400 Meaning of managed investment trust

12401 Trusts with wholesale membership

12402 Widelyheld requirements—ordinary case

12402A Widelyheld requirements for registered MIT—special case for entities covered by subsection 12402(3)

12402B Closelyheld restrictions

12403 Licensing requirements for unregistered MIS

12404 MIT participation interest

12405 Meaning of fund payment

12410 Entity to whom payment is made

12415 Failure to give notice or make information available: administrative penalty

12420 Agency rules

12425 Meaning of clean building managed investment trust

12430 Meaning of clean building

Operative provisions

12385  Withholding by managed investment trusts

 (1) A trustee of a trust that is a *managed investment trust in relation to an income year that makes a *fund payment in relation to that income year to an entity covered by section 12410 must withhold an amount from the payment.

Note 1: An entity may be covered by section 12410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia.

Note 2: If the payment is made to a recipient not covered by section 12410, the trustee is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12395.

 (2) The amount the trustee must withhold is:

 (3) The rate is:

 (a) if the address or place for payment of the recipient is in an *information exchange country:

 (i) 22.5% for *fund payments (except to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust) in relation to the first income year starting on or after the first 1 July after the day on which the Tax Laws Amendment (Election Commitments No. 1) Act 2008 receives the Royal Assent; or

 (ii) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to the following income year; or

 (iii) 7.5% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting before 1 July 2012; or

 (iv) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting on or after 1 July 2012; or

 (v) 10% for fund payments to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust in relation to the income years starting on or after 1 July 2012; or

 (b) otherwise—30%.

 (4) An information exchange country is a foreign country or foreign territory specified in the regulations for the purposes of this section.

 (5) This section does not apply to an amount paid by a *managed investment trust to the extent that no *managed investment trust withholding tax is payable in respect of the payment or an amount reasonably attributable to the payment.

12390  Withholding by custodians and other entities

Withholding by custodians

 (1) A *custodian must withhold an amount from a payment (the later payment) it makes if:

 (a) all or some of the later payment (the covered part) is reasonably attributable to the part of an earlier payment received by the custodian that was covered by a notice or information under section 12395; and

 (b) the later payment is made to an entity covered by section 12410.

Note 1: The covered part referred to in paragraph (1)(a) is attributable to a fund payment made by a managed investment trust, or 2 or more fund payments made by one or more managed investment trusts.

Note 2: An entity may be covered by section 12410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia.

Note 3: If the payment is made to a recipient not covered by section 12410, the custodian is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12395.

 (2) The amount the *custodian must withhold is:

 (3) The rate is:

 (a) if the address or place for payment of the recipient is in an *information exchange country:

 (i) 22.5% for *fund payments (except to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust) in relation to the first income year starting on or after the first 1 July after the day on which the Tax Laws Amendment (Election Commitments No. 1) Act 2008 receives the Royal Assent; or

 (ii) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to the following income year; or

 (iii) 7.5% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting before 1 July 2012; or

 (iv) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting on or after 1 July 2012; or

 (v) 10% for fund payments to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust in relation to the income years starting on or after 1 July 2012; or

 (b) otherwise—30%.

Withholding by other entities

 (4) An entity that is not a *managed investment trust or a *custodian must withhold an amount from a payment it receives if:

 (a) the payment or part of it (the covered part) was covered by a notice or information under section 12395; and

 (b) a foreign resident (the recipient) is or becomes entitled:

 (i) to receive from the entity; or

 (ii) to have the entity credit to the recipient, or otherwise deal with on the recipient’s behalf or as the recipient directs;

  an amount (the attributable amount) reasonably attributable to the covered part.

Note: If the recipient not a foreign resident, the entity is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12395.

 (5) The amount the entity must withhold is:

 (6) The rate is:

 (a) if the recipient is a resident of an *information exchange country:

 (i) 22.5% for *fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to the first income year starting on or after the first 1 July after the day on which the Tax Laws Amendment (Election Commitments No. 1) Act 2008 receives the Royal Assent; or

 (ii) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to the following income year; or

 (iii) 7.5% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting before 1 July 2012; or

 (iv) 15% for fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust) in relation to later income years starting on or after 1 July 2012; or

 (v) 10% for fund payments to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust in relation to the income years starting on or after 1 July 2012; or

 (b) otherwise—30%.

 (7) An entity is a resident of an *information exchange country if:

 (a) the entity is a resident of that country for the purposes of the taxation laws of that country; or

 (b) if there are no taxation laws of that country applicable to the entity or the entity’s residency status cannot be determined under those laws:

 (i) for an individual—the individual is ordinarily resident in that country; or

 (ii) for another entity—the entity is incorporated or formed in that country and is carrying on a business in that country.

 (8) An amount required to be withheld under subsection (4) must be withheld:

 (a) if the recipient is so entitled when the entity receives the payment—immediately after receipt; or

 (b) if the recipient becomes so entitled at a later time—immediately after the later time.

Meaning of custodian

 (9) An entity is a custodian if the entity is *carrying on a *business that consists predominantly of providing a custodial or depository service (as defined by section 766E of the Corporations Act 2001) pursuant to an *Australian financial services licence.

Exceptions

 (10) This section does not apply:

 (a) to a company unless the company would, apart from section 12420, be acting in the capacity as *agent for the recipient; or

 (b) to an amount paid or received by an entity to the extent that no *managed investment trust withholding tax is payable in respect of the amount or an amount reasonably attributable to the amount.

12395  Requirement to give notice or make information available

Managed investment trusts and custodians

 (1) An entity that is a *managed investment trust or a *custodian must comply with subsection (2) if:

 (a) the entity makes a payment to another entity (the recipient) from which an amount would have been required to be withheld under section 12385 or subsection 12390(1) if the payment had been made to an entity covered by section 12410; and

 (b) an amount is not required to be withheld from the payment because the recipient is not an entity covered by section 12410.

Note: An entity may be covered by section 12410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia.

 (2) The entity must:

 (a) give to the recipient a written notice containing the details specified in subsection (3); or

 (b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years.

 (3) The notice must be given, or the details must be made available on a website, before or at the time when the payment is made and:

 (a) must specify the part of the payment from which an amount would have been so required to have been withheld; and

 (aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and

 (b) must specify the income year of the *managed investment trust to which that part relates.

Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12415.

Other entities

 (4) An entity that is not a *managed investment trust or a *custodian must comply with subsection (5) if:

 (a) the entity receives a payment; and

 (b) another entity (also the recipient) is or becomes entitled:

 (i) to receive from the entity; or

 (ii) to have the entity credit to the recipient, or otherwise deal with on the recipient’s behalf or as the recipient directs;

  an amount attributable to the payment; and

 (c) the entity would have been required to withhold an amount from the payment under subsection 12390(4) if the recipient had been a foreign resident; and

 (d) an amount is not required to be withheld from the payment because the recipient is not a foreign resident.

 (5) The entity must:

 (a) give to the recipient a written notice containing the details specified in subsection (6); or

 (b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years.

 (6) The notice must be given, or the details must be made available on a website, before or at the time when the amount is paid or credited to the recipient, or is dealt with on the recipient’s behalf or as the recipient directs, and:

 (a) must specify the part of the payment referred to in paragraph (4)(a) from which an amount would have been so required to have been withheld; and

 (aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and

 (b) must specify the income year of the *managed investment trust to which that part relates.

Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12415.

12400  Meaning of managed investment trust

 (1) A trust is a managed investment trust in relation to an income year if:

 (a) at the time the trustee of the trust makes the first *fund payment in relation to the income year, or at an earlier time in the income year:

 (i) the trustee of the trust was an Australian resident; or

 (ii) the central management and control of the trust was in Australia; and

 (b) the trust is not a trust covered by subsection (2) (trading trust etc.) in relation to the income year; and

 (c) a substantial proportion of the investment management activities carried out in relation to the trust in respect of all of the following assets of the trust are carried out in Australia throughout the income year:

 (i) assets that are situated in Australia at any time in the income year;

 (ii) assets that are *taxable Australian property at any time in the income year;

 (iii) assets that are *shares, units or interests listed for quotation in the official list of an *approved stock exchange in Australia at any time in the income year; and

 (d) at the time the payment is made, the trust is a managed investment scheme (within the meaning of section 9 of the Corporations Act 2001); and

 (e) at the time the payment is made:

 (i) the trust is covered by section 12401 (trusts with wholesale membership); or

 (ii) if the trust is not covered by section 12401—the trust is registered under section 601EB of the Corporations Act 2001; and

 (f) the trust satisfies, in relation to the income year:

 (i) if, at the time the payment is made, the trust is registered under section 601EB of the Corporations Act 2001 and is covered by section 12401—either or both of the widelyheld requirements in subsections 12402(1) and 12402A(1); or

 (ii) if, at the time the payment is made, the trust is so registered and is not covered by section 12401—either or both of the widelyheld requirements in subsections 12402(1A) and 12402A(1); or

 (iii) if, at the time the payment is made, the trust is not so registered and is covered by section 12401—the widelyheld requirements in subsection 12402(1); and

 (g) the trust satisfies the closelyheld restrictions in subsection 12402B(1) in relation to the income year; and

 (h) if the trust is covered by section 12401 at the time the payment is made—it satisfies the licensing requirements in section 12403 in relation to the income year.

Trading unit trust or other trust carrying on trading business etc. cannot be managed investment trust

 (2) A trust is covered by this subsection in relation to an income year if:

 (a) in the case of a unit trust—the trust is a trading trust for the purposes of Division 6C in Part III of the Income Tax Assessment Act 1936 in relation to the income year; or

 (b) in any other case—the trust at any time in the income year:

 (i) carried on a trading business (within the meaning of that Division); or

 (ii) controlled, or was able to control, directly or indirectly, the affairs or operations of another person in respect of the carrying on by that other person of a trading business (within the meaning of that Division).

Crown entities, etc.

 (3) For the purposes of paragraphs (1)(e) and (f), treat an entity as registered under section 601EB of the Corporations Act 2001 at the time the payment is made if at that time the trust is operated by:

 (a) an entity that would, but for subsection 5A(4) of that Act (about the Crown not being bound by Chapter 6CA or 7 of that Act), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme; or

 (b) an entity that:

 (i) is a *whollyowned subsidiary of an entity of a kind mentioned in paragraph (a); and

 (ii) would, but for any instrument issued by ASIC under that Act that has effect in relation to the entity and operation of the scheme mentioned in paragraph 12400(1)(d), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme.

Startup and winddown phases

 (4) Treat the requirements in paragraphs (1)(f) and (g) as being satisfied if:

 (a) the trust is created during the period:

 (i) starting 6 months before the start of the income year; and

 (ii) ending at the end of the income year; or

 (b) the trust ceases to exist during the income year, and was a *managed investment trust (disregarding paragraph (a)) in relation to the previous income year.

12401  Trusts with wholesale membership

  A trust is covered by this section at a time if, at that time:

 (a) the trust is not required to be registered in accordance with section 601ED of the Corporations Act 2001 (whether or not it is actually so registered) because of subsection 601ED(2) of that Act (no product disclosure statement required) or because it is operated or managed by an entity covered by subsection 12403(2) (Crown entities); and

 (b) the total number of entities that had become a *member of the trust because a financial product or a financial service was provided to, or acquired by, the entity as a retail client (within the meaning of sections 761G and 761GA of the Corporations Act 2001) is no more than 20; and

 (c) the entities mentioned in paragraph (b) have a total *MIT participation interest in the trust of no more than 10%.

12402  Widelyheld requirements—ordinary case

 (1) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 12400(1)(a) is made, the trust has at least 25 *members.

 (1A) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 12400(1)(a) is made:

 (a) units in the trust are listed for quotation in the official list of an *approved stock exchange in Australia; or

 (b) the trust has at least 50 *members (ignoring objects of a trust).

 (2) For the purposes of subsection (1) and paragraph (1A)(b), determine the number of *members of the trust as follows:

 (a) first, by applying the rules in subsection (4), identify:

 (i) the members of the trust that are not entities covered by subsection (3); and

 (ii) the members of the trust that are entities covered by subsection (3);

 (b) next, work out the number of members mentioned in subparagraph (a)(i);

 (c) next:

 (i) work out the *MIT participation interest in the trust of each entity mentioned in subparagraph (a)(ii); and

 (ii) for each of those entities, multiply the total of its MIT participation interest in the trust by 50 and round the result upwards to the nearest whole number; and

 (iii) work out the total of the results of subparagraph (ii) for all of those entities;

 (d) next, work out the total of the results of paragraphs (b) and (c).

 (3) This subsection covers the following kinds of entity:

 (a) a *life insurance company;

 (b) a *complying superannuation fund, a *complying approved deposit fund or a *foreign superannuation fund, being a fund that has at least 50 *members;

 (c) a *pooled superannuation trust that has at least one member that is a complying superannuation fund that has at least 50 members;

 (d) a *managed investment trust in relation to the income year;

 (e) an entity:

 (i) that is recognised under a *foreign law as being used for collective investment by pooling the contributions of its members as consideration to acquire rights to benefits produced by the entity; and

 (ii) that has at least 50 members; and

 (iii) the contributing members of which do not have daytoday control over the entity’s operation;

 (f) an entity, the principal purpose of which is to fund pensions (including disability and similar benefits) for the citizens or other contributors of a foreign country, if:

 (i) the entity is a fund established by an *exempt foreign government agency; or

 (ii) the entity is established under a foreign law for an exempt foreign government agency; or

 (iii) the entity is a *whollyowned subsidiary of an entity mentioned in subparagraph (i) or (ii);

 (g) an investment entity that satisfies all of these requirements:

 (i) the entity is whollyowned by one or more *foreign government agencies, or is a whollyowned subsidiary of one or more foreign government agencies;

 (ii) the entity is established using only the public money or public property of the foreign government concerned;

 (iii) all economic benefits obtained by the entity have passed, or are expected to pass, to the foreign government concerned;

 (h) an entity established and whollyowned by an *Australian government agency, if the capital of the entity, and returns from the investment of that capital, are used for the primary purpose of meeting statutory government liabilities or obligations (such as superannuation liabilities and liabilities arising from compensation or workcover claims);

 (i) an entity of a kind similar to an entity mentioned in the preceding paragraphs of this subsection as specified in the regulations.

 (4) The rules are as follows:

 (a) if an entity that is not a trust holds interests in the trust indirectly, through a *chain of trusts:

 (i) treat the entity as a member of the trust; and

 (ii) do not treat a trust in the chain of trusts as a member of the trust;

 (b) do not treat an object of the trust as a member of the trust;

 (ba) if the trust is mentioned in subparagraph 12400(1)(e)(i) (trusts with wholesale membership)—do not treat an individual as a member of the trust (other than an individual who became a member of the trust because a financial product or a financial service was provided to, or acquired by, the individual as a wholesale client (within the meaning of section 761G of the Corporations Act 2001));

 (c) the rules in subsection (6).

 (5) For the purposes of paragraph (4)(a), treat an entity covered by subsection (3) as an entity that is not a trust.

 (6) The rules are as follows:

 (a) treat the following entities as together being one entity:

 (i) an individual;

 (ii) each of his or her relatives;

 (iii) each entity acting in the capacity of nominee of an individual mentioned in subparagraph (i) or (ii);

 (b) treat the following entities as together being one entity (the notional entity):

 (i) an entity that is not an individual;

 (ii) each entity acting in the capacity of nominee of the entity mentioned in subparagraph (i).

 (7) For the purposes of subsection (4), if the entity mentioned in subparagraph (6)(b)(i) is an entity covered by subsection (3), treat the notional entity as an entity covered by subsection (3).

12402A  Widelyheld requirements for registered MIT—special case for entities covered by subsection 12402(3)

 (1) The trust satisfies the requirements in this subsection in relation to the income year if:

 (a) one or more entities covered by subsection 12402(3) have a total *MIT participation interest in the trust of more than 25% at the time the payment mentioned in paragraph 12400(1)(a) is made; and

 (b) at no time in the income year does an entity (other than an entity covered by subsection 12402(3)) have a MIT participation interest in the trust of more than 60%.

