Contents
Schedule 1—Collection and recovery of income tax and other liabilities
Chapter 2—Collection, recovery and administration of income tax
Part 2‑1—Introduction to the Pay as you go (PAYG) system
Division 6—Guide to Parts 2‑5 and 2‑10
6‑1 What Parts 2‑5 and 2‑10 are about
6‑5 The Pay as you go (PAYG) system
6‑10 How the amounts collected are dealt with
Part 2‑5—Pay as you go (PAYG) withholding
Division 10—Guide to Part 2‑5
10‑1 What this Part is about
10‑5 Summary of withholding payments
Division 11—Preliminary matters
11‑1 Object of this Part
11‑5 Constructive payment
Division 12—Payments from which amounts must be withheld
Subdivision 12‑A—General rules
12‑1 General exceptions
12‑5 What to do if more than one provision requires a withholding
12‑7 Division does not apply to alienated personal services payments
12‑10 Division does not apply to non‑cash benefits
12‑20 Application of Division and regulations to non‑share dividends
Subdivision 12‑B—Payments for work and services
12‑35 Payment to employee
12‑40 Payment to company director
12‑45 Payment to office holder
12‑47 Payment to religious practitioners
12‑50 Return to work payment
12‑55 Voluntary agreement to withhold
12‑60 Payment under labour hire arrangement, or specified by regulations
Subdivision 12‑C—Payments for retirement or because of termination of employment
12‑80 Superannuation income streams and annuities
12‑85 Superannuation lump sums and payments for termination of employment
12‑90 Unused leave payments
Subdivision 12‑D—Benefit and compensation payments
12‑110 Social Security or other benefit payment
12‑115 Commonwealth education or training payment
12‑120 Compensation, sickness or accident payment
Subdivision 12‑E—Payments where TFN or ABN not quoted
Payment in respect of investment
12‑140 Recipient does not quote tax file number
12‑145 Investor becoming presently entitled to income of a unit trust
12‑150 Limited application of section 12‑140 to payment under financial arrangement
12‑155 When investor may quote ABN as alternative
12‑160 Investment body unaware that exemption from quoting TFN has stopped applying
12‑165 Exception for fully franked dividend
12‑170 Exception for payments below thresholds set by regulations
Payment of income of closely held trust where TFN not quoted
12‑175 Trustee distributes income of closely held trust
12‑180 Beneficiary becomes presently entitled to income of closely held trust
12‑185 Exception for payments below thresholds set by regulations
Payment for a supply
12‑190 Recipient does not quote ABN
Subdivision 12‑F—Dividend, interest and royalty payments
Dividends
12‑210 Dividend payment to overseas person
12‑215 Dividend payment received for foreign resident
12‑220 Application to part of a dividend
12‑225 Application to distribution by a liquidator or other person
Interest
12‑245 Interest payment to overseas person
12‑250 Interest payment received for foreign resident
12‑255 Interest payment derived by lender in carrying on business through overseas permanent establishment
12‑260 Lender to notify borrower if interest derived through overseas permanent establishment
Royalties
12‑280 Royalty payment to overseas person
12‑285 Royalty payment received for foreign resident
General
12‑300 Limits on amount withheld under this Subdivision
Subdivision 12‑FA—Departing Australia superannuation payments
12‑305 Departing Australia superannuation payment
12‑310 Limits on amount withheld under this Subdivision
Subdivision 12‑FAA—Excess untaxed roll‑over amount
12‑312 Untaxed roll‑over superannuation benefits
12‑313 Limits on amount withheld under this Subdivision
Subdivision 12‑FB—Payments to foreign residents etc.
12‑315 Payment to foreign resident etc.
12‑317 Payment received for foreign resident etc.
12‑319 Exemptions from withholding obligations under this Subdivision
Subdivision 12‑FC—Seasonal Labour Mobility Program
12‑319A Payment to employee
Subdivision 12‑G—Payments in respect of mining on Aboriginal land, and natural resources
Mining on Aboriginal land
12‑320 Mining payment
Natural resources
12‑325 Natural resource payment
12‑330 Payer must ask Commissioner how much to withhold
12‑335 Commissioner may exempt from section 12‑330, subject to conditions
Subdivision 12‑H—Distributions of managed investment trust income
Guide to Subdivision 12‑H
12‑375 What this Subdivision is about
Operative provisions
12‑385 Withholding by managed investment trusts
12‑390 Withholding by custodians and other entities
12‑395 Requirement to give notice or make information available
12‑400 Meaning of managed investment trust
12‑401 Trusts with wholesale membership
12‑402 Widely‑held requirements—ordinary case
12‑402A Widely‑held requirements for registered MIT—special case for entities covered by subsection 12‑402(3)
12‑402B Closely‑held restrictions
12‑403 Licensing requirements for unregistered MIS
12‑404 MIT participation interest
12‑405 Meaning of fund payment
12‑410 Entity to whom payment is made
12‑415 Failure to give notice or make information available: administrative penalty
12‑420 Agency rules
12‑425 Meaning of clean building managed investment trust
12‑430 Meaning of clean building
Division 13—Alienated personal services payments
13‑1 Object of this Division
13‑5 Payment to the Commissioner in respect of alienated personal services payments
13‑10 Alienated personal services payments
13‑15 Personal services payment remitters
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01
Division 14—Non‑cash benefits, and accruing gains, for which amounts must be paid to the Commissioner
Subdivision 14‑A—Non‑cash benefits
14‑1 Object of this Subdivision
14‑5 Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
14‑10 Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit
14‑15 Payer can recover amount paid to the Commissioner
Subdivision 14‑B—Accruing gains
14‑50 Object of this Subdivision
14‑55 Liability for TFN withholding tax
14‑60 Investment body may recover TFN withholding tax from investor
14‑65 Application of rules in Division 18
14‑75 Overpayment of TFN withholding tax
14‑85 Other laws do not exempt from TFN withholding tax
Subdivision 14‑C—Shares and rights under employee share schemes
14‑155 Liability for TFN withholding tax (ESS)
14‑160 Employer may give individual tax file numbers to provider
14‑165 Provider may recover TFN withholding tax (ESS) from individual
14‑170 Application of rules in Division 18
14‑175 Overpayment of TFN withholding tax (ESS)
14‑180 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 84
15‑1 What this Division is about
Subdivision 15‑A—Working out how much to withhold
15‑10 How much to withhold
15‑15 Variation of amounts required to be withheld
Subdivision 15‑B—Withholding schedules and regulations
15‑25 Commissioner’s power to make withholding schedules
15‑30 Matters to be considered when making withholding schedules
15‑35 Regulations about withholding
Subdivision 15‑C—Declarations
15‑50 Declarations
Division 16—Payer’s obligations and rights
Guide to Division 16 91
16‑1 What this Division is about
Subdivision 16‑A—To withhold
When to withhold
16‑5 When to withhold an amount
16‑20 Payer discharged from liability to recipient for amount withheld
Penalties for not withholding
16‑25 Failure to withhold: offence
16‑30 Failure to withhold: administrative penalty for entity other than exempt Australian government agency
16‑35 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty
16‑40 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment
16‑43 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.