 (2) For the purposes of paragraphs (1)(a) and (b):

 (a) if:

 (i) an entity covered by subsection 12402(3) has a *MIT participation interest (the first interest) in the trust; and

 (ii) another entity covered by subsection 12402(3) also has a MIT participation interest (the second interest) in the trust;

  disregard the second interest to the extent that it arises through the existence of the first interest; and

 (b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts—do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.

 (3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 12402(3) as an entity that is not a trust.

 (4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12402(6).

12402B  Closelyheld restrictions

 (1) The trust satisfies the requirements in this subsection in relation to the income year unless, at any time in the income year, any of the following situations exist:

 (a) for a trust mentioned in subparagraph 12400(1)(e)(i) (trusts with wholesale membership)—10 or fewer persons have a total *MIT participation interest in the trust of 75% or more;

 (b) if paragraph (a) does not apply—20 or fewer persons have a total MIT participation interest in the trust of 75% or more;

 (c) a foreign resident individual has a MIT participation interest in the trust of 10% or more.

 (2) For the purposes of paragraphs (1)(a) and (b):

 (a) if an entity covered by subsection 12402(3) has a *MIT participation interest in the trust—treat that entity as not having a MIT participation interest in the trust; and

 (b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts:

 (i) if the entity is covered by subsection 12402(3)—do not treat it as having a MIT participation interest in the trust; and

 (ii) do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.

 (3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 12402(3) as an entity that is not a trust.

 (4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12402(6).

12403  Licensing requirements for unregistered MIS

 (1) The trust satisfies the requirements in this section in relation to the income year if, at the time the payment mentioned in paragraph 12400(1)(a) is made (the time of the first fund payment for the income year):

 (a) the trust is operated or managed by:

 (i) a financial services licensee (within the meaning of section 761A of the Corporations Act 2001) holding an Australian financial services licence whose licence covers it providing financial services (within the meaning of section 766A of that Act) to wholesale clients (within the meaning of section 761G of that Act); or

 (ii) an authorised representative (within the meaning of section 761A of that Act) of such a financial services licensee; or

 (b) the trust is operated or managed by an entity covered by subsection (2); or

 (c) the trust is operated or managed by an entity that:

 (i) is a *whollyowned subsidiary of an entity covered by subsection (2); and

 (ii) is an entity covered by subsection (3).

 (2) An entity is covered by this subsection if it would, but for subsection 5A(4) of that Act (about the Crown not being bound by Chapter 6CA or 7 of that Act), be required under the Corporations Act 2001 to be a financial services licensee (within the meaning of section 761A of that Act).

 (3) An entity is covered by this subsection if it would, but for any instrument issued by ASIC under that Act that has effect in relation to the entity and the operation of the scheme mentioned in paragraph 12400(1)(d), be required under the Corporations Act 2001 to be a financial services licensee (within the meaning of section 761A of that Act).

12404  MIT participation interest

 (1) An entity has a MIT participation interest in a trust if the entity, directly or indirectly:

 (a) holds, or has the right to *acquire, interests representing a percentage of the value of the interests in the trust; or

 (b) has the control of, or the ability to control, a percentage of the rights attaching to *membership interests in the trust; or

 (c) has the right to receive a percentage of any distribution of income that the trust may make.

 (2) The MIT participation interest of the entity in the trust is the greatest of the percentages mentioned in paragraphs (1)(a), (b) and (c).

12405  Meaning of fund payment

 (1) The object of this section is to ensure that the total of the *fund payments that the trustee of a trust makes in relation to an income year equals, as nearly as practicable, the net income of the trust for the income year, disregarding these amounts (excluded amounts):

 (a) a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to, or exempted from, a requirement to withhold under Subdivision 12F;

 (b) interest (as so defined) that is subject to, or exempted from, such a requirement;

 (c) a *royalty that is subject to, or exempted from, such a requirement;

 (d) a *capital gain or *capital loss from a *CGT event that happens in relation to a *CGT asset that is not *taxable Australian property;

 (e) amounts that are not from an *Australian source;

and disregarding deductions relating to excluded amounts.

 (2) Work out as follows how much of a payment (the actual payment) made by the trustee of a trust in relation to an income year is a fund payment in relation to that year:

Method statement

Step 1. Reduce the actual payment by so much of it that is attributable to excluded amounts.

Step 2. Work out what it is reasonable to expect will be the *net income of the trust for the income year:

 (a) disregarding excluded amounts, expected excluded amounts and deductions relating to those amounts; and

 (b) on the basis that a *capital gain from *taxable Australian property of the trust that was or would be reduced under step 3 of the method statement in subsection 1025(1) of the Income Tax Assessment Act 1997 were double the amount it actually is.

Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to:

 (a) the object of this section; and

 (b) the step 1 amount; and

 (c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and

 (d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year.

 (3) The expected *net income of the trust and the expected amounts of future *fund payments are to be worked out on the basis of the trustee’s knowledge when the actual payment is made.

 (4) However, an amount is not a fund payment in relation to the income year unless it is paid:

 (a) during the income year; or

 (b) within 3 months after the end of the income year; or

 (c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 months) allowed by the Commissioner.

 (5) The Commissioner may allow a longer period as mentioned in paragraph (4)(c) only if the Commissioner is of the opinion that the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.

12410  Entity to whom payment is made

 (1) An entity (the recipient) is covered by this section for a payment made to it by another entity (the payer) if:

 (a) according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, the recipient has an address outside Australia; or

 (b) the payer is authorised to make the payment to a place outside Australia.

 (2) However, a recipient is not covered by this section for a payment if, at the time the payment was made, a *business the recipient carries on is carried on at or through an *Australian permanent establishment and the payment is attributable to that establishment.

12415  Failure to give notice or make information available: administrative penalty

  An entity that:

 (a) is required to give a notice, or make details available on a website, under section 12395 in relation to:

 (i) a payment made to another entity; or

 (ii) an amount paid or credited to, or dealt with on behalf of or as directed by, another entity; and

 (b) fails to comply with that section;

is liable to pay to the Commissioner a penalty equal to the amount that would have been required to be withheld under this Subdivision (disregarding subsection 12385(5) and paragraph 12390(10)(b)) in relation to amounts attributable to the payment or amount if the notice had been given or the details had been made available.

Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.

12420  Agency rules

 (1) This section applies to:

 (a) a payment (the first payment) made to an entity (the first entity) in the capacity as *agent for another entity; and

 (b) another payment made by the first entity to the extent that it is reasonably attributable to the first payment.

 (2) This Subdivision has effect as if the first entity were not an *agent in relation to the payments.

Note: As a result of subsection (2), an agent may be required to withhold amounts under this Subdivision.

12425  Meaning of clean building managed investment trust

 (1) A trust is a clean building managed investment trust in relation to an income year if during the income year:

 (a) it is a *managed investment trust in relation to the income year; and

 (b) it holds one or more *clean buildings (including the land on which the buildings are situated); and

 (c) it does not derive assessable income from any *taxable Australian property (other than from the clean buildings or assets that are reasonably incidental to those buildings).

5% safe harbour for certain income reasonably incidental to a clean building

 (2) A trust is not a *clean building managed investment trust in relation to an income year if the assessable income of the trust that is derived from assets that are reasonably incidental to *clean buildings is greater than 5% of the assessable income of the trust that is derived from clean buildings.

 (3) The regulations may specify kinds of assets that are, or are not, reasonably incidental to *clean buildings for the purposes of this section.

12430  Meaning of clean building

 (1) A building is a clean building if:

 (a) the construction of the building commenced on or after 1 July 2012; and

 (b) it satisfies the requirements in subsections (3) and (4).

 (2) For the purpose of subsection (1):

 (a) the construction of the building is taken to have commenced at the time the works on the lowest level (including any basement level) of the building commence; and

 (b) the construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced.

 (3) A building satisfies the requirements in this subsection if:

 (a) the building is a commercial building that is any of the following (or is a combination of any of the following):

 (i) an office building;

 (ii) a hotel for use wholly or mainly to provide shortterm accommodation for travellers;

 (iii) a shopping centre; or

 (b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.

 (4) A building satisfies the requirements in this subsection if:

 (a) the building:

 (i) has, and continues to maintain at all times during the income year, at least a 5 Star Green Star rating as certified by the Green Building Council of Australia; or

 (ii) has, and continues to maintain at all times during the income year, at least a 5.5 star energy rating as accredited by the National Australian Built Environment Rating System (NABERS); or

 (b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.

 (5) For the purposes of subsection (4), if:

 (a) a building has previously satisfied the requirements in that subsection; and

 (b) the building then fails to satisfy the requirements for a period (the noncompliance period); and

 (c) within 180 days after the first day of that failure, the building again satisfies the requirements;

treat the building as having satisfied the requirements during the noncompliance period.

Division 13Alienated personal services payments

Table of sections

131 Object of this Division

135 Payment to the Commissioner in respect of alienated personal services payments

1310 Alienated personal services payments

1315 Personal services payment remitters

1320 Time for payments to Commissioner for alienated personal services payments made during 200001

131  Object of this Division

  The object of this Division is to ensure the efficient collection of income tax (and other liabilities) on any *personal services income included in an individual’s assessable income under Division 86 of the Income Tax Assessment Act 1997 by:

 (a) putting *personal services entities receiving *alienated personal services payments in a position similar to their position if amounts were withheld from the payments under Division 12; but

 (b) doing so in a way that enables them to comply with their obligations without having to withhold amounts separately from each payment.

Note: Under Division 86 of the Income Tax Assessment Act 1997 (about alienation of personal services income), an individual’s personal services income that is gained or produced by another entity is in some cases included in the individual’s assessable income. Payments of this income by the entity might not be caught by Division 12.

135  Payment to the Commissioner in respect of alienated personal services payments

Obligation to pay amounts

 (1) A *personal services entity must pay an amount of tax to the Commissioner if:

 (a) it receives an *alienated personal services payment that relates to an individual’s personal services income; and

 (b) it receives the payment during a *PAYG payment period for which it is a *personal services payment remitter.

Working out the amounts

 (2) Use this method statement to work out the amount:

Method statement

Step 1. Identify the payments that the *personal services entity makes to the individual during the period mentioned in paragraph (1)(b) that are *withholding payments covered by section 1235.

Step 2. Identify the amounts that:

 (a) are included in the individual’s assessable income under section 8615 of the Income Tax Assessment Act 1997; and

 (b) relate to *alienated personal services payments the entity receives during that period.

Step 3. Work out the sum of all the amounts that Division 12 would require the entity to withhold in respect of that period if both of these were taken into account:

 (a) the payments identified in step 1; and

 (b) the amounts identified in step 2, as if they were payments of salary covered by section 1235.

Step 4. Work out the sum of all the amounts withheld under section 1235 from the payments identified in step 1.

Step 5. Subtract the sum under step 4 from the sum under step 3.

Example: For the PAYG payment period of 1 April 2001 to 30 June 2001, NewIT Pty. Ltd. received amounts totalling $18,000 that were Ron’s personal services income. NewIT does not conduct a personal services business.

 During the period, NewIT paid Ron $3,000 in salary. This is a withholding payment covered by section 1235 (step 1).

 $15,000 of the amount NewIT received is included in Ron’s assessable income under section 8615 of the Income Tax Assessment Act 1997 (step 2).

 If NewIT had paid the $15,000 in salary to Ron within 14 days after the end of the PAYG payment period, the amount that NewIT would have had to withhold under Division 12 on the total amount of $18,000 would have been $4,000 (step 3).

 NewIT withheld $500 from the salary payment of $3,000, as required by section 1235 (step 4).

 On the basis of these facts, the amount NewIT must pay to the Commissioner (step 5) is:

 (3) Subject to subsections (4) and (5), the *personal services entity must pay the amount to the Commissioner by the end of the 21st day after the end of the *PAYG payment period.

Note: A different rule applies for alienated personal services payments that large withholders and medium withholders make during the 200001 income year. See section 1320.

 (4) If:

 (a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *PAYG payment period; and

 (b) the personal services entity’s PAYG payment period is a *quarter;

the entity must pay that amount to the Commissioner as shown in the table:

 

Payments by *deferred BAS payers

Item

If paragraph (4)(a) applies to the *quarter ending on:

the amount for this quarter must be paid by the end of:

1

30 September

the following 28 October

2

31 December

the following 28 February

3

31 March

the following 28 April

4

30 June

the following 28 July

 (5) If:

 (a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *PAYG payment period; and

 (b) the personal services entity’s PAYG payment period is a month;

the entity must pay that amount to the Commissioner:

 (c) by the end of the 28th day of the month following that period unless the PAYG payment period is a December; or

 (d) by the end of the 28th day of the next February if the PAYG payment period is a December.

1310  Alienated personal services payments

  An alienated personal services payment is a payment (including a payment in the form of a *noncash benefit) that a *personal services entity receives and that relates to an amount that:

 (a) is included in an individual’s assessable income under Division 86 of the Income Tax Assessment Act 1997; or

 (b) would be so included but for the fact that the entity received the income in the course of conducting a *personal services business.

For valuation of noncash benefits, see sections 21 and 21A of the Income Tax Assessment Act 1936.

1315  Personal services payment remitters

General

 (1) A *personal services entity is a personal services payment remitter for a *PAYG payment period if, in the income year preceding that period:

 (a) the entity’s *ordinary income or *statutory income included a person’s *personal services income; and

 (b) the entity was not conducting a *personal services business.

Businesses not previously receiving personal services income

 (2) A *personal services entity is a personal services payment remitter for a *PAYG payment period if:

 (a) the entity’s *ordinary income or *statutory income did not include an individual’s *personal services income in any income year preceding that period; and

 (b) it is reasonable to expect that, in the income year during which the period occurs, the entity’s income will include a person’s *personal services income that the entity will not have received in the course of conducting a *personal services business.

 (3) It is not reasonable to expect that the *personal services entity will receive a person’s *personal services income in the course of conducting a *personal services business if it is reasonable to expect that:

 (a) the entity will receive at least 80% of that income from the same entity (or one entity and its *associates); and

 (b) the entity will not meet the results test under section 8718 of the Income Tax Assessment Act 1997.

Personal services business determinations taking effect

 (4) However, a *personal services entity is not a personal services payment remitter for a *PAYG payment period if, during that period or an earlier PAYG payment period in the same income year, a *personal services business determination relating to the entity takes effect.

1320  Time for payments to Commissioner for alienated personal services payments made during 200001

 (1) Subject to subsection (2), if:

 (a) a *personal services entity must, under section 135, pay an amount for *alienated personal services payments it received during a particular *PAYG payment period; and

 (b) the period ends in a *quarter in the *financial year starting on 1 July 2000;

the payment must be paid to the Commissioner by the end of the 21st day after the end of the quarter.

 (2) If:

 (a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *quarter; and

 (b) the quarter ends on 31st March or 30th June of 2001;

the payment must be paid to the Commissioner by the end of the 28th day after the end of that quarter.

Division 14Noncash benefits, and accruing gains, for which amounts must be paid to the Commissioner

Table of sections

141 Object of this Subdivision

145 Provider of noncash benefit must pay amount to the Commissioner if payment would be subject to withholding

1410 Dividend, interest or royalty received, for a foreign resident, in the form of a noncash benefit

1415 Payer can recover amount paid to the Commissioner

1450 Object of this Subdivision

1455 Liability for TFN withholding tax

1460 Investment body may recover TFN withholding tax from investor

1465 Application of rules in Division 18

1475 Overpayment of TFN withholding tax

1485 Other laws do not exempt from TFN withholding tax

Subdivision 14ANoncash benefits

141  Object of this Subdivision

  The object of this Subdivision is:

 (a) to put entities that provide *noncash benefits, and entities that receive them, in a position similar to their position under Division 12 if payments of money had been made instead of the noncash benefits being provided; and

 (b) in that way, to prevent entities from avoiding their obligations under Division 12 by providing noncash benefits.

145  Provider of noncash benefit must pay amount to the Commissioner if payment would be subject to withholding

 (1) An entity (the payer) must pay an amount to the Commissioner before providing a *noncash benefit to another entity (the recipient) if Division 12 would require the payer to withhold an amount (the notionally withheld amount) if, instead of providing the benefit to the recipient, the payer made a payment to the recipient in money equal to the *market value of the benefit when the benefit is provided.

 (2) The amount to be paid to the Commissioner is equal to the notionally withheld amount.

Example: Nick is a building contractor who has entered into a voluntary agreement with Mike for the purposes of section 1255. Nick proposes to give Mike his old utility van (whose market value is $1,000) as payment for work Mike has done for him over a fortnight.

 If Nick were instead to pay Mike $1,000, Nick would have had to withhold $203 under Division 12 (in accordance with withholding rates current at the time).

 This section requires Nick to pay $203 to the Commissioner before giving the van to Mike.

 (3) This section does not apply to providing:

 (a) a *fringe benefit; or

 (b) a benefit that is an exempt benefit under the Fringe Benefits Tax Assessment Act 1986; or

 (c) a benefit that would be an exempt benefit under that Act if paragraphs (d) and (e) of the definition of employer in subsection 136(1) of that Act were omitted; or

 (d) a benefit constituted by the acquisition of an *ESS interest *under an employee share scheme to which Subdivision 83AB or 83AC of the Income Tax Assessment Act 1997 applies.

1410  Dividend, interest or royalty received, for a foreign resident, in the form of a noncash benefit

  If:

 (a) an entity (the payer) receives in the form of a *noncash benefit:

 (i) a *dividend of a company; or

 (ii) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936); or

 (iii) a *royalty; and

 (b) section 12215, 12250 or 12285 would have required the payer to withhold an amount if the dividend, interest or royalty had been a payment in money;

the payer must pay that amount to the Commissioner before providing the benefit (or part of it) to another entity.

1415  Payer can recover amount paid to the Commissioner

 (1) The payer may recover from the recipient as a debt an amount that the payer has paid to the Commissioner under section 145.

 (2) If the payer has paid an amount to the Commissioner under section 1410, the payer may:

 (a) if the payer has provided all of the benefit to another entity— recover the amount from that other entity as a debt; or

 (b) if the payer has provided a part of the benefit to another entity—recover from that other entity as a debt the corresponding proportion of the amount paid to the Commissioner.

 (3) If the payer can recover an amount from another entity under this section, the payer is entitled to set the amount off against debts due by the payer to the other entity.

Subdivision 14BAccruing gains

1450  Object of this Subdivision

  The object of this Subdivision is to put the parties to a *Part VA investment with an accruing gain in a position similar to what would have been their position under Subdivision 12E (Payments where TFN or ABN not quoted) if the *investment body had paid the gain in money to the *investor at the end of the income year.

1455  Liability for TFN withholding tax

 (1) *TFN withholding tax is payable if:

 (a) in relation to a *Part VA investment, an amount (the accrued gain) is included in the *investor’s assessable income for an income year under section 159GQ of the Income Tax Assessment Act 1936 (about gains accruing on securities); and

 (b) the investment:

 (i) is of a kind mentioned in item 1 or 2 of the table in subsection 202D(1) of that Act; or

 (ii) is of a kind mentioned in item 3 of that table and is nontransferable; and

 (c) the term of the investment does not end during the income year; and

 (d) section 12140 would have required the *investment body to withhold an amount (the TFN withholding amount) from a payment of the accrued gain to the investor, if the investment body had made the payment at the end of the income year and section 12150 had not been enacted.

Note: Section 202D of the Income Tax Assessment Act 1936 lists the investments in connection with which tax file numbers are to be quoted.

 (2) The amount of *TFN withholding tax is equal to the TFN withholding amount.

 (3) The *TFN withholding tax is payable jointly and severally by the *investor and the *investment body.

 (4) However, if the *investment body is the Commonwealth or an *untaxable Commonwealth entity:

 (a) the *TFN withholding tax is payable by the *investor; and

 (b) the investor is taken to have authorised the investment body to pay the TFN withholding tax on the investor’s behalf.

 (5) The *TFN withholding tax is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(a).

Note 1: When it is due and payable, the TFN withholding tax is payable to the Commissioner: see paragraph 2555(1)(b).

Note 2: An entity by whom it is payable must pay it to the Commissioner in accordance with Subdivision 16B: see subsection 1670(3). If any of it remains unpaid, the entity is liable to pay general interest charge: see section 1680.

Note 3: The Commissioner may defer the time at which TFN withholding tax becomes due and payable: see section 25510.

 (6) The adoption (under section 18 of the Income Tax Assessment Act 1936) of an accounting period ending on a day other than 30 June is disregarded for the purposes of:

 (a) this section; and

 (b) the application of Division 16E of Part III of that Act for the purposes of this section.

1460  Investment body may recover TFN withholding tax from investor

 (1) The *investment body may recover from the *investor as a debt any of the *TFN withholding tax that it pays.

 (2) The *investment body is entitled to set off an amount that it can recover from the *investor under this section against:

 (a) a debt due by it to the investor; or

 (b) an amount that is accruing to the investor, or stands to the investor’s credit, in respect of the *Part VA investment, even if the amount is not yet due.

1465  Application of rules in Division 18

  These provisions:

 (a) subsection 1815(1) and sections 1820 and 1825 (about credits for amounts withheld from withholding payments); and

 (b) section 1880 (about refunds when exemption declaration not given);

apply as if any of the *TFN withholding tax that has been paid were an amount withheld under subsection 12140(1) from a *withholding payment covered by that subsection and made to the *investor during:

 (c) unless the *investor has adopted (under section 18 of the Income Tax Assessment Act 1936) an accounting period ending on a day other than 30 June—the income year referred to in paragraph 1455(1)(a); or

 (d) if the investor has adopted such an accounting period—the income year in which the TFN withholding tax is paid.

Note: Unless the investor has adopted such an accounting period, the credit under section 1815, 1820 or 1825 will be in respect of the income year before the one in which the TFN withholding tax is paid.

1475  Overpayment of TFN withholding tax

  If *TFN withholding tax has been overpaid:

 (a) the Commissioner must refund the amount overpaid; and

 (b) the *investor is not entitled to a credit under section 1815, 1820 or 1825 in respect of the amount overpaid.

1485  Other laws do not exempt from TFN withholding tax

 (1) A provision of a law passed before the commencement of this section that purports to exempt an entity from liability to pay *TFN withholding tax, or to pay taxes that include TFN withholding tax, does not exempt that entity from liability to pay TFN withholding tax.

 (2) A provision of a law passed at or after the commencement of this section that purports to exempt an entity from liability to pay taxes under the laws of the Commonwealth, or to pay certain taxes under those laws that include *TFN withholding tax, is not to be interpreted as exempting the entity from liability to pay TFN withholding tax, unless it specifically mentions TFN withholding tax.

Subdivision 14CShares and rights under employee share schemes

Table of sections

14155 Liability for TFN withholding tax (ESS)

14160 Employer may give individual tax file numbers to provider

14165 Provider may recover TFN withholding tax (ESS) from individual

14170 Application of rules in Division 18

14175 Overpayment of TFN withholding tax (ESS)

14180 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

14155  Liability for TFN withholding tax (ESS)

 (1) Tax (TFN withholding tax (ESS)) imposed by the Income Tax (TFN Withholding Tax (ESS)) Act 2009 is payable if:

 (a) a company (the provider) provides one or more *ESS interests to an individual under an *employee share scheme; and

 (b) as a result, an amount is included in the individual’s assessable income under Division 83A of the Income Tax Assessment Act 1997 for an income year (taking into account subsection (2) of this section); and

 (c) the individual has quoted neither of the following to the provider before the end of the income year:

 (i) if the individual acquired the interests in relation to any services provided to the provider, or to a *subsidiary of the provider, in the course or furtherance of an *enterprise *carried on by the individual—the individual’s *ABN;

 (ii) in any case—the individual’s *tax file number.

 (2) For the purposes of paragraph (1)(b), disregard section 83A35 of the Income Tax Assessment Act 1997 (about reducing the amount included in the individual’s assessable income).

Note: Disregard the 30 day rule in subsections 83A115(3) and 83A120(3) of the Income Tax Assessment Act 1997 for the purposes of this Subdivision: see subsection 3925(6) in this Schedule.

 (3) The *TFN withholding tax (ESS) is payable by the provider.

 (4) The *TFN withholding tax (ESS) is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(b).

Note 1: When it is due and payable, the TFN withholding tax (ESS) is payable to the Commissioner: see paragraph 2555(1)(b).

Note 2: The provider must pay the TFN withholding tax (ESS) to the Commissioner in accordance with Subdivision 16B: see subsection 1670(4). If any of it remains unpaid, the provider is liable to pay general interest charge: see section 1680.

Note 3: The Commissioner may defer the time at which TFN withholding tax (ESS) becomes due and payable: see section 25510.

14160  Employer may give individual tax file numbers to provider

 (1) The individual is taken to have authorised a *subsidiary (the employer) of the provider to inform the provider of the individual’s *tax file number if:

 (a) the individual has made a *TFN declaration in relation to the employer; and

 (b) some or all of the *ESS interests mentioned in paragraph 14155(1)(a) were provided to the individual in relation to the individual’s employment by the employer.

 (2) If the employer does so, the individual is taken, for the purposes of this Subdivision and Division 392 (Employee share scheme reporting), to have quoted his or her *tax file number to the provider.

14165  Provider may recover TFN withholding tax (ESS) from individual

 (1) The provider may recover from the individual as a debt any of the *TFN withholding tax (ESS) the provider pays.

 (2) The provider is entitled to set off an amount that the provider can recover from the individual under this section against a debt due by the provider to the individual.

14170  Application of rules in Division 18

  These provisions:

 (a) subsection 1815(1) (about credits for amounts withheld from withholding payments); and

 (b) sections 1865 and 1870 (about refunds of amounts withheld in error);

apply as if any of the *TFN withholding tax (ESS) that has been paid were an amount withheld under section 1235 from a *withholding payment made to the individual and covered by that section.

14175  Overpayment of TFN withholding tax (ESS)

  If *TFN withholding tax (ESS) has been overpaid:

 (a) the Commissioner must refund the amount overpaid; and

 (b) the individual is not entitled to a credit under section 1815 in respect of the amount overpaid.

14180  Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

  The following provisions of the Income Tax Assessment Act 1997 have effect for the purposes of this Subdivision in the same way as they have for the purposes of Division 83A of that Act:

 (a) section 83A130 (about takeovers and restructures);

 (b) section 83A305 (about associates);

 (c) section 83A320 (about trusts);

 (d) section 83A325 (about relationships similar to employment);

 (e) section 83A335 (about stapled securities);

 (f) section 83A340 (about indeterminate rights).

Division 15Working out the amount to withhold

Table of Subdivisions

 Guide to Division 15

15A Working out how much to withhold

15B Withholding schedules and regulations

15C Declarations

Guide to Division 15

151  What this Division is about

This Division is mainly about how to work out how much an entity must withhold under Division 12.

In most cases, the entity will need to use either the Commissioner’s withholding schedules or the regulations.

The entity will also need to take into account a TFN declaration or declaration under section 1550 it has been given because, under the schedules and regulations, the declaration may affect how to calculate the amount to withhold.

This Division also deals with when an individual can make such a declaration (other than a TFN declaration) so as to change the amount that must be withheld from payments to the individual.

Subdivision 15AWorking out how much to withhold

Table of sections

1510 How much to withhold

1515 Variation of amounts required to be withheld

1510  How much to withhold

 (1) The amount that Subdivision 12B, 12C or 12D requires to be withheld from a payment is to be worked out under the withholding schedules made under section 1525. However, if the regulations prescribe how the amount is to be worked out, then it is to be worked out under the regulations.

Note 1: A TFN declaration, declaration under section 1550 or voluntary agreement may affect how much is required to be withheld under the withholding schedules or regulations.

Note 2: The Commissioner may vary an amount required to be withheld. See section 1515.

 (2) The amount that Subdivision 12E, 12F, 12FA, 12FAA, 12FB or 12G (except one covered by section 12325) requires to be withheld from a payment is to be worked out under the regulations.

Note 1: The amount that section 12325 requires to be withheld is worked out under that section.

Note 2: The Commissioner may vary an amount required to be withheld. See section 1515.

 (3) The amount that Subdivision 12H requires to be withheld from a payment or receipt is worked out under subsection 12385(2), 12390(2) or 12390(5).

1515  Variation of amounts required to be withheld

 (1) The Commissioner may, for the purposes of meeting the special circumstances of a particular case or class of cases, vary the *amount required to be withheld by an entity from a *withholding payment (except a withholding payment covered by section 12140, 12145, 12175 or 12180 or Subdivision 12FC or 12H). If the Commissioner does so, the amount is varied accordingly.

Note 1: Section 12140 is about a payment arising from an investment where the recipient does not quote its tax file number (or, in some cases, its ABN).

Note 2: Sections 12175 and 12180 are about a payment of the income of a closely held trust to a beneficiary, where the beneficiary does not quote the beneficiary’s tax file number.

Note 3: Section 12145 is about an investor becoming presently entitled to income of a unit trust.

Note 3A: Subdivision 12FC is about the Seasonal Labour Mobility Program.

Note 4: Subdivision 12H is about distributions of managed investment trust income.

 (2) The Commissioner’s power to vary an amount includes the power to reduce the amount to nil.

 (3) A variation must be made by a written notice:

 (a) if it applies to a particular entity—that is given to that entity; or

 (b) if it applies to a class of entities—that is given to each of the entities, or a copy of which is published in the Gazette.

Subdivision 15BWithholding schedules and regulations

Table of sections

1525 Commissioner’s power to make withholding schedules

1530 Matters to be considered when making withholding schedules

1535 Regulations about withholding

1525  Commissioner’s power to make withholding schedules

 (1) For the purposes of collecting income tax and the other liabilities referred to in paragraphs 111(b), (ca), (da) and (db), the Commissioner may make one or more withholding schedules specifying the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity:

 (a) from a *withholding payment covered by Subdivision 12B, 12C or 12D; or

 (b) an *alienated personal services payment to which Division 13 applies.

 (2) A withholding schedule may deal differently with:

 (a) different payments; and

 (b) different circumstances of the recipients of those payments; and

 (c) different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

 (3) The Commissioner may withdraw a withholding schedule.

 (4) A withholding schedule, or the withdrawal of a withholding schedule:

 (a) only applies if a notice of it is published in the Gazette; and

 (b) only applies in relation to payments made after the day the notice is published, or after such later day as is specified by the Commissioner in the notice.

 (5) The Commissioner must make each withholding schedule publicly available.

1530  Matters to be considered when making withholding schedules

  The Commissioner must have regard to the following matters when making a withholding schedule:

 (a) the rates of income tax as specified in the Income Tax Rates Act 1986;

 (b) the rates of *Medicare levy as specified in the Medicare Levy Act 1986;

 (ca) the percentages specified in section 15420 (about repayments of accumulated HELP debt) of the Higher Education Support Act 2003 for any financial year starting on or after 1 July 2005;

 (da) the percentages specified in section 1061ZZFD (about repayments of accumulated FS debts) of the Social Security Act 1991 for any financial year starting on or after 1 July 2006;

 (db) the percentages specified in section 12ZLC (about repayments of accumulated FS debts) of the Student Assistance Act 1973 for any financial year starting on or after 1 July 2006;

 (d) any prescribed *tax offsets;

 (e) the family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999);

 (f) the periods in respect of which *withholding payments are made;

 (g) any other prescribed matter.

1535  Regulations about withholding

 (1) For the purposes of collecting income tax and the other liabilities referred to in section 111, the regulations may specify the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity from a *withholding payment covered by Division 12 (except one covered by section 12325).

 (2) The regulations may deal differently with:

 (a) different payments; and

 (b) different circumstances of the recipients of those payments; and

 (c) different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

Subdivision 15CDeclarations

Table of sections

1550 Declarations

1550  Declarations

Declarations about prescribed matters

 (1) An individual who:

 (a) expects to receive a *withholding payment covered by Subdivision 12B, 12C or 12D, or an *alienated personal services payment to which Division 13 applies, from an entity; and

 (b) wishes to have a prescribed matter relating to the individual’s income tax or other liability referred to in paragraph 111(b), (ca), (da) or (db) taken into account by the entity in working out the *amount required to be withheld from the payment;

may give the entity a declaration about the matter in the *approved form.