Subdivision 16‑B—To pay withheld amounts to the Commissioner
When and how to pay amounts to the Commissioner
16‑70 Entity to pay amounts to Commissioner
16‑75 When amounts must be paid to Commissioner
16‑80 Penalty for failure to pay within time
16‑85 How amounts are to be paid
Who is a large, medium or small withholder
16‑95 Meaning of large withholder
16‑100 Meaning of medium withholder
16‑105 Meaning of small withholder
16‑110 Commissioner may vary withholder’s status downwards
16‑115 Commissioner may vary withholder’s status upwards
Subdivision 16‑BA—To be registered
Registration of withholders
16‑140 Withholders must be registered
16‑141 Registration and cancellation
Branch registration
16‑142 Branches may be registered
16‑143 Separate amounts for entities and branches
16‑144 Cancellation of branch registration
16‑145 Effect on branches of cancelling the entity’s registration
Subdivision 16‑C—To provide information
To the Commissioner
16‑150 Commissioner must be notified of amounts
16‑152 Annual reports—Withholding payments covered by section 12‑175
16‑153 Annual reports—other payments
To recipients of withholding payments
16‑155 Annual payment summary
16‑156 Annual payment summary for sections 12‑175 and 12‑180
16‑157 Payment summary for Subdivision 12‑H
16‑160 Part‑year payment summary
16‑165 Payment summaries for superannuation lump sums and payments for termination of employment
16‑166 Payment summary for a departing Australia superannuation payment
16‑167 Payment summary for payment to recipient who does not quote ABN
16‑170 Form and content of payment summary
16‑175 Penalty for not providing payment summary
16‑180 Commissioner may exempt entity from giving payment summary
16‑182 Definition of reportable employer superannuation contribution
Subdivision 16‑D—Additional rights and obligations of entity that makes a payment
16‑195 Payer’s right to recover amounts of penalty: certain withholding taxes
Division 18—Recipient’s entitlements and obligations
Subdivision 18‑A—Crediting withheld amounts
Guide to Subdivision 18‑A
18‑1 What this Subdivision is about
General exception
18‑5 No credit for refunded amount
Entitlement to credits: income tax liability
18‑10 Application of sections 18‑15, 18‑20 and 18‑25
18‑15 Tax credit for recipient of withholding payments
18‑20 Tax credit where recipient is a partnership
18‑25 Tax credit where recipient is a trust
18‑27 Tax credit for alienated personal services payments
Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program
18‑30 Credit: dividend, interest or royalty
18‑32 Credit: amount attributable to fund payment
18‑33 Credit: Seasonal Labour Mobility Program
18‑35 Credit: penalty under section 12‑415, 16‑30, 16‑35 or 16‑40 or related general interest charge
18‑40 Credit: liability under Part 4‑25
Entitlement to credit: departing Australia superannuation payment
18‑42 Credit—departing Australia superannuation payment
Entitlement to credit: mining payment
18‑45 Credit—mining payment
Entitlement to credit: Petroleum resource rent tax
18‑55 Credit—Natural resource payments
Subdivision 18‑B—Refund of certain withheld amounts
18‑65 Refund of withheld amounts by the payer to the recipient
18‑70 Refund of withheld amounts by the Commissioner to the recipient
18‑80 Refund by Commissioner of amount withheld from payment in respect of investment
Subdivision 18‑C—Recipient’s obligations
18‑100 Obligation to keep payment summary
Subdivision 18‑D—Directors etc. of non‑complying companies
Object of Subdivision
18‑120 Object of Subdivision
PAYG withholding non‑compliance tax
18‑125 Directors of non‑complying companies
18‑130 Directors of non‑complying companies—tax reduced in certain circumstances
18‑135 Associates of directors of non‑complying companies
18‑140 Notices
18‑145 When PAYG withholding non‑compliance tax must be paid
18‑150 General interest charge payable on unpaid PAYG withholding non‑compliance tax
18‑155 Validity of decisions and evidence
18‑160 Rights of indemnity and contribution
Credits for later compliance
18‑165 Credits for later compliance—scope
18‑170 Credits for later compliance—Commissioner must give notice in certain circumstances
18‑175 Credits for later compliance—Commissioner may give notice
18‑180 Effect of earlier credits
Other provisions
18‑185 When Commissioner may give notice
18‑190 Review of decisions
Division 20—Other matters
Subdivision 20‑B—Offences
20‑35 Offences
20‑40 Joining of charges
20‑45 Offences that would otherwise be committed by a partnership or unincorporated company
Subdivision 20‑D—Review of decisions
20‑80 Reviewable decisions
Division 21—Entitlements relating to insolvent ADIs and general insurers
Guide to Division 21 165
21‑1 What this Division is about
Subdivision 21‑A—Treatment of some payments by APRA
21‑5 APRA treated like ADI or general insurance company
Part 2‑10—Pay as you go (PAYG) instalments
Division 45—Instalment payments
Guide to Division 45 168
45‑1 What this Division is about
Subdivision 45‑A—Basic rules
45‑5 Object of this Part
45‑10 Application of Part
45‑15 Liability for instalments
45‑20 Information to be given to the Commissioner by certain payers
45‑25 Penalty for failure to notify Commissioner
45‑30 Credit for instalments payable
Subdivision 45‑B—When instalments are due
45‑50 Liability to pay instalments
45‑60 Meaning of instalment quarter
45‑61 When quarterly instalments are due—payers of quarterly instalments
45‑65 Meaning of instalment month
45‑67 When monthly instalments are due—payers of monthly instalments
45‑70 When annual instalments are due
45‑72 Means of payment of instalment
45‑75 Instalments recoverable in same way as income tax
45‑80 General interest charge on late payment
45‑90 Commissioner may withdraw instalment rate
Subdivision 45‑C—Working out instalment amounts
45‑110 How to work out amount of quarterly instalment on instalment income basis
45‑112 Amount of instalment for quarterly payer who pays on basis of GDP‑adjusted notional tax
45‑114 How to work out amount of monthly instalment
45‑115 How to work out amount of annual instalment
45‑120 Meaning of instalment income
Subdivision 45‑D—Quarterly payers
45‑125 Quarterly payer who pays instalments on the basis of instalment income
45‑130 Quarterly payer who pays on the basis of GDP‑adjusted notional tax
45‑132 Quarterly payer who pays 4 instalments annually on the basis of GDP‑adjusted notional tax
45‑134 Quarterly payer who pays 2 instalments annually on the basis of GDP‑adjusted notional tax
Subdivision 45‑DA—Monthly payers
45‑136 Monthly payer
45‑138 Monthly payer requirement
Subdivision 45‑E—Annual payers
When you start and stop being an annual payer
45‑140 Choosing to pay annual instalments
45‑145 Meaning of instalment group
45‑150 Entity stops being annual payer if involved with GST registration or instalment group
45‑155 Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly
45‑160 Head company of a consolidated group stops being annual payer
Subdivision 45‑F—Varying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income
45‑200 Application
45‑205 Choosing a varied instalment rate
45‑210 Notifying Commissioner of varied instalment rate
45‑215 Credit on using varied rate in certain cases
Subdivision 45‑G—General interest charge payable in certain cases if instalments are too low
45‑225 Effect of Subdivision in relation to monthly payers
45‑230 Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate
45‑232 Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax
45‑233 Reduction in GIC liability under section 45‑232 if shortfall is made up in later instalment
45‑235 Liability to GIC on shortfall in annual instalment
45‑240 Commissioner may remit general interest charge
Subdivision 45‑H—Partnership income
45‑260 Instalment income for a period in which you are in a partnership
Subdivision 45‑I—Trust income included in instalment income of beneficiary
45‑280 Instalment income for a period in which you are a beneficiary of a trust
45‑285 Instalment income includes distributions by certain resident unit trusts
45‑286 Instalment income includes distributions by certain managed investment trusts
45‑287 When trusts are disqualified due to concentrated ownership
45‑288 Resident investment trusts for beneficiaries who are absolutely entitled
45‑290 Exceptions to exclusion of trust capital gains from beneficiary’s instalment income
Subdivision 45‑J—How Commissioner works out your instalment rate and notional tax
45‑320 Working out instalment rate
45‑325 Working out your notional tax
45‑330 Working out your adjusted taxable income
45‑335 Working out your adjusted withholding income
45‑340 Adjusted tax on adjusted taxable income or on adjusted withholding income
Subdivision 45‑K—How Commissioner works out your benchmark instalment rate and benchmark tax
45‑355 When Commissioner works out benchmark instalment rate and benchmark tax
45‑360 How Commissioner works out benchmark instalment rate
45‑365 Working out your benchmark tax
45‑370 Working out your adjusted assessed taxable income for the variation year
45‑375 Adjusted assessed tax on adjusted assessed taxable income
Subdivision 45‑L—How Commissioner works out amount of quarterly instalment on basis of GDP‑adjusted notional tax
45‑400 Working out amount of instalment—payers of 4 quarterly instalments
45‑402 Working out amount of instalment—payers of 2 quarterly instalments
45‑405 Working out your GDP‑adjusted notional tax
Subdivision 45‑M—How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax
45‑410 Working out amount of instalment—payers of 4 quarterly instalments
45‑412 Working out amount of instalment—payers of 2 quarterly instalments
45‑415 Estimating your benchmark tax
45‑420 Credit in certain cases where amount of instalment is nil
Subdivision 45‑N—How this Part applies to the trustee of a trust
Trustees to whom this Part applies
45‑450 Trustees to whom a single instalment rate is given
45‑455 Trustees to whom several instalment rates are given
45‑460 Rest of Subdivision applies only to multi‑rate trustees
45‑465 Meaning of instalment income
45‑468 Multi‑rate trustee may pay quarterly instalments
How Commissioner works out instalment rate and notional tax for a multi‑rate trustee
45‑470 Working out instalment rate
45‑473 Commissioner must notify you of notional tax
45‑475 Working out your notional tax
45‑480 Working out your adjusted taxable income
45‑483 Meaning of reduced beneficiary’s share and reduced no beneficiary’s share
45‑485 Working out your adjusted withholding income
How Commissioner works out benchmark instalment rate and benchmark tax for a multi‑rate trustee
45‑525 When Commissioner works out benchmark instalment rate and benchmark tax
45‑530 How Commissioner works out benchmark instalment rate
45‑535 Working out your benchmark tax
Subdivision 45‑P—Anti‑avoidance rules
45‑595 Object of this Subdivision
45‑597 Effect of Subdivision in relation to instalment months
45‑600 General interest charge on tax benefit relating to instalments
45‑605 When do you get a tax benefit from a scheme?
45‑610 What is your tax position for an income year?
45‑615 What is your hypothetical tax position for an income year?
45‑620 Amount on which GIC is payable, and period for which it is payable
45‑625 Credit if you also got a tax detriment from the scheme
45‑630 When do you get a tax detriment from a scheme?