When declarations under subsection (1) can’t be given

 (2) The individual cannot give a declaration under subsection (1) unless:

 (a) a *TFN declaration is in effect between the individual and the entity, or a *voluntary agreement covers the payment; and

 (b) if the individual has given another entity a declaration on a prescribed matter—that declaration is not in effect.

Declarations changing information given in TFN declaration

 (3) If:

 (a) an individual has given a *TFN declaration to an entity; and

 (b) the individual made a statement about a prescribed matter in the TFN declaration; and

 (c) the individual’s circumstances change in relation to the matter;

the individual may give the entity a declaration about the matter in the *approved form.

Regulations

 (4) The regulations may prescribe:

 (a) the matters about which a declaration under subsection (1) or (3) may be given; and

 (b) when a declaration under subsection (1) or (3) starts or ceases to be in effect; and

 (c) when a declaration under subsection (1) or (3) is taken to have been given.

 (5) If:

 (a) an individual gives an entity a declaration under subsection (1) or (3) about a matter; and

 (b) the individual’s circumstances change in relation to the matter;

the regulations may also prescribe when the individual must give the entity a new declaration about the matter.

Division 16Payer’s obligations and rights

Table of Subdivisions

 Guide to Division 16

16A To withhold

16B To pay withheld amounts to the Commissioner

16BA To be registered

16C To provide information

16D Additional rights and obligations of entity that makes a payment

Guide to Division 16

161  What this Division is about

This Division sets out the obligations and rights of an entity required to withhold an amount under Division 12, or to pay an amount to the Commissioner under Division 13 or 14.

 Note: The entity may also have obligations under other legislation. See, for example, the obligation to keep records under section 262A of the Income Tax Assessment Act 1936.

Subdivision 16ATo withhold

Table of sections

When to withhold

165 When to withhold an amount

1620 Payer discharged from liability to recipient for amount withheld

Penalties for not withholding

1625 Failure to withhold: offence

1630 Failure to withhold: administrative penalty for entity other than exempt Australian government agency

1635 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty

1640 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment

1643 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.

When to withhold

165  When to withhold an amount

  If Division 12 requires an entity to withhold an amount from a payment, the entity must do so when making the payment.

Note 1: An entity is required to withhold an amount under section 12145 when an investor becomes presently entitled to income of a unit trust.

Note 1A: A trustee of a closely held trust is required to withhold an amount under section 12180 when a beneficiary is presently entitled to unpaid income of the trust.

Note 2: If section 12215, 12250 or 12285, or subsection 12390(4), requires an entity to withhold an amount from a payment received by the entity, the entity must do so at the time required by that provision.

1620  Payer discharged from liability to recipient for amount withheld

  An entity that:

 (a) withholds an amount as required by Division 12; or

 (b) pays to the Commissioner an amount as required by Division 13 or 14;

is discharged from all liability to pay or account for that amount to any entity except the Commissioner.

Note: The entity may be required to refund the amount in some circumstances. See Subdivision 18B.

Penalties for not withholding

1625  Failure to withhold: offence

 (1) An entity must not fail to withhold an amount as required by Division 12.

Penalty: 10 penalty units.

Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Note 2: See sections 1630, 1635, 1640 and 1643 for an alternative administrative penalty.

 (2) An entity must not fail to pay to the Commissioner an amount as required by Division 13 or 14.

Penalty: 10 penalty units.

Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Note 2: See sections 1630, 1635, 1640 and 1643 for an alternative administrative penalty.

 (3) An offence against subsection (1) or (2) is a strict liability offence.

Note: For strict liability, see section 6.1 of the Criminal Code.

 (4) If a person is convicted of an offence in relation to:

 (a) a failure by that person or someone else to withhold an amount as required by Division 12; or

 (b) a failure by that person or someone else to pay to the Commissioner an amount as required by Division 13 or 14;

the court may order the convicted person to pay to the Commissioner an amount up to the *amount required to be withheld. The court may so order in addition to imposing a penalty on the convicted person.

1630  Failure to withhold: administrative penalty for entity other than exempt Australian government agency

  An entity (except an *exempt Australian government agency) that:

 (a) fails to withhold an amount as required by Division 12; or

 (b) fails to pay an amount to the Commissioner as required by Division 13 or 14;

is liable to pay to the Commissioner a penalty equal to that amount.

Note 1: An entity may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner’s determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).

Note 2: Division 298 in this Schedule contains machinery provisions for administrative penalties.

1635  Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty

 (1) An *exempt Australian government agency that:

 (a) fails to withhold an amount as required by Division 12; or

 (b) fails to pay to the Commissioner an amount as required by Division 14;

is liable to pay to the Commissioner a penalty of 20 penalty units.

Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Note 2: Division 298 in this Schedule contains machinery provisions for administrative and civil penalties.

Exception

 (4) This section does not apply in relation to an *amount required to be withheld from a *withholding payment covered by Subdivision 12F (about dividend, interest or royalty payment) or by Subdivision 12FB (about payments to foreign residents).

1640  Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment

  An *exempt Australian government agency that:

 (a) fails to withhold an amount as required by Division 12 from a *withholding payment covered by Subdivision 12F (about dividend, interest or royalty payment); or

 (b) fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;

is liable to pay to the Commissioner a penalty equal to that amount.

Note 1: An exempt Australian government agency may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner’s determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).

Note 2: Division 298 in this Schedule contains machinery provisions for administrative penalties.

1643  Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.

  An *exempt Australian government agency that:

 (a) fails to withhold an amount as required by Division 12 from a *withholding payment covered by Subdivision 12FB (about payments to foreign residents); or

 (b) fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;

is liable to pay to the Commissioner a penalty equal to that amount.

Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.

Subdivision 16BTo pay withheld amounts to the Commissioner

Table of sections

When and how to pay amounts to the Commissioner

1670 Entity to pay amounts to Commissioner

1675 When amounts must be paid to Commissioner

1680 Penalty for failure to pay within time

1685 How amounts are to be paid

Who is a large, medium or small withholder

1695 Meaning of large withholder

16100 Meaning of medium withholder

16105 Meaning of small withholder

16110 Commissioner may vary withholder’s status downwards

16115 Commissioner may vary withholder’s status upwards

When and how to pay amounts to the Commissioner

1670  Entity to pay amounts to Commissioner

 (1) An entity that withholds an amount under Division 12 must pay the amount to the Commissioner in accordance with this Subdivision.

 (2) An entity that must pay an amount to the Commissioner under Division 13 or Subdivision 14A must do so in accordance with section 1685.

 (3) An entity that must pay an amount to the Commissioner under Subdivision 14B must do so in accordance with sections 1680 and 1685.

 (4) An entity that must pay an amount to the Commissioner under Subdivision 14C must do so in accordance with sections 1680 and 1685.

Note: For provisions about collection and recovery of amounts payable to the Commissioner under this Part, see Part 415.

1675  When amounts must be paid to Commissioner

Large withholder

 (1) A *large withholder must pay to the Commissioner as shown in the table an amount it withholds under Division 12 (other than section 12175 or 12180) during a month.

 

Payments by large withholders

Item

If the amount is withheld on this day of week:

It must be paid to the Commissioner on or before:

1

Saturday or Sunday

The second Monday after that day

2

Monday or Tuesday

The first Monday after that day

3

Wednesday

The second Thursday after that day

4

Thursday or Friday

The first Thursday after that day

Medium withholders

 (2) Subject to subsection (2A), a *medium withholder must pay to the Commissioner an amount that it withholds during a month under Division 12 (other than section 12175 or 12180) by the end of the 21st day of the next month.

 (2A) If a *medium withholder:

 (a) withholds an amount during a month under Division 12 (other than section 12175 or 12180); and

 (b) is a *deferred BAS payer on the 21st day of the month (the next month) following that month;

the medium withholder must pay that amount to the Commissioner by the end of the 28th day of:

 (c) the next month unless the amount is withheld during December; or

 (d) the next February if the amount is withheld during December.

Small withholders

 (3) Subject to subsection (4), if a *small withholder withholds an amount under Division 12 (other than section 12175 or 12180) during a month in a *quarter, it must pay the amount to the Commissioner by the end of the 21st day of the month after the end of that quarter.

 (4) If a *small withholder:

 (a) withholds an amount under Division 12 (other than section 12175 or 12180) during a month in a *quarter; and

 (b) is a *deferred BAS payer on the 21st day of the month after the end of that quarter;

the small withholder must pay that amount to the Commissioner as shown in the table:

 

Payments by *deferred BAS payers

Item

If the amount is withheld during the *quarter ending on:

the amount must be paid to the Commissioner by the end of:

1

30 September

the following 28 October

2

31 December

the following 28 February

3

31 March

the following 28 April

4

30 June

the following 28 July

Payment of income of closely held trust

 (5) A trustee must pay to the Commissioner an amount the trustee withholds under section 12175 or 12180 from a payment made during an income year. The trustee must do so:

 (a) by the end of the 28th day of the next month following the day by which the trustee was required to give to the Commissioner a report under subsection 16152(1) for the income year; or

 (b) within a longer period allowed by the Commissioner.

1680  Penalty for failure to pay within time

  If an amount that an entity must pay to the Commissioner under subsection 1670(1), (3) or (4) remains unpaid after the time by which it is due to be paid, the entity is liable to pay *general interest charge on the unpaid amount for each day in the period that:

 (a) started at the beginning of the day by which the unpaid amount was due to be paid; and

 (b) finishes at the end of the last day, at the end of which, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on any of the unpaid amount.

1685  How amounts are to be paid

Large withholder

 (1) A *large withholder must pay to the Commissioner by a means of *electronic payment:

 (a) an amount that it withholds under Division 12; and

 (b) an amount that it pays to the Commissioner under Division 13 or 14.

Note 1: A different rule applies for some large withholders for July and August 2000. See section 16130.

Note 2: A penalty applies if a large withholder fails to pay electronically as required—see section 28820.

Note 3: A large withholder must also pay other tax debts electronically—see section 8AAZMA.

Medium or small withholder

 (2) A *medium withholder or *small withholder must pay to the Commissioner:

 (a) any amount that it withholds under Division 12; and

 (b) any amount that it pays to the Commissioner under Division 13 or 14;

by a means of *electronic payment, or any other means approved in writing by the Commissioner.

Commissioner may vary payment method

 (3) The Commissioner may, with an entity’s agreement, vary the means by which the withholder pays amounts to the Commissioner under this Subdivision. The variation must be by written notice given to the entity.

Who is a large, medium or small withholder

1695  Meaning of large withholder

 (1) An entity is a large withholder for a particular month (the current month) in a *financial year starting on or after 1 July 2001 if:

 (a) it was a *large withholder for June 2001; or

 (b) the *amounts withheld by the entity during a financial year ending at least 2 months before the current month exceeded $1 million; or

 (c) both of the following apply:

 (i) at the end of a financial year (the threshold year) ending at least 2 months before the current month, the entity was one of a number of companies that were at that time all members of the same *whollyowned group;

 (ii) the amounts withheld by those companies during the threshold year exceeded $1 million; or

 (d) the Commissioner determines under section 16115 that the entity is a large withholder for the current month.

Note: Different rules apply for working out who is a large withholder for a month in 200001. See section 16125.

Exception

 (2) However, the entity is not a *large withholder if the Commissioner determines under section 16110 that it is a *medium withholder or a *small withholder for the current month.

16100  Meaning of medium withholder

 (1) An entity is a medium withholder for a particular month (the current month) in a *financial year starting on or after 1 July 2001 if it is not a *large withholder for that month and:

 (a) it was a *medium withholder for June 2001; or

 (b) the *amounts withheld by the entity during a financial year ending before the current month exceeded $25,000; or

 (c) the Commissioner determines under section 16110 or 16115 that the entity is a medium withholder for the current month.

Note: Different rules apply for working out who is a large withholder for a month in 200001. See section 16125.

 (2) However, the entity is not a *medium withholder if the Commissioner determines under section 16110 or 16115 that the entity is a *large withholder or a *small withholder for the current month.

16105  Meaning of small withholder

  An entity is a small withholder for a particular month if:

 (a) there is at least one *amount withheld by the entity during that month; and

 (b) the entity is neither a *large withholder nor a *medium withholder for that month.

16110  Commissioner may vary withholder’s status downwards

 (1) The Commissioner may, by giving written notice to a *withholder:

 (a) make the following determinations:

 (i) a determination that a *large withholder is a *medium withholder or a *small withholder;

 (ii) a determination that a medium withholder is a small withholder; or

 (b) revoke or vary any such determination.

 (2) The notice must state that the determination applies:

 (a) for specified months; or

 (b) for all months from and including a specified month.

 (3) The determination has no effect for a particular month unless the notice is given before that month.

 (4) An entity that would otherwise be a *large withholder or a *medium withholder for a particular month may apply in writing to the Commissioner for a determination under this section.

Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

16115  Commissioner may vary withholder’s status upwards

 (1) The Commissioner may, by giving written notice to a *withholder:

 (a) make the following determinations:

 (i) a determination that a *small withholder is a *medium withholder or a *large withholder;

 (ii) a determination that a medium withholder is a large withholder; or

 (b) revoke or vary any such determination.

 (2) The notice must state that the determination applies:

 (a) for specified months; or

 (b) for all months from and including a specified month.

 (3) A determination that a *small withholder is a *medium withholder has no effect for a particular month unless the notice is given before that month.

 (4) Any other determination under this section has no effect for a month that is earlier than the second month after the month in which the notice is given.

 (5) The Commissioner may, in making a determination under this section, have regard to the following:

 (a) the sum of the amounts that the Commissioner considers to be likely to be the *amounts required to be withheld by the entity in the following 12 months;

 (b) the extent (if any) to which the entity makes or receives *withholding payments that were previously made or received by another entity;

 (c) any failure by the entity to comply with its obligations under this Part;

 (d) any *arrangement that was entered into or carried out for the purpose of lengthening the intervals at which the entity is required to pay to the Commissioner amounts withheld from withholding payments;

 (e) such other matters as the Commissioner considers relevant.

Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

Subdivision 16BATo be registered

Table of sections

Registration of withholders

16140 Withholders must be registered

16141 Registration and cancellation

Branch registration

16142 Branches may be registered

16143 Separate amounts for entities and branches

16144 Cancellation of branch registration

16145 Effect on branches of cancelling the entity’s registration

Registration of withholders

16140  Withholders must be registered

 (1) An entity that must pay an amount to the Commissioner under:

 (a) subsection 1670(1) (about amounts withheld under Division 12); or

 (aa) Division 13 (about payments in respect of alienated personal services payments); or

 (b) Division 14 (about payments in respect of noncash benefits);

must apply to register with the Commissioner.

 (2) The entity must apply in the *approved form by the day on which the entity is first required:

 (a) to withhold an amount under Division 12; or

 (b) to pay an amount to the Commissioner under Division 13 or 14.

However, the Commissioner may allow a longer period for applying.

 (3) An entity that contravenes this section is liable to an administrative penalty of 5 penalty units.

Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Note 2: Division 298 contains machinery provisions for administrative and civil penalties.

16141  Registration and cancellation

  The Commissioner may register an entity or cancel the registration of an entity at any time.

Branch registration

16142  Branches may be registered

 (1) The Commissioner may register a branch of a registered entity if:

 (a) the entity applies, in the *approved form, for registration of the branch; and

 (b) the entity has an *ABN or has applied for one; and

 (c) the Commissioner is satisfied that the branch maintains an independent system of accounting, and can be separately identified by reference to:

 (i) the nature of the activities carried on through the branch; or

 (ii) the location of the branch; and

 (d) the Commissioner is satisfied that the entity is *carrying on an enterprise through the branch, or intends to carry on an enterprise through the branch, from a particular date specified in the application.

A branch that is so registered is a PAYG withholding branch.

Note: A branch may be both a PAYG withholding branch under this Subdivision and a GST branch under the GST Act.

 (2) The Commissioner may register a branch of a *government entity or a *nonprofit subentity if:

 (a) the branch or subentity applies, in the *approved form, for registration; and

 (b) the branch or subentity has an *ABN or has applied for one.

A branch or subentity that is so registered is also a PAYG withholding branch.