45‑635 No tax benefit or detriment results from choice for which income tax law expressly provides
45‑640 Commissioner may remit general interest charge in special cases
Subdivision 45‑Q—General rules for consolidated groups
Guide to Subdivision 45‑Q
45‑700 What this Subdivision is about
Application of Subdivision
45‑703 Effect of this Subdivision and Subdivision 45‑R in relation to monthly payers
45‑705 Application of Subdivision to head company
Usual operation of this Part for consolidated group members
45‑710 Single entity rule
45‑715 When instalments are due—modification of section 45‑61
45‑720 Head company cannot be an annual payer—modification of section 45‑140
Membership changes
45‑740 Change of head company
45‑755 Entry rule (for an entity that becomes a subsidiary member of a consolidated group)
45‑760 Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)
45‑775 Commissioner’s power to work out different instalment rate or GDP‑adjusted notional tax
Subdivision 45‑R—Special rules for consolidated groups
Guide to Subdivision 45‑R
45‑850 What this Subdivision is about
Operative provisions
45‑855 Section 701‑1 disregarded for certain purposes
45‑860 Member having a different instalment period
45‑865 Credit rule
45‑870 Head company’s liability to GIC on shortfall in quarterly instalment
45‑875 Other rules about the general interest charge
45‑880 Continued application of Subdivision 45‑Q to the head company of an acquired group
45‑885 Early application of Subdivision 45‑Q to the head company of a new group
Subdivision 45‑S—MEC groups
Guide to Subdivision 45‑S
45‑900 What this Subdivision is about
Preliminary
45‑905 Objects of Subdivision
General modification rules
45‑910 Extended operation of Part to cover MEC groups
Extended operation of Subdivision 45‑Q
45‑913 Sections 45‑705 and 45‑740 do not apply to members of MEC groups
45‑915 Application of Subdivision 45‑Q to provisional head company
45‑917 Assumption for applying section 45‑710 (single entity rule)
45‑920 Change of provisional head company
45‑922 Life insurance company
Extended operation of Subdivision 45‑R
45‑925 Additional modifications of sections 45‑855 and 45‑860
45‑930 Modifications of sections 45‑865 and 45‑870 and a related provision
45‑935 Additional modifications of section 45‑885
Part 2‑15—Returns and assessments
Division 70—Tax receipts
Guide to Division 70 309
70‑1 What this Division is about
Subdivision 70‑A—Tax receipts
70‑5 Tax receipt to be provided to certain individual taxpayers
Part 2‑30—Collecting Medicare levy with income tax
Division 90—Medicare levy and Medicare levy surcharge
Subdivision 90‑A—Treatment like income tax
90‑1 Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax
Part 2‑35—Excess superannuation contributions
Division 95—Excess concessional contributions charge
Guide to Division 95 313
95‑1 What this Division is about
Subdivision 95‑A—Object of Division
95‑5 Object of Division
Subdivision 95‑B—Excess concessional contributions charge
95‑10 Liability to excess concessional contributions charge
95‑15 Amount of excess concessional contributions charge
95‑20 When excess concessional contributions charge is due and payable
95‑25 General interest charge
Division 96—Releasing money from superannuation
Subdivision 96‑A—Releasing money from superannuation
Guide to Subdivision 96‑A
96‑1 What this Subdivision is about
Requesting a release authority
96‑5 Electing to release excess concessional contributions
96‑7 Electing to release non‑concessional contributions etc.
Issuing a release authority to superannuation provider
96‑10 Release authorities for elections under section 96‑5
96‑12 Release authorities for elections under section 96‑7
96‑15 Varying and revoking a release authority
Complying with a release authority
96‑20 Obligations of superannuation providers
96‑25 Voluntary compliance with a release authority relating to voluntary release interests and defined benefit interests
96‑30 Meaning of maximum available release amount
96‑35 Notifying Commissioner
96‑40 Notifying individual—unsuccessful release attempt
96‑42 Notifying individual—successful releases under section 96‑12
96‑45 Compensation for acquisition of property
Consequences of releasing amounts
96‑50 Entitlement to credits
96‑55 Interest for late payments of money received by the Commissioner in accordance with release authority
96‑60 Income tax treatment of amounts released—proportioning rule does not apply
Division 97—Excess contributions determinations
Subdivision 97‑A—Excess concessional contributions determinations
Guide to Subdivision 97‑A
97‑1 What this Subdivision is about
Operative provisions
97‑5 Determination of excess concessional contributions and charge
97‑10 Review
Subdivision 97‑B—Excess non‑concessional contributions determinations
Guide to Subdivision 97‑B
97‑20 What this Subdivision is about
Operative provisions
97‑25 Excess non‑concessional contributions determinations
97‑30 Associated earnings
97‑35 Review
Chapter 3—Collection, recovery and administration of other taxes
Part 3‑10—Indirect taxes
Division 105—General rules for indirect taxes
Guide to Division 105 334
105‑1 What this Division is about
Subdivision 105‑A—Assessments
105‑3 Application of Subdivision
105‑5 Commissioner may make assessment of indirect tax
105‑10 Request for assessment
105‑15 Indirect tax liabilities do not depend on assessment
105‑20 Commissioner must give notice of the assessment
105‑25 Amendment of assessment
105‑30 Later assessment prevails in case of inconsistency
Subdivision 105‑B—Review of indirect tax decisions
105‑40 Reviewable indirect tax decisions
Subdivision 105‑C—Limits on credits, refunds and recovering amounts
105‑50 Time limit on recovery by the Commissioner
105‑55 Time limit on refunds etc. from the Commissioner
105‑65 Restriction on GST refunds
Subdivision 105‑D—General interest charge and penalties
105‑80 General interest charge
105‑85 Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent
Subdivision 105‑F—Indirect tax refund schemes
105‑120 Refund scheme—defence related international obligations
105‑125 Refund scheme—international obligations
Subdivision 105‑G—Other administrative provisions
105‑145 Commissioner must give things in writing
Division 110—Goods and services tax
Guide to Division 110 349
110‑1 What this Division is about
Subdivision 110‑F—Review of GST decisions
110‑50 Reviewable GST decisions
Division 111—Wine tax and luxury car tax
Guide to Division 111 354
111‑1 What this Division is about
Subdivision 111‑C—Review of wine tax decisions
111‑50 Reviewable wine tax decisions
Subdivision 111‑D—Effect on contracts from amendments to laws
111‑60 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 112 357
112‑1 What this Division is about
Subdivision 112‑E—Review of fuel tax decisions
112‑50 Reviewable fuel tax decisions
Part 3‑20—Sustaining the superannuation contribution concession
Division 133—Deferred payment
Guide to Division 133 359
133‑1 What this Division is about
Subdivision 133‑A—Deferral determination
Guide to Subdivision 133‑A
133‑5 What this Subdivision is about
Operative provisions
133‑10 Determination of tax that is deferred to a debt account
133‑15 Defined benefit tax
133‑20 How to attribute the defined benefit tax to defined benefit interests
133‑25 Determination reducing tax deferred to a debt account
133‑30 General provisions applying to determinations under this Subdivision
Subdivision 133‑B—Debt account
Guide to Subdivision 133‑B
133‑55 What this Subdivision is about
Operative provisions
133‑60 Debt account to be kept for deferred tax
133‑65 Interest on debt account balance
133‑70 Voluntary payments
133‑75 Commissioner must notify superannuation provider of debt account
Subdivision 133‑C—Compulsory payment
Guide to Subdivision 133‑C
133‑100 What this Subdivision is about
Debt account discharge liability
133‑105 Liability to pay debt account discharge liability
133‑110 When debt account discharge liability must be paid
133‑115 General interest charge
133‑120 Meaning of debt account discharge liability
133‑125 Notice of debt account discharge liability
End benefit
133‑130 Meaning of end benefit
133‑135 End benefit notice—individual
133‑140 End benefit notice—superannuation provider
133‑145 End benefit notice—material changes or omissions
Division 135—Releasing money from superannuation
Guide to Division 135 373
135‑1 What this Division is about
Subdivision 135‑A—When the Commissioner must issue a release authority
Guide to Subdivision 135‑A
135‑5 What this Subdivision is about
Operative provisions
135‑10 Release authorities
Subdivision 135‑B—When a release authority can be given to a superannuation provider
Guide to Subdivision 135‑B
135‑35 What this Subdivision is about
Operative provisions
135‑40 When you may give release authority to superannuation provider
135‑45 When Commissioner may give release authority to superannuation provider
Subdivision 135‑C—Release of superannuation money under a release authority
Guide to Subdivision 135‑C
135‑70 What this Subdivision is about
Operative provisions
135‑75 Requirement for superannuation provider to release money
135‑80 Compensation for acquisition of property
135‑85 Release amount
135‑90 How the Commissioner applies amounts received under a release authority
135‑95 Defined benefit interests—releasing amounts to pay debt account discharge liability
135‑100 Income tax treatment of amounts released—proportioning rule does not apply
Chapter 4—Generic assessment, collection and recovery rules
Part 4‑1—Returns and assessments
Division 155—Assessments
Guide to Division 155 383
155‑1 What this Division is about