16143  Separate amounts for entities and branches

 (1) If an entity has a *PAYG withholding branch, this Part applies to the entity as if the amounts that it must pay to the Commissioner under this Part were separated into the following classes:

 (a) for each such branch of the entity, a class of amounts that relate to the branch; and

 (b) a class of amounts that do not relate to any of the entity’s branches.

Note: This section does not impose any legal obligations on the branches. The entity remains legally responsible under this Part for all amounts that relate to its branches.

 (2) Those amounts are worked out as if the branch were a separate entity and as if:

 (a) all payments made through the branch, from which amounts are required to be withheld under Division 12, were made by that separate entity; and

 (aa) all *alienated personal services payments received through the branch, in respect of which Division 13 requires an amount to be paid to the Commissioner, were received by that separate entity; and

 (b) all noncash benefits provided through the branch, in respect of which Division 14 requires an amount to be paid to the Commissioner, were provided by that separate entity.

16144  Cancellation of branch registration

  The Commissioner must cancel the registration of a *PAYG withholding branch of an entity if the Commissioner is satisfied that the branch does not satisfy paragraph 16142(c) or (d).

16145  Effect on branches of cancelling the entity’s registration

  If an entity’s registration is cancelled, the registration of any *PAYG withholding branches of the entity ceases to have effect.

Subdivision 16CTo provide information

Table of sections

To the Commissioner

16150 Commissioner must be notified of amounts

16152 Annual reports—Withholding payments covered by section 12175

16153 Annual reports—other payments

To recipients of withholding payments

16155 Annual payment summary

16156 Annual payment summary for sections 12175 and 12180

16157 Payment summary for Subdivision 12H

16160 Partyear payment summary

16165 Payment summaries for superannuation lump sums and payments for termination of employment

16166 Payment summary for a departing Australia superannuation payment

16167 Payment summary for payment to recipient who does not quote ABN

16170 Form and content of payment summary

16175 Penalty for not providing payment summary

16180 Commissioner may exempt entity from giving payment summary

16182 Definition of reportable employer superannuation contribution

To the Commissioner

16150  Commissioner must be notified of amounts

  An entity that must pay an amount (even if it is a nil amount) to the Commissioner under:

 (a) subsection 1670(1) (about amounts withheld under Division 12); or

 (aa) Division 13 (about payments in respect of alienated personal services payments); or

 (b) Division 14 (about payments in respect of noncash benefits);

must notify the Commissioner of the amount on or before the day on which the amount is due to be paid (regardless of whether it is paid). The notification must be in the *approved form and lodged with the Commissioner.

16152  Annual reports—Withholding payments covered by section 12175

Reports about withholding payments

 (1) A trustee must give a report to the Commissioner in the *approved form if the trustee made any *withholding payments covered by section 12175 or 12180 (about payments from the income of certain closely held trusts) during an income year.

 (2) The trustee must give the report under subsection (1) to the Commissioner:

 (a) not later than 3 months after the end of the income year; or

 (b) within such further period (if any) as the Commissioner allows.

Reports about trust distributions

 (3) A trustee must give a report to the Commissioner in the *approved form if the trustee would be taken to have made any *withholding payments covered by section 12175 or 12180 during an income year if the relevant beneficiary had not *quoted the beneficiary’s *tax file number as mentioned in paragraph 12175(2)(a) or 12180(2)(a).

Note: The effect of subsection (3) is that the trustee must report amounts distributed to beneficiaries even if the trustee was not required to withhold from those distributions.

 (4) The trustee must give the report under subsection (3) to the Commissioner:

 (a) by the end of the day on which the trustee lodges the trust’s *income tax return for the income year; or

 (b) within such further period (if any) as the Commissioner allows.

Miscellaneous

 (5) Subsections 16153(5), (6) and (7) apply to this section in the same way as they apply to section 16153.

16153  Annual reports—other payments

 (1) An entity must give a report to the Commissioner in the *approved form, not later than 31 October after the end of a *financial year, if during the financial year:

 (a) the entity made any payment from which an amount was required to be withheld under section 12190, Subdivision 12F (other than section 12215, 12250 or 12285), Subdivision 12FA, section 12315 or Subdivision 12FC or 12G; or

 (b) the entity provided any *noncash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to section 12190, Subdivision 12F (other than section 12215, 12250 or 12285), Subdivision 12FA, section 12315 or Subdivision 12G; or

 (c) the entity received any payment from which an amount was required to be withheld under section 12215, 12250, 12285 or 12317; or

 (d) the entity received any noncash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to section 12215, 12250, 12285 or 12317.

 (2) An entity must give a report to the Commissioner in the form required by subsection (3), not later than 14 August after the end of a *financial year, if during the financial year:

 (a) the entity made any payment from which an amount was required to be withheld under Subdivision 12B, 12C or 12D; or

 (aa) the entity received any *alienated personal services payment in respect of which an amount was required to be paid to the Commissioner under Division 13; or

 (b) the entity provided any *noncash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to Subdivision 12B, 12C or 12D; or

 (c) any person has a *reportable fringe benefits amount for the income year ending at the end of the financial year in respect of the person’s employment by the entity; or

 (d) the entity made *reportable employer superannuation contributions in respect of a person’s employment.

 (3) The report under subsection (2) must be either:

 (a) a report in the *approved form; or

 (b) a report consisting of:

 (i) copies of all the summaries that the entity gave in relation to the *financial year under section 16155 in respect of payments, *noncash benefits, *alienated personal services payments, *reportable fringebenefit amounts and *reportable employer superannuation contributions covered by subsection (2) of this section; and

 (ii) an accompanying statement in the approved form.

 (4) An entity must give a report to the Commissioner in the *approved form if the entity is required to withhold amounts under Subdivision 12H in relation to *fund payments made by a particular *managed investment trust (the paying trust) in relation to an income year of that trust.

Note: The entity may be the managed investment trust itself or a custodian or other entity.

 (4A) The report under subsection (4) must be given:

 (a) not later than 14 days after the end of 6 months after the end of the income year of the *managed investment trust in relation to which the relevant *fund payments were made; or

 (b) within a longer period allowed by the Commissioner.

 (5) In applying this section:

 (a) a requirement to pay a nil amount to the Commissioner is to be treated as a requirement to pay an amount to the Commissioner; and

 (b) a requirement to withhold a nil amount is to be treated as a requirement to withhold an amount.

 (6) The Commissioner may, to meet the special circumstances of a particular case or class of cases, vary the requirements of this section.

 (7) A variation must be made by a written notice:

 (a) if it applies to a particular entity— that is given to that entity; or

 (b) if it applies to a class of entities—that is given to each of the entities, or a copy of which is published in the Gazette.

To recipients of withholding payments

16155  Annual payment summary

 (1) Within 14 days after the end of a *financial year, an entity (the payer) must give a *payment summary (and a copy of it) to another entity (the recipient) if:

 (a) during the year the payer made one or more *withholding payments (other than withholding payments covered by section 1285, 12175, 12180, 12190, 12215, 12250, 12285, 12317, 12385 or 12390) to the recipient; or

 (b) during the year the payer received one or more withholding payments covered by section 12215, 12250 or 12285 and, in relation to each of them, the recipient is the foreign resident mentioned in the section; or

 (baa) during the year the payer received one or more withholding payments covered by section 12317 and, in relation to each of them, the recipient is the likely foreign recipient mentioned in the section; or

 (ba) during the year the payer received one or more withholding payments covered by Division 13 and, in relation to each of them, an amount is included in the recipient’s assessable income under Division 86 of the Income Tax Assessment Act 1997; or

 (bb) because of section 8640 of the Income Tax Assessment Act 1997, the payer is taken to have paid salary to the recipient on the last day of the year; or

 (c) the recipient is an individual and has a *reportable fringe benefits amount, for the income year ending at the end of that financial year, in respect of his or her employment (within the meaning of the Fringe Benefits Tax Assessment Act 1986) by the payer; or

 (d) the recipient is an individual and *reportable employer superannuation contributions have been made by the payer, in respect of the individual’s employment, during the year.

 (2) The *payment summary must cover:

 (a) if paragraph (1)(a), (b) or (ba) applies—each of the *withholding payments mentioned in that paragraph, except one covered by a previous payment summary (and a copy of it) given by the payer to the recipient under section 16160; and

 (aa) if paragraph (1)(bb) applies—each of the withholding payments constituted by the salary mentioned in that paragraph, except one covered by a previous payment summary (and a copy of it) given by the payer to the recipient under section 16160; and

 (b) if paragraph (1)(c) applies—the *reportable fringe benefits amount, except so much of it as is covered by a previous payment summary (and a copy of it) given by the payer to the recipient under this section; and

 (c) if paragraph (1)(d) applies—the total of the *reportable employer superannuation contributions, except so much of those contributions as are covered by a previous payment summary given by the payer to the recipient under section 16160.

Parental leave pay or dad and partner pay paid in error

 (3) Despite subsection (2), the *payment summary must not cover a *withholding payment if:

 (a) the withholding payment is a payment of an amount purported to have been paid by way of *parental leave pay or *dad and partner pay; and

 (b) the amount was not lawfully so payable.

 (4) The payer must, within 28 days of becoming aware that the *payment summary covers a *withholding payment to which subsection (3) applies:

 (a) give the recipient an amended payment summary that does not cover the withholding payment; or

 (b) give the recipient notice in the *approved form; or

 (c) give the Secretary (within the meaning of the Paid Parental Leave Act 2010) notice in writing that the payer does not intend to give the recipient an amended payment summary or notice under this subsection.

16156  Annual payment summary for sections 12175 and 12180

 (1) A trustee must give a *payment summary to a beneficiary of the trust, if the trustee made any *withholding payments covered by section 12175 or 12180 to the beneficiary during the income year.

 (2) The *payment summary:

 (a) must cover each of the *withholding payments mentioned in subsection (1); and

 (b) may be in electronic form; and

 (c) must be given:

 (i) not later than 14 days after the day by which the trustee was required to give the Commissioner a report under subsection 16152(1) for the income year; or

 (ii) within a longer period allowed by the Commissioner.

16157  Payment summary for Subdivision 12H

 (1) An entity (the payer) must give a *payment summary to another entity (the recipient) if the payer made *withholding payments covered by section 12385 or 12390 to the recipient in relation to *fund payments made by a particular *managed investment trust (the paying trust) in relation to an income year of that trust.

Note: The entity may be the managed investment trust itself or a custodian or other entity.

 (2) The *payment summary:

 (a) must cover each of the *withholding payments mentioned in subsection (1); and

 (b) may be in electronic form; and

 (c) must be given:

 (i) not later than 14 days after the end of 6 months after the end of the income year of the *managed investment trust in relation to which the relevant *fund payments were made; or

 (ii) within a longer period allowed by the Commissioner.

16160  Partyear payment summary

 (1) An entity (the payer) must give a *payment summary (and a copy of it) to another entity (the recipient) if, not later than 21 days before the end of a *financial year, the recipient asks in writing for a payment summary covering:

 (a) one or more *withholding payments (other than withholding payments covered by section 1285, 12190, 12215, 12250, 12285, 12317, 12385 or 12390) that the payer made to the recipient during the year; or

 (b) one or more withholding payments covered by section 12215, 12250 or 12285, or a part of each such payment, that the payer received during the year for the recipient, if the recipient is the foreign resident mentioned in the section; or

 (ba) one or more withholding payments covered by section 12317, or a part of each such payment, that the payer received during the year for the recipient, if the recipient is the likely foreign recipient mentioned in that section; or

 (c) one or more withholding payments covered by Division 13 that the payer received during the year and that are included in the recipient’s assessable income for the income year under section 8615 of the Income Tax Assessment Act 1997; or

 (d) *reportable employer superannuation contributions made by the payer, in respect of the recipient’s employment, during the financial year;

other than a payment covered by a previous payment summary (and a copy of it) given under this section.

 (2) The payer must comply with the request within 14 days after receiving it, unless the recipient is an individual and has a *reportable fringe benefits amount, for the income year ending at the end of that *financial year, in respect of his or her employment (within the meaning of the Fringe Benefits Tax Assessment Act 1986) by the payer.

 (3) Despite subsection (1), the *payment summary must not cover a *withholding payment if:

 (a) the withholding payment is a payment of an amount purported to have been paid by way of *parental leave pay or *dad and partner pay; and

 (b) at the time the recipient asks for the payment summary, the payer is aware that the amount was not lawfully so payable.

16165  Payment summaries for superannuation lump sums and payments for termination of employment

 (1) Within 14 days after an entity (the payer) makes a payment covered under subsection (2) to a person (the recipient), the entity must:

 (a) give a *payment summary to the recipient that covers the payment (and no other payments); and

 (b) give a copy of the summary to the Commissioner.

 (2) The following payments are covered under this subsection if they are *withholding payments:

 (a) a *superannuation lump sum;

 (b) a payment that is an *employment termination payment or would be one except that it is received more than 12 months after termination of employment, other than a directed termination payment within the meaning of section 8210F of the Income Tax (Transitional Provisions) Act 1997.

16166  Payment summary for a departing Australia superannuation payment

  Within 14 days after an entity (the payer) makes a *departing Australia superannuation payment, the payer must:

 (a) give a *payment summary that covers the payment to the recipient of the payment; and

 (b) give a copy of the summary to the Commissioner.

16167  Payment summary for payment to recipient who does not quote ABN

 (1) An entity (the payer) that makes a *withholding payment covered by section 12190 (about payments to recipients who do not quote their ABN) to another entity (the recipient) must give the recipient a *payment summary (and a copy of it) that covers that payment, unless the *amount required to be withheld from the payment is nil.

 (2) The summary must cover only that payment.

 (3) The payer must give the summary to the recipient when making the payment, or as soon as practicable afterwards.

16170  Form and content of payment summary

 (1) A payment summary (except one relating to section 12175 or 12180 or Subdivision 12H) is a written statement that:

 (a) names the payer and the recipient; and

 (b) if the recipient has given the recipient’s *tax file number or *ABN to the payer—states the tax file number or ABN; and

 (c) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the payer from those withholding payments; and

 (d) specifies the *financial year in which the withholding payments were made; and

 (e) specifies the *reportable fringe benefits amount (if any) that it covers and the income year to which that amount relates; and

 (f) specifies the *reportable employer superannuation contributions (if any) that it covers and the income year to which those contributions relate; and

 (g) is in the *approved form.

 (1AAA) A payment summary relating to section 12175 or 12180 is a statement that:

 (a) names the trustee and the beneficiary; and

 (b) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the trustee from those withholding payments; and

 (c) specifies the income year of the trust to which it relates; and

 (d) is in the *approved form.

 (1AA) A payment summary relating to Subdivision 12H is a statement that:

 (a) names the payer and the recipient; and

 (b) if the recipient has given the recipient’s *tax file number or *ABN to the payer—states the tax file number or ABN; and

 (c) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the payer from those withholding payments; and

 (d) specifies the income year of the relevant *managed investment trust to which it relates.

 (1A) For any of the *withholding payments to which paragraph 16155(2)(aa) applies, paragraph (1)(d) is taken to refer to the *financial year preceding the financial year in which the withholding payments were received.

 (2) The Commissioner may, in writing, require particular information to be included in a *payment summary or a class of payment summaries.

 (3) A *payment summary may consist of 2 or more statements that each complies with subsection (1) and together cover what section 16155, 16156, 16160, 16165, 16166 or 16167 (as appropriate) requires the payment summary to cover.

 (4) The Commissioner may vary any requirements under subsection (1), (1AAA), (2) or (3) by written notice given to an entity. The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.

16175  Penalty for not providing payment summary

 (1) An entity must not fail to comply with any requirements under section 16155, 16156, 16157, 16160, 16165, 16166 or 16167, or subsection 16170(1), (1AAA), (1AA), (2) or (3) (including any requirements varied by the Commissioner under subsection 16170(4)).

Penalty: 20 penalty units.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

 (2) An offence under subsection (1) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

16180  Commissioner may exempt entity from giving payment summary

 (1) The Commissioner may, having regard to the circumstances of a particular case or class of cases, exempt an entity from specified requirements of any of sections 16155 to 16167. If the Commissioner does so, the exemption has effect accordingly.

 (2) An exemption must be made by a written notice:

 (a) if it applies to a particular entity—that is given to that entity; or

 (b) if it applies to a class of entities—that is given to each of the entities, or a copy of which is published in the Gazette.

16182  Definition of reportable employer superannuation contribution

 (1) A reportable employer superannuation contribution, for an individual for an income year, is an amount that has been, is, or will be contributed in respect of the income year:

 (a) by an employer of the individual, or an *associate of the employer, for the individual’s benefit; and

 (b) to a *superannuation fund or an *RSA;

to the extent that either or both of the following paragraphs apply:

 (c) the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the size of the amount;

 (d) the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the way the amount was, is or will be contributed so that his or her assessable income is reduced.

 (2) However, an amount is not a reportable employer superannuation contribution to the extent that it is included in the individual’s assessable income for the income year.

 (3) For the purposes of this section, employer has the expanded meaning given by section 12 of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).

 (4) For the purposes of this section, disregard whether any *superannuation benefits arising from a contribution are payable to a *SIS dependant of the individual if the individual dies before or after becoming entitled to receive the benefits.

 (5) For the purposes of paragraph (1)(c), treat the individual as neither having, nor being able reasonably to be expected to have, the capacity to influence the size of the amount if:

 (a) the employer or *associate is required to contribute the amount by:

 (i) an *industrial instrument; or

 (ii) the rules of a *superannuation fund; and

 (b) the individual does not and did not have, and is not able reasonably to be expected to have or have had, the capacity to influence the content of that instrument or those rules, to the extent that the instrument or rules relate to:

 (i) the requirement to contribute the amount; or

 (ii) the size of the amount.

Subdivision 16DAdditional rights and obligations of entity that makes a payment

Table of sections

16195 Payer’s right to recover amounts of penalty: certain withholding taxes

16195  Payer’s right to recover amounts of penalty: certain withholding taxes

 (1) An entity that has paid an amount of penalty under section 1630, 1635 or 1640 for a *withholding payment covered by:

 (a) Subdivision 12F (about a dividend, interest or royalty payment); or

 (aa) section 12305 (about a departing Australia superannuation payment); or

 (ab) Subdivision 12FC (Seasonal Labour Mobility Program); or

 (b) section 12320 (about a mining payment); or

 (c) Subdivision 12H (about distributions of managed investment trust income);

may recover an amount equal to the amount of penalty from the person liable to pay the *withholding tax, or *mining withholding tax, for the withholding payment.

Note Sections 1630, 1635 and 1640 provide for an administrative penalty for failing to comply with Division 12 or 14.

 (2) Subsection (3) applies if an entity has paid an amount of penalty under section 12415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12395 in relation to an amount (the relevant amount).

 (3) The entity may recover from another entity that is liable to pay *managed investment trust withholding tax in relation to an amount attributable to the relevant amount the lesser of:

 (a) an amount equal to the amount of that tax that the other entity is liable to pay; and

 (b) the amount of the penalty.

Division 18Recipient’s entitlements and obligations

Table of Subdivisions

18A Crediting withheld amounts

18B Refund of certain withheld amounts

18C Recipient’s obligations

18D Directors etc. of noncomplying companies

Subdivision 18ACrediting withheld amounts

Guide to Subdivision 18A

181  What this Subdivision is about

In general, an entity:

 that receives a withholding payment (except one covered by section 12215, 12250 or 12285, Subdivision 12FC, or subsection 12390(4)); or

 that is the foreign resident for which a withholding payment covered by section 12215, 12250 or 12285, Subdivision 12FC, or subsection 12390(4), (or a part of it) is received;

is entitled to a credit for the amount withheld from the withholding payment.

However, if that entity is a partnership or trust, a partner, beneficiary or trustee may be entitled to the credit.

This Subdivision tells you:

 who is entitled to a credit; and

 how to work out the amount of the credit.

How a credit is applied is set out in Division 3 of Part IIB.

Table of sections

General exception

185 No credit for refunded amount

Entitlement to credits: income tax liability

1810 Application of sections 1815, 1820 and 1825

1815 Tax credit for recipient of withholding payments

1820 Tax credit where recipient is a partnership

1825 Tax credit where recipient is a trust

1827 Tax credit for alienated personal services payments

Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program

1830 Credit: dividend, interest or royalty

1832 Credit: amount attributable to fund payment

1833 Credit: Seasonal Labour Mobility Program

1835 Credit: penalty under section 12415, 1630, 1635 or 1640 or related general interest charge

1840 Credit: liability under Part 425

Entitlement to credit: departing Australia superannuation payment

1842 Credit—departing Australia superannuation payment

Entitlement to credit: mining payment

1845 Credit—mining payment

Entitlement to credit: Minerals resource rent tax

1849 Credit—Natural resource payments

Entitlement to credit: Petroleum resource rent tax

1855 Credit—Natural resource payments

General exception

185  No credit for refunded amount

  An entity is not entitled to a credit under this Subdivision for an *amount withheld from a *withholding payment to the extent that the amount must be refunded under Subdivision 18B.

Note: See also Subdivision 18D (PAYG withholding noncompliance tax, which can reverse the economic benefit of a credit of a director, or an associate of a director, of a company that does not comply with its obligations under subsection 1670(1)).

Entitlement to credits: income tax liability

1810  Application of sections 1815, 1820 and 1825

 (1) The rules set out in sections 1815, 1820 and 1825 do not apply to an *amount withheld from a *withholding payment that is covered by Subdivision 12F (about dividend, interest or royalties), Subdivision 12FA (about departing Australia superannuation payments), Subdivision 12FC (Seasonal Labour Mobility Program), section 12320 (about mining payments), Subdivision 12H (about distributions of managed investment trust income) or Division 13 (about alienated personal services payments).

 (2) If an entity withholds an amount from a *withholding payment as required by section 12317, apply sections 1815, 1820 and 1825 in relation to the payment as if the payment had been made to the likely foreign recipient mentioned in section 12317 (instead of to the intermediary mentioned in that section).

 (3) If an entity withholds an amount from a *withholding payment as required by section 12325 (natural resource payments), apply sections 1815, 1820 and 1825 to the payment as if the entity had withheld only so much of that amount as was withheld in respect of tax.

Note 1: Section 1849 provides a credit for amounts withheld in respect of MRRT.

Note 2: Section 1855 provides a credit for amounts withheld in respect of petroleum resource rent tax.

1815  Tax credit for recipient of withholding payments

 (1) An entity is entitled to a credit equal to the total of the *amounts withheld from *withholding payments made to the entity during an income year if an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

 (2) To the extent that the entitlement to a credit is in respect of an *amount withheld from a *withholding payment to which paragraph 16155(2)(aa) applies, the entitlement is treated as arising for the income year preceding the income year in which the withholding payment is made.

1820  Tax credit where recipient is a partnership

 (1) An entity is entitled to a credit in respect of *amounts withheld from *withholding payments made to a partnership during an income year if:

 (a) the entity has an individual interest in the net income or partnership loss of the partnership for that income year that is wholly or partly attributable to those withholding payments; and

 (b) the *income tax return of the partnership for the income year has been lodged with the Commissioner; and

 (c) an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

 (2) The amount of the credit is worked out using the formula:

where:

amounts withheld means the sum of the *amounts withheld from the *withholding payments.

individual interest means so much of the individual interest of the partner as is attributable to the *withholding payments.

net income/partnership loss means so much of the net income or partnership loss for that income year as is attributable to the *withholding payments.

1825  Tax credit where recipient is a trust

 (1) An entity is entitled under subsection (2), (4), (6) or (8) to a credit in respect of *amounts withheld (the amounts withheld) from *withholding payments made to the trustee of a trust during an income year.

Trust—section 97

 (2) A beneficiary of the trust is entitled to a credit if:

 (a) an amount is included in the assessable income of the beneficiary under section 97 of the Income Tax Assessment Act 1936 in respect of a share of the net income of the trust; and

 (b) the share is wholly or partly attributable to the *withholding payments; and

 (c) an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the beneficiary for the income year.

 (3) The amount of the credit is worked out using the formula:

  where:

net income means so much of the net income as is attributable to the *withholding payments.

share of net income means so much of that share of the net income as is attributable to the *withholding payments.

Trust—section 98

 (4) The trustee of the trust is entitled to a credit if:

 (a) under section 98 of the Income Tax Assessment Act 1936 the trustee is liable to be assessed, and to pay income tax, on an amount in respect of a share of the net income of the trust to which a beneficiary is presently entitled; and

 (b) the share is wholly or partly attributable to the *withholding payments; and

 (c) an assessment has been made of that income tax or an assessment has been made that no income tax is payable.

 (5) The amount of the credit is worked out using the formula:

where:

net income means so much of the net income as is attributable to the *withholding payments.

share of net income means so much of that share of the net income as is attributable to the *withholding payments.

Trust—section 99 or 99A

 (6) The trustee of the trust is entitled to a credit under this subsection if:

 (a) under section 99 or 99A of the Income Tax Assessment Act 1936, the trustee is liable to be assessed, and to pay income tax, on the net income of the trust, or on part of it; and

 (b) the net income or that part of it is wholly or partly attributable to the *withholding payments; and

 (c) an assessment has been made of that income tax or an assessment has been made that no income tax is payable.

 (7) The amount of the credit is worked out using the formula:

where:

net income means so much of the net income as is attributable to the *withholding payments.

part of net income means so much of the net income, or of that part of it, as is attributable to the *withholding payments.

Trust—no net income

 (8) If there is no net income of the trust for the income year, the trustee is entitled to a credit equal to the sum of the *amounts withheld from the *withholding payments.

1827  Tax credit for alienated personal services payments

  An entity is entitled to a credit equal to the total of the amounts paid under Division 13 in respect of amounts included in the entity’s assessable income for an income year under section 8615 of the Income Tax Assessment Act 1997 if an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program

1830  Credit: dividend, interest or royalty

 (1) An entity is entitled to a credit if:

 (a) the entity’s *ordinary income or *statutory income includes a *dividend (or a part of it), interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) or a *royalty; and

 (b) the entity has borne all or part of an *amount withheld from the dividend, interest or royalty.

 (2) The amount of the credit is that amount or part.

Note: A taxpayer may also be entitled to a credit in relation to payment of interest under, or in relation to the transfer of, a qualifying security. See section 128NBA of the Income Tax Assessment Act 1936.

1832  Credit: amount attributable to fund payment

 (1) An entity is entitled to a credit if:

 (a) the entity’s *ordinary income or *statutory income includes an amount that is represented by or reasonably attributable to a *fund payment; and

 (b) the entity has borne all or part of an *amount withheld from the payment under Subdivision 12H.

 (2) The amount of the credit is that amount or part.

1833  Credit: Seasonal Labour Mobility Program

 (1) An individual is entitled to a credit if:

 (a) the individual’s *ordinary income or *statutory income includes salary, wages, commission, bonuses or allowances; and

 (b) an amount is withheld from the salary, wages, commission, bonuses or allowances under Subdivision 12FC (about the Seasonal Labour Mobility Program).

 (2) The amount of the credit is the *amount withheld.

1835  Credit: penalty under section 12415, 1630, 1635 or 1640 or related general interest charge

 (1) If an entity has paid:

 (a) an amount of penalty under section 1630 or 1640 to the Commissioner for a *withholding payment covered by Subdivision 12F or 12H; or

 (b) an amount of *general interest charge under section 29825 for the penalty;

the entity liable to pay the *withholding tax for the withholding payment is entitled to a credit equal to the amount of penalty, or general interest charge, as appropriate.

 (1AA) If an entity has paid:

 (a) an amount of penalty under section 1630 or 1635 to the Commissioner for a *withholding payment covered by Subdivision 12FC (Seasonal Labour Mobility Program); or

 (b) an amount of *general interest charge under section 29825 for the penalty;

the entity liable to pay the *Seasonal Labour Mobility Program withholding tax for the withholding payment is entitled to a credit equal to the lesser of:

 (c) the amount of the penalty, or general interest charge, as appropriate; and

 (d) the amount of Seasonal Labour Mobility Program withholding tax (and any general interest charge under section 840910 of the Income Tax Assessment Act 1997) in relation to the withholding payment, reduced by:

 (i) any credits from an application of section 1833 in relation to the withholding payment; and

 (ii) any credits from a previous application of this subsection in relation to the withholding payment.

 (1A) If an entity has paid:

 (a) an amount of penalty under section 12415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12395; or

 (b) an amount of *general interest charge under section 29825 for the penalty;

the entity liable to pay the *managed investment trust withholding tax in relation to the amount (the relevant amount) giving rise to the penalty is entitled to a credit equal to the lesser of:

 (d) the amount of penalty, or general interest charge, as appropriate; and

 (e) the amount of managed investment trust withholding tax (and any general interest charge under section 840810 of the Income Tax Assessment Act 1997) in relation to the relevant amount.

Remission

 (2) If:

 (a) an entity has paid to the Commissioner an amount of penalty mentioned in paragraph (1)(a), (1AA)(a) or (1A)(a); and

 (b) the Commissioner remits the whole or a part of the amount of the penalty under section 29820;

then:

 (c) any credit under subsection (1), (1AA) or (1A) relating to the amount paid to the Commissioner is reduced by the amount that is remitted; and

 (d) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

 (3) If:

 (a) an entity has paid to the Commissioner an amount of *general interest charge mentioned in paragraph (1)(b), (1AA)(b) or (1A)(b); and

 (b) the Commissioner remits the whole or a part of the amount of the charge under section 8AAG;

then:

 (c) any credit under subsection (1), (1AA) or (1A) relating to the amount is reduced by the amount that is remitted; and

 (d) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

1840  Credit: liability under Part 425

 (1) If an entity has paid to the Commissioner:

 (a) an amount of penalty under Subdivision 284C in relation to a *scheme to which paragraph 177C(1)(bc) of the Income Tax Assessment Act 1936 applies for a *withholding payment; or

 (b) an amount of *general interest charge under section 29825 in relation to that amount;

the entity liable to pay the *withholding tax for that withholding payment is entitled to a credit equal to the amount paid by the entity.

Remission

 (2) If:

 (a) an entity has paid an amount under Subdivision 284C in relation to a penalty mentioned in paragraph (1)(a); and

 (b) the Commissioner remits the whole or a part of the amount of the penalty under section 29820;

then:

 (c) any credit under subsection (1) relating to the amount paid by the entity is reduced by the amount that is remitted; and

 (d) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

 (3) If:

 (a) an entity has paid to the Commissioner an amount of *general interest charge mentioned in paragraph (1)(b); and

 (b) the Commissioner remits the whole or a part of the amount of the charge under section 8AAG;

then:

 (c) any credit under subsection (1) relating to the amount is reduced by the amount that is remitted; and

 (d) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

Entitlement to credit: departing Australia superannuation payment

1842  Credit—departing Australia superannuation payment

Credit—amount withheld

 (1) If there is an *amount withheld from a *withholding payment that is covered by section 12305 (departing Australia superannuation payment), the entity liable to pay *withholding tax under section 301175 of the Income Tax Assessment Act 1997 on the payment is entitled to a credit of an amount equal to the amount withheld.

Credit—penalty amount

 (2) If an entity has paid to the Commissioner a penalty amount under section 1630 or 1635 in relation to an *amount required to be withheld under section 12305 (departing Australia superannuation payment), the entity mentioned in subsection (1) is entitled to a credit equal to the penalty amount.

Remission

 (3) If the Commissioner remits the whole or a part of the amount of penalty under section 29820 that has been paid to the Commissioner by the entity:

 (a) any credit that relates to the amount is reduced by the amount that is remitted; and

 (b) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

Entitlement to credit: mining payment

1845  Credit—mining payment

Credit—amount withheld

 (1) If there is an *amount withheld from a *withholding payment that is covered by section 12320 (mining payment):

 (a) if paragraph (b) does not apply— the entity liable to pay *mining withholding tax under section 128V of the Income Tax Assessment Act 1936 on the payment is entitled to a credit of an amount equal to the amount withheld; or

 (b) if, under subsection 128U(4) of that Act, separate mining payments are taken to have been made to, or applied for the benefit of, 2 or more entities because of that payment—each of those entities is entitled to a credit equal to the amount worked out using the formula:

Credit—penalty amount

 (2) If an entity has paid to the Commissioner a penalty amount under section 1630 or 1635 in relation to an *amount required to be withheld under section 12320 (mining payment):

 (a) if paragraph (1)(a) applies—the entity mentioned in that paragraph is entitled to a credit equal to the penalty amount; or

 (b) if paragraph (1)(b) applies—each of the entities mentioned in that paragraph is entitled to a credit of an amount worked out using the formula:

Remission

 (3) If the Commissioner remits the whole or a part of the amount of penalty under section 29820 that has been paid to the Commissioner by the entity:

 (a) any credit that relates to the amount is reduced by the amount that is remitted; and

 (b) the Commissioner must pay to the entity an amount equal to the amount that is remitted.