Subdivision 155‑A—Making assessments
155‑5 Commissioner may make assessment
155‑10 Commissioner must give notice of assessment
155‑15 Self‑assessment
155‑20 Assessment of indirect tax on importations and customs dealing
155‑25 Special assessment
155‑30 Delays in making assessments
Subdivision 155‑B—Amending assessments
When Commissioner may amend assessments
155‑35 Amendment during period of review
155‑40 Amendment during period of review—certain applications taken to be notices
155‑45 Amendment on application
155‑50 Amendment to give effect to private ruling
155‑55 Amendment to give effect to certain anti‑avoidance declarations
155‑60 Amendment because of review, objection or fraud
Special rules about amending amended assessments
155‑65 Amending amended assessments
155‑70 Refreshed period of review
General rules
155‑75 Refunds of amounts overpaid
155‑80 Amended assessments are assessments
Subdivision 155‑C—Validity and review of assessments
155‑85 Validity of assessment
155‑90 Review of assessments
Subdivision 155‑D—Miscellaneous
155‑95 Entities
Part 4‑15—Collection and recovery of tax‑related liabilities and other amounts
Division 250—Introduction
Subdivision 250‑A—Guide to Part 4‑15
250‑1 What this Part is about
250‑5 Some important concepts about tax‑related liabilities
250‑10 Summary of tax‑related liabilities
Subdivision 250‑B—Object of this Part
250‑25 Object
Division 255—General rules about collection and recovery
Subdivision 255‑A—Tax‑related liabilities
255‑1 Meaning of tax‑related liability
255‑5 Recovering a tax‑related liability that is due and payable
Subdivision 255‑B—Commissioner’s power to vary payment time
255‑10 To defer the payment time
255‑15 To permit payments by instalments
255‑20 To bring forward the payment time in certain cases
Subdivision 255‑C—Recovery proceedings
Guide to Subdivision 255‑C
255‑35 What this Subdivision is about
Operative provisions
255‑40 Service of documents if person absent from Australia or cannot be found
255‑45 Evidentiary certificate
255‑50 Certain statements or averments
255‑55 Evidence by affidavit
Subdivision 255‑D—Security deposits
255‑100 Commissioner may require security deposit
255‑105 Notice of requirement to give security
255‑110 Offence
Division 260—Special rules about collection and recovery
Guide to Division 260 415
260‑1 What this Division is about
Subdivision 260‑A—From third party
260‑5 Commissioner may collect amounts from third party
260‑10 Notice to Commonwealth, State or Territory
260‑15 Indemnity
260‑20 Offence
Subdivision 260‑B—From liquidator
260‑40 Subdivision does not apply to superannuation guarantee charge
260‑45 Liquidator’s obligation
260‑50 Offence
260‑55 Joint liability of 2 or more liquidators
260‑60 Liquidator’s other obligation or liability
Subdivision 260‑C—From receiver
260‑75 Receiver’s obligation
260‑80 Offence
260‑85 Joint liability of 2 or more receivers
260‑90 Receiver’s other obligation or liability
Subdivision 260‑D—From agent winding up business for foreign resident principal
260‑105 Obligation of agent winding up business for foreign resident principal
260‑110 Offence
260‑115 Joint liability of 2 or more agents
260‑120 Agent’s other obligation or liability
Subdivision 260‑E—From deceased person’s estate
260‑140 Administered estate
260‑145 Unadministered estate
260‑150 Commissioner may authorise amount to be recovered
Division 263—Mutual assistance in collection of foreign tax debts
Subdivision 263‑A—Foreign revenue claims
Guide to Subdivision 263‑A
263‑5 What this Subdivision is about
Operative provisions
263‑10 Meaning of foreign revenue claim
263‑15 Requirements for foreign revenue claims
263‑20 Foreign Revenue Claims Register
263‑25 Registering claims
263‑30 When amount is due and payable
263‑35 Amending the Register etc.
263‑40 Payment to competent authority
Division 265—Other matters
Subdivision 265‑A—Right of person to seek recovery or contribution
Guide to Subdivision 265‑A
265‑35 What this Subdivision is about
Operative provisions
265‑40 Right of recovery if another person is liable
265‑45 Right of contribution if persons are jointly liable
Subdivision 265‑B—Application of laws
265‑65 Non‑application of certain taxation laws
Division 268—Estimates and recovery of PAYG withholding liabilities and superannuation guarantee charge
Guide to Division 268 435
268‑1 What this Division is about
Subdivision 268‑A—Object
268‑5 Object of Division
Subdivision 268‑B—Making estimates
268‑10 Commissioner may make estimate
268‑15 Notice of estimate
Subdivision 268‑C—Liability to pay estimates
268‑20 Nature of liability to pay estimate
268‑25 Accuracy of estimate irrelevant to liability to pay
268‑30 Estimate provable in bankruptcy or winding up
Subdivision 268‑D—Reducing and revoking estimates
268‑35 How estimate may be reduced or revoked—Commissioner’s powers
268‑40 How estimate may be reduced or revoked—statutory declaration or affidavit
268‑45 How estimate may be reduced or revoked—rejection of proof of debt
268‑50 How estimate may be reduced—amount paid or applied
268‑55 When reduction or revocation takes effect
268‑60 Consequences of reduction or revocation—refund
268‑65 Consequences of reduction or revocation—statutory demand changed or set aside
268‑70 Consequences of reduction or revocation—underlying liability
Subdivision 268‑E—Late payment of estimates
268‑75 Liability to pay the general interest charge
268‑80 Effect of paying the general interest charge
Subdivision 268‑F—Miscellaneous
268‑85 Effect of judgment on liability on which it is based
268‑90 Requirements for statutory declaration or affidavit
268‑95 Liquidators, receivers and trustees in bankruptcy
268‑100 Division not to limit or exclude Corporations or Bankruptcy Act
Division 269—Penalties for directors of non‑complying companies
Guide to Division 269 457
269‑1 What this Division is about
Subdivision 269‑A—Object and scope
269‑5 Object of Division
269‑10 Scope of Division
Subdivision 269‑B—Obligations and penalties
269‑15 Directors’ obligations
269‑20 Penalty
269‑25 Notice
269‑30 Effect on penalty of directors’ obligation ending before end of notice period
269‑35 Defences
Subdivision 269‑C—Discharging liabilities
269‑40 Effect of director paying penalty or company discharging liability
269‑45 Directors’ rights of indemnity and contribution
Subdivision 269‑D—Miscellaneous
269‑50 How notice may be given
269‑52 Copies of notices
269‑55 Division not to limit or exclude Corporations Act
Part 4‑25—Charges and penalties
Division 280—Shortfall interest charge
Guide to Division 280 471
280‑1 Guide to Division 280
Subdivision 280‑A—Object of Division
280‑50 Object of Division
Subdivision 280‑B—Shortfall interest charge
280‑100 Liability to shortfall interest charge—income tax
280‑101 Liability to shortfall interest charge—excess exploration credit tax
280‑102 Liability to shortfall interest charge—petroleum resource rent tax
280‑102A Liability to shortfall interest charge—excess non‑concessional contributions tax
280‑102B Liability to shortfall interest charge—Division 293 tax
280‑103 Liability to shortfall interest charge—general
280‑105 Amount of shortfall interest charge
280‑110 Notification by Commissioner
Subdivision 280‑C—Remitting shortfall interest charge
280‑160 Remitting shortfall interest charge
280‑165 Commissioner must give reasons for not remitting in certain cases
280‑170 Objecting against remission decision
Division 284—Administrative penalties for statements, unarguable positions and schemes
Guide to Division 284 479
284‑5 What this Division is about
Subdivision 284‑A—General provisions
284‑10 Object of Division
284‑15 When a matter is reasonably arguable
284‑20 Which statements this Division applies to
284‑25 Statements by agents
284‑30 Application of Division to trusts
284‑35 Application of Division to partnerships
Subdivision 284‑B—Penalties relating to statements
Guide to Subdivision 284‑B
284‑70 What this Subdivision is about
Operative provisions
284‑75 Liability to penalty
284‑80 Shortfall amounts
284‑85 Amount of penalty
284‑90 Base penalty amount
284‑95 Joint and several liability of directors of corporate trustee that makes a false or misleading statement
Subdivision 284‑C—Penalties relating to schemes
Guide to Subdivision 284‑C
284‑140 What this Subdivision is about
Operative provisions
284‑145 Liability to penalty
284‑150 Scheme benefits and scheme shortfall amounts
284‑155 Amount of penalty
284‑160 Base penalty amount: schemes
284‑165 Exception—threshold for penalty arising from cross‑border transfer pricing
Subdivision 284‑D—Provisions common to Subdivisions 284‑B and 284‑C
284‑220 Increase in base penalty amount
284‑224 Reduction of base penalty amount if law was applied in an accepted way
284‑225 Reduction of base penalty amount if you voluntarily tell the Commissioner
Subdivision 284‑E—Special rules about unarguable positions for cross‑border transfer pricing
284‑250 Undocumented transfer pricing treatment not reasonably arguable
284‑255 Documentation requirements
Division 286—Penalties for failing to lodge documents on time
Subdivision 286‑A—Guide to Division 286
286‑1 What this Division is about
Subdivision 286‑B—Object of Division
286‑25 Object of Division
Subdivision 286‑C—Penalties for failing to lodge documents on time
286‑75 Liability to penalty
286‑80 Amount of penalty
Division 288—Miscellaneous administrative penalties
288‑10 Penalty for non‑electronic notification
288‑20 Penalty for non‑electronic payment
288‑25 Penalty for failure to keep or retain records
288‑30 Penalty for failure to retain or produce declarations
288‑35 Penalty for preventing access etc.
288‑40 Penalty for failing to register or cancel registration
288‑45 Penalty for failing to issue tax invoice etc.
288‑50 Penalty for both principal and agent issuing certain documents
288‑70 Administrative penalties for life insurance companies
288‑75 Administrative penalty for a copyright or resale royalty collecting society
288‑80 Administrative penalty for over declaring conduit foreign income
288‑90 Failing to give release authority for excess non‑concessional contributions tax
288‑95 Failing to comply etc. with release authority
288‑100 Excess money paid under release authority
288‑105 Superannuation provider to calculate crystallised pre‑July 83 amount of superannuation interest by 30 June 2008
288‑110 Contravention of superannuation data and payment regulation or standard
Division 290—Promotion and implementation of schemes
Subdivision 290‑A—Preliminary
290‑5 Objects of this Division
290‑10 Extra‑territorial application
Subdivision 290‑B—Civil penalties
290‑50 Civil penalties
290‑55 Exceptions
290‑60 Meaning of promoter
290‑65 Meaning of tax exploitation scheme
Subdivision 290‑C—Injunctions
290‑120 Conduct to which this Subdivision applies
290‑125 Injunctions
290‑130 Interim injunctions
290‑135 Delay in making ruling
290‑140 Discharge etc. of injunctions
290‑145 Certain limits on granting injunctions not to apply
290‑150 Other powers of the Federal Court unaffected
Subdivision 290‑D—Voluntary undertakings
290‑200 Voluntary undertakings
Division 298—Machinery provisions for penalties
Subdivision 298‑A—Administrative penalties
298‑5 Scope of Subdivision
298‑10 Notification of liability
298‑15 Due date for penalty
298‑20 Remission of penalty
298‑25 General interest charge on unpaid penalty
298‑30 Assessment of penalties under Division 284
Subdivision 298‑B—Civil penalties
298‑80 Application of Subdivision
298‑85 Civil evidence and procedure rules for civil penalty orders
298‑90 Civil proceedings after criminal proceedings
298‑95 Criminal proceedings during civil proceedings
298‑100 Criminal proceedings after civil proceedings
298‑105 Evidence given in proceedings for penalty not admissible in criminal proceedings
298‑110 Civil double jeopardy
Part 4‑50—Release from particular liabilities
Division 340—Commissioner’s power in cases of hardship
Guide to Division 340 536
340‑1 What this Division is about
Operative provisions
340‑5 Release from particular liabilities in cases of serious hardship
340‑10 Liabilities to which this section applies
340‑15 Commissioner may take action to give effect to a release decision
340‑20 Extinguishing your liability to pay a fringe benefits tax instalment if you are released
340‑25 Extinguishing your liability to pay a PAYG instalment if you are released
Division 342—Commissioner’s power relating to proceeds of crime proceedings
Guide to Division 342 542
342‑1 What this Division is about
Subdivision 342‑A—Power to waive right to payment of tax‑related liabilities
342‑5 Object of this Subdivision
342‑10 Power to waive right to payment of tax‑related liability
Part 4‑90—Evidence
Division 350—Evidence
Guide to Division 350 545
350‑1 What this Division is about
Subdivision 350‑A—Evidence
350‑5 Application of Subdivision
350‑10 Evidence
350‑15 Judicial notice of signature
Chapter 5—Administration
Part 5‑1—The Australian Taxation Office
Division 352—Accountability of the Commissioner
Guide to Division 352 549
352‑1 What this Division is about
Subdivision 352‑A—Accountability of the Commissioner in respect of indirect tax laws
352‑5 Commissioner must prepare annual report on indirect tax laws
Division 353—Powers to obtain information and evidence
353‑10 Commissioner’s power
353‑15 Access to premises, documents etc.
353‑20 Checking status of specifically listed deductible gift recipients
Division 355—Confidentiality of taxpayer information
Guide to Division 355 555
355‑1 What this Division is about
Subdivision 355‑A—Objects and application of Division
355‑10 Objects of Division
355‑15 Application of Division
Subdivision 355‑B—Disclosure of protected information by taxation officers
Guide to Subdivision 355‑B
355‑20 What this Subdivision is about
Operative provisions
355‑25 Offence—disclosure of protected information by taxation officers
355‑30 Meaning of protected information and taxation officer
355‑35 Consent is not a defence
355‑40 Generality of Subdivision not limited
355‑45 Exception—disclosure of publicly available information
355‑47 Exception—disclosure of periodic aggregate tax information
355‑50 Exception—disclosure in performing duties
355‑55 Exception—disclosure to Ministers
355‑60 Limits on disclosure to Ministers
355‑65 Exception—disclosure for other government purposes
355‑70 Exception—disclosure for law enforcement and related purposes
355‑75 Limits on disclosure to courts and tribunals
Subdivision 355‑C—On‑disclosure of protected information by other people
Guide to Subdivision 355‑C
355‑150 What this Subdivision is about
Operative provisions
355‑155 Offence—on‑disclosure of protected information by other people
355‑160 Consent is not a defence
355‑165 Generality of Subdivision not limited
355‑170 Exception—on‑disclosure of publicly available information
355‑172 Exception—disclosure of periodic aggregate tax information
355‑175 Exception—on‑disclosure for original purpose
355‑180 Exception—on‑disclosure to Ministers in relation to statutory powers or functions
355‑185 Exception—on‑disclosure in relation to IGIS
355‑190 Exception—on‑disclosure in relation to ASIO
355‑195 Exception—on‑disclosure by Royal Commissions
355‑200 Exception—records made in compliance with Australian laws
355‑205 Limits on on‑disclosure to courts or tribunals
355‑210 Limits on on‑disclosure to Ministers
Subdivision 355‑D—Disclosure of protected information that has been unlawfully acquired
Guide to Subdivision 355‑D
355‑260 What this Subdivision is about
Operative provisions
355‑265 Offence—disclosure of protected information acquired in breach of a taxation law
355‑270 Exception—disclosure of publicly available information
355‑275 Exception—disclosure in relation to a taxation law
355‑280 Limits on disclosure to courts and tribunals
Subdivision 355‑E—Other matters
Guide to Subdivision 355‑E
355‑320 What this Subdivision is about
Operative provisions
355‑325 Oath or affirmation to protect information
355‑330 Injunctions to prevent contravention of non‑disclosure provisions
355‑335 Procedures for disclosing protected information
Division 356—General administration of tax laws
Guide to Division 356 599
356‑1 What this Division is about
Subdivision 356‑A—Indirect tax laws
356‑5 Commissioner has general administration of indirect tax laws
Part 5‑5—Rulings
Division 357—Object and common rules
Guide to Division 357 600
357‑1 What this Division is about
Subdivision 357‑A—Object of this Part
357‑5 Object of this Part
Subdivision 357‑B—Common rules for rulings
Rules for all rulings
357‑50 Scope of Division
357‑55 The provisions that are relevant for rulings
357‑60 When rulings are binding on the Commissioner
357‑65 Stopping relying on a ruling
357‑70 Commissioner may apply the law if more favourable than the ruling
357‑75 Inconsistent rulings
357‑80 Contracts for schemes
357‑85 Effect on ruling if relevant provision re‑enacted
357‑90 Validity of ruling not affected by formal defect
Common rules for public and private rulings
357‑95 Electronic communications
357‑100 Evidence
Common rules for private and oral rulings
357‑105 Further information must be sought
357‑110 Assumptions in making private or oral ruling
357‑115 Additional information provided by applicant
357‑120 Commissioner may take into account information from third parties
357‑125 Applications and objections not to affect obligations and powers
Division 358—Public rulings
Guide to Division 358 612
358‑1 What this Division is about
Making public rulings
358‑5 What is a public ruling?