Entitlement to credit: Minerals resource rent tax

1849  Credit—Natural resource payments

 (1) An entity is entitled to a credit in an *MRRT year if:

 (a) one or more *withholding payments covered by section 12325 (natural resource payments) from which there are *amounts withheld in respect of *MRRT are made to the entity during the MRRT year; and

 (b) an assessment has been made of the MRRT payable, or an assessment has been made that no MRRT is payable, by the entity for the MRRT year.

 (2) The amount of the credit is so much of the total of the *amounts withheld as is withheld in respect of *MRRT.

Entitlement to credit: Petroleum resource rent tax

1855  Credit—Natural resource payments

 (1) An entity is entitled to a credit in a year of tax (within the meaning of the Petroleum Resource Rent Tax Assessment Act 1987) if:

 (a) one or more *withholding payments covered by section 12325 (natural resource payments) from which there are *amounts withheld in respect of *petroleum resource rent tax are made to the entity during the year of tax; and

 (b) an assessment has been made of the petroleum resource rent tax payable, or an assessment has been made that no petroleum resource rent tax is payable, by the entity for the year of tax.

 (2) The amount of the credit is so much of the total of the *amounts withheld as is withheld in respect of *petroleum resource rent tax.

Subdivision 18BRefund of certain withheld amounts

Table of sections

1865 Refund of withheld amounts by the payer to the recipient

1870 Refund of withheld amounts by the Commissioner to the recipient

1880 Refund by Commissioner of amount withheld from payment in respect of investment

1865  Refund of withheld amounts by the payer to the recipient

 (1) An entity (the payer) must refund to another entity (the recipient) an amount if:

 (a) the payer:

 (i) withheld the amount purportedly under Division 12 from a payment made to, or received for, the recipient (whether the amount has been paid to the Commissioner or not); or

 (ia) paid the amount to the Commissioner purportedly under Division 13 for an *alienated personal services payment in relation to which an amount is included in the recipient’s assessable income year under section 8615 of the Income Tax Assessment Act 1997; or

 (ii) paid the amount to the Commissioner purportedly under Division 14 for a *noncash benefit provided to, or received for, the recipient; and

 (b) either:

 (i) the amount was so withheld, or paid to the Commissioner, in error; or

 (ii) in the case of an amount withheld from a payment of an amount purported to have been paid by way of *parental leave pay or *dad and partner pay—the amount paid was not lawfully so payable; and

 (c) either:

 (i) the payer becomes aware of the matter mentioned in paragraph (b); or

 (ii) the recipient applies to the payer for the refund;

  before the end of the *financial year in which the amount was so withheld or paid to the Commissioner; and

 (d) any information requested by the payer under subsection (3) has been given to the payer, or the time for making the request (see subsection (4)) has passed without such a request being made.

 (2) The amount that must be refunded under subsection (1) is a debt recoverable by the recipient from the payer.

Request for tax file number (or in some cases, ABN)

 (3) The payer may request the recipient to give to the payer:

 (a) in any case—the recipient’s *tax file number; or

 (b) in any case—evidence of the basis on which the recipient is taken to have quoted its tax file number to the payer; or

 (c) if the payment or *noncash benefit was in respect of a *Part VA investment made by the recipient in the course or furtherance of an *enterprise carried on by it—the recipient’s *ABN;

if:

 (d) the payment, *alienated personal services payment or noncash benefit was in respect of any of the following provisions:

 (i) Subdivision 12B (payments for work or services);

 (ii) Subdivision 12C (Payments for retirement or because of termination of employment);

 (iii) Subdivision 12D (benefits and compensation payments);

 (iv) section 12140 or 12145 (recipient does not quote tax file number or ABN);

 (v) section 12175 or 12180 (Payment of income of closely held trust where TFN not quoted); and

 (e) when the application for the refund is made, or when the payer otherwise becomes aware of the matter mentioned in paragraph (1)(b) of this section, the payer has a record of none of the following:

 (i) the recipient’s tax file number;

 (ii) the basis on which the recipient is taken to have quoted the tax file number to the payer;

 (iii) if paragraph (c) applies—the recipient’s ABN.

When must the request be made

 (4) The request must be made within 7 working days (of the payer) after the payer receives the application for the refund or after the payer otherwise becomes aware of the matter mentioned in paragraph (1)(b) (as appropriate).

Recovery of refunded amount

 (5) If a payer refunds an amount under subsection (1), the payer may recover from the Commissioner as a debt due to the payer so much of the amount:

 (a) which is withheld as mentioned in subparagraph (1)(a)(i) and paid to the Commissioner, or which is paid to the Commissioner as mentioned in subparagraph (1)(a)(ia) or (ii); and

 (b) which the payer has not recorded as being offset under subsection (6).

Offsetting a refunded amount

 (6) If:

 (a) a payer refunds an amount (the refunded amount) under subsection (1); and

 (b) the amount withheld as mentioned in subparagraph (1)(a)(i) that the payer has paid to the Commissioner, or the amount paid to the Commissioner as mentioned in subparagraph (1)(a)(ia) or (ii), is equal to all or a part of the refunded amount; and

 (c) apart from this subsection, the payer would be required to pay to the Commissioner another amount or amounts under Division 13 or 14 or subsection 1670(1) (the payment to the Commissioner); and

 (d) the payer records in writing that it offsets all or a part of the amount paid to the Commissioner (as mentioned in paragraph (b)) against the payment to the Commissioner;

the payment to the Commissioner is reduced by so much of the amount as the payer so recorded as being offset.

 (7) The payer must not record that it offsets any part of an amount that:

 (a) the payer has previously recorded under subsection (6); or

 (b) the payer has sought to recover from the Commissioner under subsection (5).

1870  Refund of withheld amounts by the Commissioner to the recipient

 (1) An entity (the recipient) may apply in writing to the Commissioner for the refund of an amount if:

 (a) another entity (the payer):

 (i) withheld an amount purportedly under Division 12 from a payment made to, or received for, the recipient; or

 (ia) paid the amount to the Commissioner purportedly under Division 13 for an *alienated personal services payment in relation to which an amount is included in the recipient’s assessable income year under section 8615 of the Income Tax Assessment Act 1997; or

 (ii) paid to the Commissioner an amount purportedly under Division 14 for a *noncash benefit provided to, or received for, the recipient; and

 (b) either:

 (i) the amount was so withheld, or paid to the Commissioner, in error; or

 (ii) in the case of an amount withheld from a payment of an amount purported to have been paid by way of *parental leave pay or *dad and partner pay—the amount paid was not lawfully so payable; and

 (c) section 1865 does not apply because the payer did not become aware of the matter mentioned in paragraph (b), or the recipient did not apply for a refund, as mentioned in subsection 1865(1); and

 (d) if subparagraph (a)(i) applies—the payer has already paid the withheld amount to the Commissioner.

 (2) The Commissioner must refund the amount if the application sets out:

 (a) if the recipient has a *tax file number—that tax file number; or

 (b) if the recipient does not have a tax file number but was taken to have quoted a tax file number to the payer before the amount was withheld or paid to the Commissioner—the basis on which the recipient was taken to have quoted the tax file number; or

 (c) if the payment or *noncash benefit was in respect of a *Part VA investment made by the recipient in the course or furtherance of an *enterprise carried on by it—the recipient’s *ABN;

and the Commissioner is satisfied that it would be fair and reasonable to refund the amount, having regard to:

 (d) the circumstances that gave rise to the withholding obligation (if any); and

 (e) the nature of the matter mentioned in paragraph (1)(b); and

 (f) any other matter the Commissioner considers relevant.

Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

1880  Refund by Commissioner of amount withheld from payment in respect of investment

  The Commissioner must refund to an entity all or part of an *amount withheld from a *withholding payment covered by section 12140 or 12145 that was made to that entity if:

 (a) the entity applies in writing for the refund; and

 (b) the Commissioner is satisfied that the entity was entitled to give *the investment body a declaration under Division 5 of Part VA of the Income Tax Assessment Act 1936 in relation to the *Part VA investment in respect of which the withholding payment was made, but did not do so; and

 (c) the Commissioner is also satisfied it is fair and reasonable to make the refund, having regard to the purposes of this Part and any other matters that the Commissioner considers appropriate.

Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

Subdivision 18CRecipient’s obligations

18100  Obligation to keep payment summary

 (1) An entity that is given a *payment summary and a copy of it in any financial year under this Part must retain the copy for:

 (a) 5 years after the end of that financial year; or

 (b) a shorter period determined by the Commissioner in writing for the entity; or

 (c) a shorter period determined by the Commissioner by legislative instrument for a class of entities that includes the entity.

 (1AA) A determination under paragraph (1)(c) may specify different periods for different classes of entities.

 (1A) An offence under subsection (1) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Subdivision 18DDirectors etc. of noncomplying companies

Table of sections

Object of Subdivision

18120 Object of Subdivision

PAYG withholding noncompliance tax

18125 Directors of noncomplying companies

18130 Directors of noncomplying companies—tax reduced in certain circumstances

18135 Associates of directors of noncomplying companies

18140 Notices

18145 When PAYG withholding noncompliance tax must be paid

18150 General interest charge payable on unpaid PAYG withholding noncompliance tax

18155 Validity of decisions and evidence

18160 Rights of indemnity and contribution

Credits for later compliance

18165 Credits for later compliance—scope

18170 Credits for later compliance—Commissioner must give notice in certain circumstances

18175 Credits for later compliance—Commissioner may give notice

18180 Effect of earlier credits

Other provisions

18185 When Commissioner may give notice

18190 Review of decisions

Object of Subdivision

18120  Object of Subdivision

  The object of this Subdivision is to reverse the economic benefit of a credit under section 1815 (Tax credit for recipient of withholding payment) of a director, or an *associate of a director, of a company if:

 (a) the company does not comply with its obligations under subsection 1670(1) (obligation to pay amounts withheld to the Commissioner); and

 (b) the credit is attributable to *amounts withheld from *withholding payments made by the company to the director or associate;

until the company complies with its obligations.

PAYG withholding noncompliance tax

18125  Directors of noncomplying companies

Liability to pay PAYG withholding noncompliance tax

 (1) An individual must pay *PAYG withholding noncompliance tax in relation to a company for an income year of the individual if:

 (a) the individual is or has been a director (within the meaning of the Corporations Act 2001) of the company; and

 (b) the company was required to pay to the Commissioner under subsection 1670(1) in this Schedule amounts:

 (i) the company withheld from *withholding payments the company made to any entities during the income year of the individual; and

 (ii) to which subsection (2) applies; and

 (c) the company did not pay the total of those amounts to the Commissioner on or before the last day (the noncompliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 1670(1); and

 (d) a credit to which the individual is entitled under section 1815 is attributable to an extent to *amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.

Note: For the purposes of paragraph (1)(d), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 1670(1).

 (2) This subsection applies to *amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day) under subsection 1670(1), if:

 (a) both of the following subparagraphs apply:

 (i) the individual was a director (within the meaning of the Corporations Act 2001) of the company on the payment day;

 (ii) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 1670(1) on or before the payment day; or

 (b) all of the following subparagraphs apply:

 (i) the individual became a director of the company after the payment day;

 (ii) the individual was still a director of the company 30 days after becoming a director;

 (iii) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 1670(1) on or before the last of those 30 days.

Amount of tax

 (3) The amount of the *PAYG withholding noncompliance tax the individual must pay is the lesser of:

 (a) the extent of the credit mentioned in paragraph (1)(d); and

 (b) the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).

18130  Directors of noncomplying companies—tax reduced in certain circumstances

 (1) The amount of the *PAYG withholding noncompliance tax the individual must pay as mentioned in section 18125 is reduced if the Commissioner gives a notice to the individual under this section.

Notice

 (2) The Commissioner must give a written notice to the individual on a day (the reduction notice day) (whether before, on or after the day (if any) the Commissioner gives the individual the relevant notice under section 18140), if the Commissioner is satisfied that:

 (a) because of illness or for some other good reason, it would have been unreasonable to expect the individual to take part, and the individual did not take part, in the management of the company at any time during the period:

 (i) starting on a day on or by which the company was required to pay any of the total mentioned in paragraph 18125(1)(c) to the Commissioner under subsection 1670(1); and

 (ii) ending on the reduction notice day; or

 (b) the individual took all reasonable steps to ensure that one of the following happened:

 (i) the directors (within the meaning of the Corporations Act 2001) of the company caused the company to pay the total of the amounts mentioned in paragraph 18125(1)(c) to the Commissioner;

 (ii) the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001;

 (iii) the directors caused the company to begin to be wound up (within the meaning of that Act);

  or there were no reasonable steps the individual could have taken to ensure that any of those things happened.

 (3) In determining what are reasonable steps for the purposes of paragraph (2)(b), the Commissioner must have regard to:

 (a) when, and for how long, the individual was a director and took part in the management of the company; and

 (b) all other relevant circumstances.

Amount of reduction

 (4) The amount of the reduction is the amount stated in the notice.

 (5) In determining the amount to state in the notice, the Commissioner must have regard to:

 (a) in a case to which paragraph (2)(a) applies—when, and for how long, the individual could not have been expected to take part, and did not take part, in the management of the company; and

 (b) in a case to which paragraph (2)(b) applies—when, and for how long, the individual was a director and took part in the management of the company; and

 (c) in either case—what is fair and reasonable in the circumstances.

Effect of reduction

 (6) The amount of the *PAYG withholding noncompliance tax the individual must pay is treated as always having been that amount as reduced under this section.

18135  Associates of directors of noncomplying companies

Liability to pay PAYG withholding noncompliance tax

 (1) An individual must pay *PAYG withholding noncompliance tax in relation to a company for an income year of the individual if:

 (a) at a time when another individual (the director) was a director (within the meaning of the Corporations Act 2001) of the company, the first individual was an *associate of the director; and

 (b) the company was required to pay to the Commissioner under subsection 1670(1) in this Schedule amounts:

 (i) the company withheld from *withholding payments the company made to any entities during the income year of the individual; and

 (ii) to which subsection (2) of this section applies; and

 (c) the company did not pay the total of those amounts to the Commissioner on or before the last day (the noncompliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 1670(1); and

 (d) subsection (3) or (6) of this section applies; and

 (e) a credit to which the individual is entitled under section 1815 is attributable to an extent to *amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.

Note: For the purposes of paragraph (1)(e), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 1670(1).

 (2) This subsection applies to *amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day) under subsection 1670(1), if:

 (a) all of the following subparagraphs apply:

 (i) the director was a director (within the meaning of the Corporations Act 2001) of the company on the payment day;

 (ii) the individual was an *associate of the director on the payment day;

 (iii) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 1670(1) on or before the payment day; or

 (b) all of the following subparagraphs apply:

 (i) the director became a director of the company after the payment day;

 (ii) the director was still a director of the company 30 days after becoming a director;

 (iii) the individual was an *associate of the director throughout that 30 day period;

 (iv) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 1670(1) on or before the last of those 30 days.

 (3) This subsection applies if the Commissioner is satisfied that:

 (a) because of:

 (i) the individual’s relationship with the director; or

 (ii) a relationship of the individual with the company;

  the individual knew, or could reasonably have been expected to know, of the company’s failure to pay the total of the amounts mentioned in paragraph (1)(c) to the Commissioner; and

 (b) none of the following subparagraphs applies:

 (i) the individual took all reasonable steps to influence the director to cause the company to notify the Commissioner under Subdivision 18C of the relevant *amounts withheld;

 (ii) the individual took all reasonable steps to influence the director to cause one of the events mentioned in subsection (4) to happen, or there were no reasonable steps the individual could have taken to influence the director to cause any of those events to happen;

 (iii) the individual reported the company’s nonpayment to the Commissioner or to another authority with responsibilities relevant to the operation of the company.