358‑10 Application of public rulings
358‑15 When a public ruling ceases to apply
Withdrawing public rulings
358‑20 Withdrawing public rulings
Division 359—Private rulings
Guide to Division 359 615
359‑1 What this Division is about
Private rulings
359‑5 Private rulings
359‑10 Applying for a private ruling
359‑15 Private rulings to be given to applicants
359‑20 Private rulings must contain certain details
359‑25 Time of application of private rulings
359‑30 Ruling for trustee of a trust
359‑35 Dealing with applications
359‑40 Valuations
359‑45 Related rulings
359‑50 Delays in making private rulings
359‑55 Revised private rulings
359‑60 Objections, reviews and appeals relating to private rulings
359‑65 Commissioner may consider new information on objection
359‑70 Successful objection decision alters ruling
Division 360—Oral rulings
Guide to Division 360 624
360‑1 What this Division is about
Oral rulings
360‑5 Applying for and making of oral rulings
360‑10 Withdrawing an application for an oral ruling
360‑15 Commissioner determinations
Division 361—Non‑ruling advice and general administrative practice
361‑5 Non‑ruling advice and general administrative practice
Part 5‑25—Record‑keeping and other obligations of taxpayers
Division 382—Record‑keeping
Guide to Division 382 628
382‑1 What this Division is about
Subdivision 382‑A—Keeping records of indirect tax transactions
382‑5 Keeping records of indirect tax transactions
Subdivision 382‑B—Record keeping obligations of deductible gift recipients
382‑15 Deductible gift recipients to keep records
Division 388—Requirements about giving material to the Commissioner
Subdivision 388‑A—Object of Division
388‑5 Object of Division
Subdivision 388‑B—General provisions
388‑50 Approved forms
388‑52 Saturdays, Sundays and public holidays
388‑55 Commissioner may defer time for lodgment
388‑60 Declaration by entity
388‑65 Declaration by entity where agent gives document
388‑70 Declaration by agent
388‑75 Signing declarations
388‑80 Electronic notification of BAS amounts
388‑85 Truncating amounts
Division 390—Superannuation reporting
Guide to Division 390 639
390‑1 What this Division is about
Subdivision 390‑A—Member information statements and roll‑over superannuation benefit statements
390‑5 Member information statements
390‑10 Statements about roll‑over superannuation benefits etc.
390‑12 Statements about benefits paid to KiwiSaver schemes
390‑15 Superannuation statements to members
Subdivision 390‑B—Statements relating to release authorities
390‑65 Statements relating to release authorities
Subdivision 390‑C—Other statements
390‑115 Change or omission in information given to the Commissioner
Division 392—Employee share scheme reporting
Guide to Division 392 649
392‑1 What this Division is about
Subdivision 392‑A—Statements
392‑5 Statements by providers
392‑10 Change or omission in information given to the Commissioner
Subdivision 392‑B—Miscellaneous
392‑15 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997
Division 393—Reports by investment bodies
Guide to Division 393 654
393‑1 What this Division is about
393‑5 Reports about quoting tax file numbers and ABNs
393‑10 Annual investment income reports
393‑15 Errors in reports
Division 394—Reporting about forestry managed investment schemes
Guide to Division 394 657
394‑1 What this Division is about
394‑5 Statements about initial contributions to scheme
394‑10 Statements about failure to establish trees within 18 months
Division 396—FATCA
Guide to Division 396 660
396‑1 What this Division is about
396‑5 Statements about U.S. Reportable Accounts
396‑10 Statements about payments to Nonparticipating Financial Institutions
396‑15 Meaning of the FATCA Agreement
396‑20 Permissions and elections
396‑25 Record keeping
Division 398—Miscellaneous reporting obligations
Guide to Division 398 664
398‑1 What this Division is about
Subdivision 398‑A—Farm Management Deposit reporting
398‑5 Reporting to Agriculture Department
Part 5‑30—Payment, ABN and identification verification system
Division 400—Guide to Part 5‑30
400‑1 What Part 5‑30 is about
400‑5 The payment, ABN and identification verification system
Division 405—Transaction reporting by purchasers
405‑5 Payments to which this Division applies
405‑10 Reporting requirements
405‑15 Invoices produced by purchasers
Division 410—Transaction reporting by suppliers
410‑5 Payments to which this Division applies
410‑10 Reporting requirements
410‑15 Invoices produced by purchasers
Division 415—Verification of suppliers’ ABNs by purchasers
415‑5 Payments to which this Division applies
415‑10 ABN verification requirements
415‑15 Method of obtaining ABN verification
415‑20 Verification applies to later payments
Division 417—Verification of suppliers’ identities by purchasers
417‑5 Payments to which this Division applies
417‑10 Identity verification requirements
417‑15 Method of obtaining identity verification
417‑20 Verification applies to later payments
Division 420—Penalties for not reporting or verifying
420‑5 Failing to report or verify: administrative penalty
Division 425—Other matters
425‑20 Constructive payment
425‑25 Non‑cash benefits
Part 5‑35—Registration and similar processes for various taxes
Division 426—Process of endorsing charities and other entities
Guide to Division 426 677
426‑1 What this Division is about
Subdivision 426‑A—Application of Subdivision 426‑B to various kinds of endorsement
426‑5 Application of Subdivision 426‑B to various kinds of endorsement
426‑10 How Subdivision 426‑B applies to government entities in relation to endorsement under section 30‑120 of the Income Tax Assessment Act 1997
Subdivision 426‑B—Process of endorsement etc.
426‑15 Applying for endorsement
426‑20 Dealing with an application for endorsement
426‑25 Notifying outcome of application for endorsement
426‑30 Date of effect of endorsement
426‑35 Review of refusal of endorsement
426‑40 Checking entitlement to endorsement
426‑45 Telling Commissioner of loss of entitlement to endorsement
426‑50 Partnerships and unincorporated bodies
426‑55 Revoking endorsement
426‑60 Review of revocation of endorsement
Subdivision 426‑C—Entries on Australian Business Register
426‑65 Entries on Australian Business Register
Subdivision 426‑D—Public and private ancillary funds
Guide to Subdivision 426‑D
426‑100 What this Subdivision is about
Public ancillary funds
426‑102 Public ancillary funds
426‑103 Public ancillary fund guidelines
426‑104 Australian Business Register must show public ancillary fund status
Private ancillary funds
426‑105 Private ancillary funds
426‑110 Private ancillary fund guidelines
426‑115 Australian Business Register must show private ancillary fund status
Administrative penalties
426‑120 Administrative penalties for trustees of ancillary funds
Suspension and removal of trustees
426‑125 Suspension or removal of trustees
426‑130 Commissioner to appoint acting trustee in cases of suspension or removal
426‑135 Terms and conditions of appointment of acting trustee
426‑140 Termination of appointment of acting trustee
426‑145 Resignation of acting trustee
426‑150 Property vesting orders
426‑155 Powers of acting trustee
426‑160 Commissioner may give directions to acting trustee
426‑165 Property vested in acting trustee—former trustees’ obligations relating to books, identification of property and transfer of property
Transfers between ancillary funds
426‑170 Ancillary funds must not provide funds to other ancillary funds
Part 5‑45—Application of taxation laws to certain entities
Division 444—Obligations of entities on behalf of other entities
Guide to Division 444 701
444‑1 What this Division is about
Subdivision 444‑A—Unincorporated associations and bodies and companies
444‑5 Unincorporated associations and bodies
444‑10 Public officers of companies
444‑15 Notifying and serving companies
Subdivision 444‑B—Partnerships
444‑30 Partnerships
Subdivision 444‑C—Superannuation funds
444‑50 Superannuation funds
Subdivision 444‑D—Incapacitated entities
444‑70 Representatives of incapacitated entities
Subdivision 444‑E—Indirect tax specific entities
444‑80 GST joint ventures
444‑85 Non‑profit sub‑entities
444‑90 GST groups
Division 446—Local governing bodies
Guide to Division
446‑1 What this Division is about
Operative provisions
446‑5 Requirements for unanimous resolutions by local governing bodies
Part 5‑100—Miscellaneous
Division 850—Transactions exempt from application of taxation laws
Subdivision 850‑A—Declaration relating to security or intelligence agency
850‑100 Declaration relating to security or intelligence agency
Schedule 1—Collection and recovery of income tax and other liabilities
Note: See section 3AA.
Chapter 2—Collection, recovery and administration of income tax
Part 2‑1—Introduction to the Pay as you go (PAYG) system
Division 6—Guide to Parts 2‑5 and 2‑10
6‑1 What Parts 2‑5 and 2‑10 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), liability to repay debts in relation to trade support loan and liability to repay financial supplement debts under the Student Financial Supplement Scheme (SFSS).
Table of sections
6‑5 The Pay as you go (PAYG) system
6‑10 How the amounts collected are dealt with
6‑5 The Pay as you go (PAYG) system
(1) Parts 2‑5 and 2‑10 establish the PAYG system, which has 2 components:
• PAYG withholding (Part 2‑5)
• PAYG instalments (Part 2‑10).
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 GDP‑adjusted 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.
6‑10 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 2‑5—Pay as you go (PAYG) withholding
Division 10—Guide to Part 2‑5
10‑1 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 non‑cash 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.
10‑5 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 12‑390(4))).
Summary of withholding payments |
Item | Withholding payment | Section |
1 | A payment of salary etc. to an employee | 12‑35 |
2 | A payment of remuneration to the director of a company | 12‑40 |
3 | A payment of salary etc. to an office holder (e.g. a member of the Defence Force) | 12‑45 |
3A | a payment to a *religious practitioner | 12‑47 |
4 | A return to work payment to an individual | 12‑50 |
5 | A payment that is covered by a voluntary agreement | 12‑55 |
6 | A payment under a labour hire arrangement or a payment specified by regulations | 12‑60 |
7 | A *superannuation income stream or an annuity | 12‑80 |
8 | A *superannuation lump sum or a payment for termination of employment | 12‑85 |
9 | An unused leave payment | 12‑90 |
10 | A social security or similar payment (e.g. old age pension) | 12‑110 |
11 | A Commonwealth education or training payment | 12‑115 |
12 | A compensation, sickness or accident payment | 12‑120 |
13 | A payment arising from an investment where the recipient does not quote its tax file number, or in some cases, its ABN | 12‑140 |
14 | Investor becoming presently entitled to income of a unit trust | 12‑145 |
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 | 12‑175 |
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 | 12‑180 |
15 | A payment for a supply where the recipient of the payment does not quote its ABN | 12‑190 |
16 | A dividend payment to an overseas person | 12‑210 |
17 | A dividend payment received for a foreign resident | 12‑215 |
18 | An interest payment to an overseas person | 12‑245 |
19 | An interest payment received for a foreign resident | 12‑250 |
20 | An interest payment derived by a lender in carrying on business through overseas permanent establishment | 12‑255 |
21 | A royalty payment to an overseas person | 12‑280 |
22 | A royalty payment received for a foreign resident | 12‑285 |
22A | A departing Australia superannuation payment | 12‑305 |
22AA | An *excess untaxed roll‑over amount | 12‑312 |
22B | A payment (of a kind set out in the regulations) to a foreign resident | 12‑315 |
22C | A payment (of a kind set out in the regulations) received for a foreign resident | 12‑317 |
22D | A payment of salary, wages etc. to an employee under the Seasonal Labour Mobility Program | 12‑319A |
23 | A mining payment | 12‑320 |
24 | A natural resource payment | 12‑325 |
25 | A payment by a managed investment trust | 12‑385 |
26 | A payment by a *custodian or other entity | 12‑390 |
(2) These can also be treated as withholding payments:
(a) alienated personal services payments (see Division 13);
(b) non‑cash 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 non‑cash benefit.
Division 11—Preliminary matters
Table of sections
11‑1 Object of this Part
11‑5 Constructive payment
11‑1 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
(cd) amounts of liabilities to the Commonwealth under Chapter 3 of the Trade Support Loans Act 2014; 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
(h) *petroleum resource rent tax.
11‑5 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 12—Payments from which amounts must be withheld
Table of Subdivisions
12‑A General rules
12‑B Payments for work and services
12‑C Payments for retirement or because of termination of employment
12‑D Benefit and compensation payments
12‑E Payments where TFN or ABN not quoted
12‑F Dividend, interest and royalty payments
12‑FA Departing Australia superannuation payments
12‑FAA Excess untaxed roll‑over amount
12‑FB Payments to foreign residents etc.
12‑FC Seasonal Labour Mobility Program
12‑G Payments in respect of mining on Aboriginal land, and natural resources
12‑H Distributions of managed investment trust income
Subdivision 12‑A—General rules
Table of sections
12‑1 General exceptions
12‑5 What to do if more than one provision requires a withholding
12‑7 Division does not apply to alienated personal services payments
12‑10 Division does not apply to non‑cash benefits
12‑20 Application of Division and regulations to non‑share dividends
12‑1 General exceptions
Exempt income of recipient
(1) An entity need not withhold an amount under section 12‑35, 12‑40, 12‑45, 12‑47, 12‑50, 12‑55, 12‑60, 12‑80, 12‑85, 12‑90, 12‑120 or 12‑190 from a payment if the whole of the payment is *exempt income of the entity receiving the payment.
Non‑assessable non‑exempt income of recipient
(1A) An entity need not withhold an amount under Subdivision 12‑B, Subdivision 12‑C or section 12‑120 or 12‑190 from a payment if the whole of the payment is not assessable income and is not *exempt income of the entity receiving the payment.
Living‑away‑from‑home allowance benefit
(2) In working out how much to withhold under section 12‑35, 12‑40, 12‑45, 12‑47, 12‑115, 12‑120, 12‑315 or 12‑317 from a payment, disregard so much of the payment as is a living‑away‑from‑home 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 12‑35, 12‑40, 12‑45, 12‑47, 12‑115, 12‑120, 12‑315 or 12‑317 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 an exempt benefit under section 22 of that Act (about reimbursement of car expenses on the basis of distance travelled).
12‑5 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 12‑385 or 12‑390 | distributions to foreign residents from *managed investment trusts | each other withholding provision |
1 | section 12‑35, 12‑40, 12‑45, 12‑47 or 12‑50 | a payment for work or services | section 12‑60 (payment under a labour hire arrangement or specified by regulations); or section 12‑190 (payment for a supply where recipient does not quote its ABN) |
1A | section 12‑35 or 12‑45 | a payment for work or services | section 12‑47 (a payment to a *religious practitioner) |
2 | section 12‑80, 12‑85 or 12‑90 | a *superannuation benefit, an annuity, a payment for termination of employment or an unused leave payment | section 12‑60 (payment under a labour hire arrangement or specified by regulations); or section 12‑190 (payment for a supply where recipient does not quote its ABN) |
3 | section 12‑110, 12‑115 or 12‑120 | a payment of benefit or compensation | section 12‑60 (payment under a labour hire arrangement or specified by regulations); or section 12‑190 (payment for a supply where recipient does not quote its ABN) |
4 | section 12‑60 | a payment under a labour hire arrangement or specified by regulations | section 12‑190 (payment for a supply where recipient does not quote its ABN) |
5 | section 12‑140 or 12‑145 | a payment arising from investment where the recipient does not quote tax file number | section 12‑175 or 12‑180 (Payment of income of closely held trust where TFN not quoted) or section 12‑210, 12‑215, 12‑245, 12‑250 or 12‑255 (payment of a dividend or interest) |
6 | section 12‑280 or 12‑285 | a payment of royalty | section 12‑325 (natural resource payment) |
(3) Apply a provision in this Division (apart from a provision in Subdivision 12‑FB) that covers a payment in priority to a provision in Subdivision 12‑FB that also covers the payment.
Note: Some provisions of this Division clearly do not cover a payment covered by some other provisions. For example:
- Section 12‑55 (about voluntary agreements) covers a payment only if no other provision requires the payer to withhold an amount from the payment.
12‑7 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 12‑FB; and
(b) any other provisions in this Division to the extent that they apply in relation to that Subdivision.
12‑10 Division does not apply to non‑cash benefits
This Division does not apply to a payment in so far as it consists of providing a *non‑cash benefit.
Note: If a non‑cash 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.
12‑20 Application of Division and regulations to non‑share dividends
This Division and the regulations made for the purposes of this Division:
(a) apply to a non‑share 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 non‑share dividend in the same way as it applies to a dividend.
Subdivision 12‑B—Payments for work and services
Table of sections
12‑35 Payment to employee
12‑40 Payment to company director
12‑45 Payment to office holder
12‑47 Payment to religious practitioners
12‑50 Return to work payment
12‑55 Voluntary agreement to withhold
12‑60 Payment under labour hire arrangement, or specified by regulations
12‑35 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 12‑1.
12‑40 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 12‑1.
12‑45 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 446‑5, 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 12‑1.
(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.
12‑47 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.
12‑50 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 15‑3 of the Income Tax Assessment Act 1997 (return to work payments).
For exceptions, see section 12‑1.
12‑55 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 12‑1.
(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.
12‑60 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 12‑1.
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 12‑1.
Subdivision 12‑C—Payments for retirement or because of termination of employment
12‑80 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 12‑1.
12‑85 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 12‑1.
12‑90 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 12‑1.
Subdivision 12‑D—Benefit and compensation payments
Table of sections
12‑110 Social Security or other benefit payment
12‑115 Commonwealth education or training payment
12‑120 Compensation, sickness or accident payment
12‑110 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 52‑10 of the Income Tax Assessment Act 1997 (Social Security payments); or
(b) specified in an item of the table in section 52‑65 of that Act (Veterans’ Affairs payments); or
(ba) specified in an item of the table in section 52‑114 of that Act (Military Rehabilitation and Compensation Act payments); or
(c) specified in section 52‑105, 53‑10, 55‑5 or 55‑10 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.
12‑115 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 12‑1.
(2) In working out the amount to be withheld, disregard so much of the payment as is *exempt income of the individual.
12‑120 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 12‑1.
Subdivision 12‑E—Payments where TFN or ABN not quoted
Table of sections
Payment in respect of investment
12‑140 Recipient does not quote tax file number
12‑145 Investor becoming presently entitled to income of a unit trust
12‑150 Limited application of section 12‑140 to payment under financial arrangement
12‑155 When investor may quote ABN as alternative
12‑160 Investment body unaware that exemption from quoting TFN has stopped applying
12‑165 Exception for fully franked dividend
12‑170 Exception for payments below thresholds set by regulations
Payment of income of closely held trust where TFN not quoted
12‑175 Trustee distributes income of closely held trust
12‑180 Beneficiary becomes presently entitled to income of closely held trust
12‑185 Exception for payments below thresholds set by regulations
Payment for a supply
12‑190 Recipient does not quote ABN
Payment in respect of investment
12‑140 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 non‑transferable—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 investment‑related 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 investment‑related 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 12‑150 to 12‑170.