Example: Other authorities with responsibilities relevant to the operation of the company could include the Minister, the police, the Australian Securities and Investments Commission or the Building and Construction Industry Commissioner.

 (4) The following are the events:

 (a) the company pays the total of the amounts mentioned in paragraph (1)(c) to the Commissioner;

 (b) an administrator of the company is appointed under section 436A, 436B or 436C of the Corporations Act 2001;

 (c) the company begins to be wound up (within the meaning of that Act).

 (5) In determining what are reasonable steps for the purposes of paragraph (3)(b), have regard to:

 (a) when, and for how long, the individual was an *associate of the director; and

 (b) when, and for how long, the director was a director and took part in the management of the company; and

 (c) all other relevant circumstances.

 (6) This subsection applies if:

 (a) the individual was an employee of the company; and

 (b) the Commissioner is satisfied that the company treated the individual more favourably than it treated other employees of the company.

Amount of tax

 (7) The amount of the *PAYG withholding noncompliance tax the individual must pay is the lesser of:

 (a) the extent of the credit mentioned in paragraph (1)(e); and

 (b) the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).

18140  Notices

Notices

 (1) The Commissioner must not commence proceedings to recover:

 (a) the *PAYG withholding noncompliance tax an individual must pay for an income year in relation to a company as mentioned in section 18125 or 18135; or

 (b) any related *general interest charge payable under section 18150;

unless, after the noncompliance day mentioned in section 18125 or 18135, the Commissioner gives a written notice to the individual under this section.

 (2) The Commissioner may only give the notice if the Commissioner is satisfied, on the basis of information available to the Commissioner, that it is fair and reasonable for the individual to pay *PAYG withholding noncompliance tax in relation to the company for the income year.

 (3) The Commissioner must not give the notice on a day if, on that day:

 (a) the individual; or

 (b) in a case to which section 18135 applies—the director mentioned in that section;

is liable to pay to the Commissioner a penalty under Division 269 because the company has not complied with the obligation mentioned in item 1 of the table in subsection 26910(1) to pay to the Commissioner an *amount withheld to which paragraph 18125(1)(b) or 18135(1)(b) applies.

 (4) The notice must specify:

 (a) the company; and

 (b) the income year; and

 (c) the amount of the *PAYG withholding noncompliance tax the individual must pay.

Effect of compliance between noncompliance day and notice day

 (5) Subsections (6) and (7) apply if:

 (a) the company’s liability to pay the total of the amounts mentioned in paragraph 18125(1)(c) or 18135(1)(c) to the Commissioner is discharged to any extent during the period:

 (i) starting on the day after the noncompliance day; and

 (ii) ending on the day before the day the Commissioner gives the notice under this section to the individual; and

 (b) had all discharges of the company’s liability occurring during that period occurred before the noncompliance day:

 (i) the individual would not have been required to pay the *PAYG withholding noncompliance tax in relation to the company for the income year; or

 (ii) the amount of PAYG withholding noncompliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding noncompliance tax.

 (6) The amount of the *PAYG withholding noncompliance tax the individual must pay is reduced:

 (a) in a case to which subparagraph (5)(b)(i) applies—to nil; or

 (b) otherwise—to the amount of PAYG withholding noncompliance tax the individual would have been required to pay as mentioned in subparagraph (5)(b)(ii).

 (7) The amount of the *PAYG withholding noncompliance tax the individual must pay is treated as always having been that amount as reduced under subsection (6).

18145  When PAYG withholding noncompliance tax must be paid

 (1) The *PAYG withholding noncompliance tax an individual must pay for an income year is due and payable at the earliest time any of the income tax the individual must pay for the *financial year to which the income year relates is due and payable.

Note: Division 5 of the Income Tax Assessment Act 1997 explains how to work out when to pay your income tax.

 (2) For the purposes of subsection (1), if the individual is not required to pay income tax for the *financial year:

 (a) treat the individual as being required to pay income tax for the financial year; and

 (b) if the Commissioner has made an assessment that the income tax the individual is required to pay is nil—treat that assessment as being for an amount greater than nil.

Note: See Part 415 in this Schedule for collection and recovery provisions.

18150  General interest charge payable on unpaid PAYG withholding noncompliance tax

  If an amount of *PAYG withholding noncompliance tax that an individual must pay to the Commissioner remains unpaid after the time by which it is due to be paid, the individual is liable to pay *general interest charge on the unpaid amount of tax for each day in the period that:

 (a) started at the beginning of the day by which the unpaid amount of tax was due to be paid; and

 (b) finishes at the end of the last day, at the end of which, any of the following remains unpaid:

 (i) the unpaid amount of tax;

 (ii) general interest charge on any of the unpaid amount of tax.

18155  Validity of decisions and evidence

 (1) Section 175 of the Income Tax Assessment Act 1936 (validity) applies to a decision of the Commissioner under section 18140 in this Schedule in the same way as it applies to an assessment.

 (2) Section 177 of the Income Tax Assessment Act 1936 (Evidence) applies to a notice under section 18140 in this Schedule in the same way as it applies to a notice of assessment.

18160  Rights of indemnity and contribution

 (1) This section applies if an individual must pay *PAYG withholding noncompliance tax as mentioned in section 18125 or 18135 because a company did not pay an amount to the Commissioner as mentioned in paragraph 18125(1)(c) or 18135(1)(c).

 (2) The individual has the same rights (whether by way of indemnity, subrogation, contribution or otherwise) against the company or anyone else as if:

 (a) the individual had made a payment equal to the amount of the *PAYG withholding noncompliance tax under a guarantee of the liability of the company to pay the amount to the Commissioner; and

 (b) under the guarantee:

 (i) the individual; and

 (ii) every individual to whom subsection (3) applies;

  were jointly and severally liable as guarantors (but only, in the case of an individual to whom subparagraph (ii) of this paragraph applies, to the extent to which subsection (3) applies to the individual); and

 (c) any credit to which the individual mentioned in subsection (1) is entitled under section 18170 or 18175 in relation to the amount of PAYG withholding noncompliance tax were a repayment of the payment mentioned in paragraph (a) of this subsection.

 (3) This subsection applies to an individual to the extent that:

 (a) the individual was a director (within the meaning of the Corporations Act 2001) of the company on the day (the payment day) on or by which the company was required to pay the amount mentioned in subsection (1) to the Commissioner; or

 (b) both of the following subparagraphs apply:

 (i) the individual became a director of the company after the payment day;

 (ii) the individual was still a director of the company 30 days after becoming a director.

 (4) However, subsection (3) does not apply to an individual to the extent that the amount of the *PAYG withholding noncompliance tax the individual must pay in relation to the company for the income year as mentioned in section 18125 is reduced under section 18130.

Credits for later compliance

18165  Credits for later compliance—scope

  Sections 18170, 18175 and 18180 apply if:

 (a) an individual must pay *PAYG withholding noncompliance tax in relation to a company for an income year because the company did not pay to the Commissioner the total of the amounts mentioned in paragraph 18125(1)(c) or 18135(1)(c); and

 (b) the Commissioner gives to the individual a notice under section 18140 on a particular day (the tax notice day) in relation to the PAYG withholding noncompliance tax the individual must pay; and

 (c) on or after the tax notice day, the company’s liability to pay the total of the amounts to the Commissioner is discharged to any extent.

18170  Credits for later compliance—Commissioner must give notice in certain circumstances

Commissioner must give notice to director or associate in certain circumstances

 (1) The Commissioner must give a written notice to the individual on a particular day (the credit notice day) if, had the discharge mentioned in paragraph 18165(c) (and all previous discharges of the company’s liability mentioned in that paragraph) occurred before the tax notice day:

 (a) the individual would not have been required to pay the *PAYG withholding noncompliance tax in relation to the company for the income year; or

 (b) the amount of PAYG withholding noncompliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding noncompliance tax.

Note 1: Subsection 18180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.

Note 2: The amount of PAYG withholding noncompliance tax may be limited by:

(a) the conditions in subsections 18125(1) and (2) or 18135(1) to (6); or

(b) the limits on the amount of the tax in subsection 18125(3) or 18135(7).

Note 3: In working out the actual amount of the tax for the purposes of paragraph (1)(b), have regard to other credits to which the individual is entitled under this section or section 18175. See subsection 18180(1).

Director or associate entitled to credit if Commissioner gives notice

 (2) The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).

 (3) The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.

Amount of credit

 (4) The amount of the credit is the amount stated in the notice.

 (5) In a case to which paragraph (1)(a) applies, the amount stated must be the amount of the *PAYG withholding noncompliance tax.

 (6) In any other case, the amount stated:

 (a) must not exceed the amount of the *PAYG withholding noncompliance tax; and

 (b) must not exceed the amount of the discharge mentioned in paragraph 18165(c); and

 (c) must not be less than the amount by which:

 (i) the amount of the PAYG withholding noncompliance tax; exceeds

 (ii) the amount that would have been the amount of the PAYG withholding noncompliance tax had the discharge mentioned in paragraph 18165(c) (and all previous discharges of the company’s liability mentioned in that paragraph) occurred before the tax notice day.

 (7) In determining the amount to state in the notice in a case to which paragraph (1)(a) does not apply, the Commissioner must have regard to what is fair and reasonable in the circumstances.

18175  Credits for later compliance—Commissioner may give notice

Commissioner may give notice to director or associate

 (1) The Commissioner may give a written notice to the individual on a particular day (the credit notice day).

Note: Subsection 18180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.

Director or associate entitled to credit if Commissioner gives notice

 (2) The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).

 (3) The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.

Amount of credit

 (4) The amount of the credit is the amount stated in the notice.

 (5) The amount stated:

 (a) must not exceed the amount of the *PAYG withholding noncompliance tax; and

Note: In working out the amount of the tax for the purposes of paragraph (5)(a), have regard to other credits to which the individual is entitled under section 18170 or this section. See subsection 18180(1).

 (b) must not exceed the amount of the discharge mentioned in paragraph 18165(c).

Commissioner’s discretion

 (6) In determining:

 (a) whether to give a notice under this section; or

 (b) the amount to state in the notice;

the Commissioner must have regard to what is fair and reasonable in the circumstances.

18180  Effect of earlier credits

 (1) A reference in section 18170 or 18175, or subsection (2) of this section, to the amount of the *PAYG withholding noncompliance tax is treated as being a reference to:

 (a) the amount of the PAYG withholding noncompliance tax; less

Note: The amount of the PAYG withholding noncompliance tax may, in a case to which section 18125 applies, be affected by reductions under section 18130.

 (b) the total of any credits to which the individual is entitled in relation to the amount of PAYG withholding noncompliance tax because of notices given to the individual under section 18170 or 18175 before the credit notice day.

 (2) The Commissioner must not give a written notice to the individual under section 18170 or 18175 if, on the day before the credit notice day, the amount of the *PAYG withholding noncompliance tax is nil.

Other provisions

18185  When Commissioner may give notice

  The Commissioner may give a notice to the individual on a day (the notice day) under section 18130, 18140, 18170 or 18175 if:

 (a) on the notice day, the Commissioner has not given a notice of assessment to the individual for the income year mentioned in section 18125 or 18135; or

 (b) if the notice would:

 (i) in the case of a notice under section 18130—result in the individual being liable to pay *PAYG withholding noncompliance tax or an increased amount of PAYG withholding noncompliance tax; or

 (ii) in the case of a notice under section 18140—result in the Commissioner being able to commence proceedings to recover PAYG withholding noncompliance tax, or an increased amount of PAYG withholding noncompliance tax, from the individual; or

 (iii) in the case of a notice under section 18170 or 18175—reduce the amount of a credit or disentitle the individual to a credit;

  the Commissioner gives the notice no later than 2 years after first giving a notice of assessment to the individual for the income year mentioned in section 18125 or 18135; or

 (c) if the notice would:

 (i) in the case of a notice under section 18130—result in the individual being liable to pay no PAYG withholding noncompliance tax, or a reduced amount of PAYG withholding noncompliance tax; or

 (ii) in the case of a notice under section 18140—result in the Commissioner no longer being able to commence proceedings to recover PAYG withholding noncompliance tax, or result in the Commissioner being able to commence proceedings to recover a reduced amount of PAYG withholding noncompliance tax, from the individual; or

 (iii) in the case of a notice under section 18170 or 18175—increase the amount of a credit or entitle the individual to a credit;

  the Commissioner gives the notice no later than 4 years after first giving a notice of assessment to the individual for the income year mentioned in section 18125 or 18135; or

 (d) in any case—the Commissioner gives the notice:

 (i) to give effect to a decision on a review or appeal; or

 (ii) as a result of an objection made by the individual or pending a review or appeal.

18190  Review of decisions

  An individual to whom the Commissioner gives a notice under section 18140 in relation to an amount of *PAYG withholding noncompliance tax may object, under Part IVC of this Act, against a decision of the Commissioner under section 18130, 18140, 18170 or 18175 in relation to the PAYG withholding noncompliance tax if the individual is dissatisfied with the decision.

Division 20Other matters

Table of Subdivisions

20B Offences

20D Review of decisions

Subdivision 20BOffences

Table of sections

2035 Offences

2040 Joining of charges

2045 Offences that would otherwise be committed by a partnership or unincorporated company

2035  Offences

 (1) A person must not:

 (a) present a document issued by the Commissioner that specifies a person (the specified person); and

 (b) falsely pretend to be the specified person with the intention of obtaining under this Part a credit for, or a payment of, an *amount withheld from a *withholding payment.

 (2) A person must not attempt to obtain for the person a credit under this Part for an *amount withheld from a *withholding payment if:

 (a) the payment is not covered by section 12215, 12250, 12285 or 12317, or subsection 12390(4), and was made to another person; or

 (b) the payment is covered by section 12215, 12250, 12285 or 12317, or subsection 12390(4), and the person is not the foreign resident in respect of which all or a part of the payment is received as mentioned in that provision.

 (3) A person must not, with the intention of obtaining a credit, a payment or any other benefit, present:

 (a) a copy of a *payment summary (except one relating to Subdivision 12H); or

 (b) a document purporting to be a copy of such a payment summary;

which is not a copy duly given to the person.

Penalty: 60 penalty units, or imprisonment for 12 months, or both.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

 (4) A person must not, with the intention of obtaining a credit, a payment or any other benefit, present:

 (a) a *payment summary relating to Subdivision 12H, or a copy of such a payment summary; or

 (b) a document purporting to be such a payment summary or a copy of such a payment summary;

which is not a payment summary, or a copy of a payment summary, duly given to the person.

Penalty: 60 penalty units, or imprisonment for 12 months, or both.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

2040  Joining of charges

 (1) Charges against the same person for a number of offences against this Part may be joined in one complaint, information or summons if those charges:

 (a) are founded on the same facts; or

 (b) form a series of offences of the same or a similar character; or

 (c) are part of a series of offences of the same or similar character.

 (2) Particulars of each offence charged must be set out in a separate paragraph if 2 or more of the charges are included in the same complaint, information or summons.

 (3) If the charges are joined, the charges must be tried together unless the court:

 (a) considers it just that any of the charges should be tried separately; and

 (b) makes an order to that effect.

 (4) If a person is convicted of 2 or more of the offences:

 (a) the court may impose one penalty for both or all of those offences; but

 (b) the penalty must not exceed the sum of the maximum penalties that could be imposed in respect of each offence separately.

2045  Offences that would otherwise be committed by a partnership or unincorporated company

 (1) An offence against this Part that would otherwise be committed by a partnership is taken to have been committed by each partner who:

 (a) aided, abetted, counselled or procured the relevant act or omission; or

 (b) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly, and whether by any act or omission of the partner).

 (2) An offence against this Part that would otherwise be committed by a company that is not incorporated is taken to have been committed by each member of the company’s committee of management who:

 (a) aided, abetted, counselled or procured the relevant act or omission; or

 (b) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly, and whether by any act or omission of the member).