12‑145 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 12‑140(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 12‑155 to 12‑170.
(3) This Part (except section 12‑140 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 12‑140(2) does not require an amount to be withheld from a payment of all or part of that share to the *investor.
12‑150 Limited application of section 12‑140 to payment under financial arrangement
(1) This section limits the extent to which section 12‑140 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 non‑transferable.
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 12‑140 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 14‑B.
(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.
12‑155 When investor may quote ABN as alternative
Section 12‑140 or 12‑145 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 12‑140(1)(b) or (c).
12‑160 Investment body unaware that exemption from quoting TFN has stopped applying
Section 12‑140 or 12‑145 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.
12‑165 Exception for fully franked dividend
Section 12‑140 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 202‑5 of the Income Tax Assessment Act 1997; and
(c) the *franking percentage for the distribution is 100%.
12‑170 Exception for payments below thresholds set by regulations
(1) Section 12‑140 or 12‑145 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
12‑175 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 non‑disclosure 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 12‑140 in priority to this section: see section 12‑5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16‑25.
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 12‑180.
12‑180 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 12‑175(1)(c) in this Schedule applies to the trustee of the trust; and
(c) paragraph 12‑175(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 non‑disclosure 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 12‑145 in priority to this section: see section 12‑5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16‑25.
Application of rest of Part
(3) This Part (other than section 12‑175) 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 12‑175.
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.
12‑185 Exception for payments below thresholds set by regulations
(1) Section 12‑175 or 12‑180 does not require an amount to be withheld if the payment (including the payment mentioned in subsection 12‑180(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
12‑190 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 29‑80(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 12‑140 or 12‑145 (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 12‑140 or 12‑145 if the other entity had not quoted as mentioned in subsection 12‑140(1) or section 12‑155; or
(c) would be covered by section 12‑140 or 12‑145 apart from section 12‑160, 12‑165 or 12‑170 (which are exceptions to sections 12‑140 and 12‑145); or
(d) is covered by section 12‑175 or 12‑180 (Payment of income of closely held trust where TFN not quoted); or
(e) would be covered by section 12‑175 or 12‑180 if the other entity had not quoted as mentioned in paragraph 12‑175(2)(a) or 12‑180(2)(a); or
(f) would be covered by section 12‑175 or 12‑180 apart from section 12‑185 (which is an exception to sections 12‑175 and 12‑180).
(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, ignore any part of Australia that is not in the indirect tax zone (within the meaning of the *GST Act).
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 the indirect tax zone under the A New Tax System (Australian Business Number) Act 1999.
Subdivision 12‑F—Dividend, interest and royalty payments
Table of sections
Dividends
12‑210 Dividend payment to overseas person
12‑215 Dividend payment received for foreign resident
12‑220 Application to part of a dividend
12‑225 Application to distribution by a liquidator or other person
Interest
12‑245 Interest payment to overseas person
12‑250 Interest payment received for foreign resident
12‑255 Interest payment derived by lender in carrying on business through overseas permanent establishment
12‑255 Interest payment derived by lender in carrying on business through overseas permanent establishment
12‑260 Lender to notify borrower if interest derived through overseas permanent establishment
Royalties
12‑280 Royalty payment to overseas person
12‑285 Royalty payment received for foreign resident
General
12‑300 Limits on amount withheld under this Subdivision
Dividends
12‑210 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 12‑300.
12‑215 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 12‑300.
(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.
12‑220 Application to part of a dividend
This Part applies to a part of a *dividend in the same way as to a dividend.
12‑225 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
12‑245 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 12‑300.
12‑250 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 12‑300.
(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.
12‑255 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 12‑260 of this Act that this section applies to the interest.
Note: For limits on the amount to be withheld, see section 12‑300.
12‑260 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 12‑255 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
12‑280 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 12‑300.
12‑285 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 12‑300.
(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
12‑300 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 12‑FA—Departing Australia superannuation payments
Table of sections
12‑305 Departing Australia superannuation payment
12‑310 Limits on amount withheld under this Subdivision
12‑305 Departing Australia superannuation payment
An entity must withhold an amount from a *departing Australia superannuation payment it pays to an entity.
12‑310 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 301‑175 of the Income Tax Assessment Act 1997 deals with the withholding tax liability.
Subdivision 12‑FAA—Excess untaxed roll‑over amount
Table of sections
12‑312 Untaxed roll‑over superannuation benefits
12‑313 Limits on amount withheld under this Subdivision
12‑312 Untaxed roll‑over superannuation benefits
An entity must withhold an amount from an *excess untaxed roll‑over amount it pays to an entity.
Note: An excess untaxed roll‑over amount is an amount that may form part of a roll‑over superannuation benefit that includes an element untaxed in the fund: see section 306‑15 of the Income Tax Assessment Act 1997.
12‑313 Limits on amount withheld under this Subdivision
This Subdivision does not require an entity:
(a) to withhold an amount from an *excess untaxed roll‑over amount if no *withholding tax is payable on the amount; or
(b) to withhold from an excess untaxed roll‑over amount more than the withholding tax payable on the amount (reduced by each amount already withheld from the excess untaxed roll‑over amount under this Subdivision).
Note: Section 306‑15 of the Income Tax Assessment Act 1997 deals with liability to this form of withholding tax.
Subdivision 12‑FB—Payments to foreign residents etc.
Table of sections
12‑315 Payment to foreign resident etc.
12‑317 Payment received for foreign resident etc.
12‑319 Exemptions from withholding obligations under this Subdivision
12‑315 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 12‑319(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 Governor‑General 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.
12‑317 Payment received for foreign resident etc.
(1) An entity (the intermediary) that receives a payment meeting the requirements set out in paragraphs 12‑315(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 12‑319(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.
12‑319 Exemptions from withholding obligations under this Subdivision
(1) The Commissioner may grant an entity an exemption in writing for the purposes of paragraphs 12‑315(1)(d) and 12‑317(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 *tax‑related 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 12‑FC—Seasonal Labour Mobility Program
Table of sections
12‑319A Payment to employee
12‑319A 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 12‑G—Payments in respect of mining on Aboriginal land, and natural resources
Table of sections
Mining on Aboriginal land
12‑320 Mining payment
Natural resources
12‑325 Natural resource payment
12‑330 Payer must ask Commissioner how much to withhold
12‑335 Commissioner may exempt from section 12‑330, subject to conditions
Mining on Aboriginal land
12‑320 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
12‑325 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 12‑330; or
(b) the amount worked out under a certificate in force under section 12‑335 that covers the payment;
as appropriate.
Exception
(3) Subsection (1) does not apply if:
(a) the Commissioner has notified the entity under section 12‑330 that the entity does not need to withhold an amount from the payment; or
(b) a certificate in force under section 12‑335 covers the payment and does not require the entity to withhold an amount from it.
12‑330 Payer must ask Commissioner how much to withhold
(1) An entity must not intentionally make a payment from which section 12‑325 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 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 12‑335.
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.
12‑335 Commissioner may exempt from section 12‑330, subject to conditions
(1) The Commissioner may give an entity a written certificate exempting the entity from complying with section 12‑330 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 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 12‑330(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 12‑H—Distributions of managed investment trust income
Guide to Subdivision 12‑H
12‑375 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
12‑385 Withholding by managed investment trusts
12‑390 Withholding by custodians and other entities
12‑395 Requirement to give notice or make information available
12‑400 Meaning of managed investment trust
12‑401 Trusts with wholesale membership
12‑402 Widely‑held requirements—ordinary case
12‑402A Widely‑held requirements for registered MIT—special case for entities covered by subsection 12‑402(3)
12‑402B Closely‑held restrictions
12‑403 Licensing requirements for unregistered MIS
12‑404 MIT participation interest
12‑405 Meaning of fund payment
12‑410 Entity to whom payment is made
12‑415 Failure to give notice or make information available: administrative penalty
12‑420 Agency rules
12‑425 Meaning of clean building managed investment trust
12‑430 Meaning of clean building
Operative provisions
12‑385 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 12‑410 must withhold an amount from the payment.
Note 1: An entity may be covered by section 12‑410 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 12‑410, 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 12‑395.
(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.
12‑390 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 12‑395; and
(b) the later payment is made to an entity covered by section 12‑410.
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 12‑410 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 12‑410, 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 12‑395.
(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 12‑395; 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 is 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 12‑395.
(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 12‑420, 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.
12‑395 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 12‑385 or subsection 12‑390(1) if the payment had been made to an entity covered by section 12‑410; and
(b) an amount is not required to be withheld from the payment because the recipient is not an entity covered by section 12‑410.
Note: An entity may be covered by section 12‑410 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 12‑415.
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 12‑390(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 12‑415.
12‑400 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 12‑401 (trusts with wholesale membership); or
(ii) if the trust is not covered by section 12‑401—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 12‑401—either or both of the widely‑held requirements in subsections 12‑402(1) and 12‑402A(1); or
(ii) if, at the time the payment is made, the trust is so registered and is not covered by section 12‑401—either or both of the widely‑held requirements in subsections 12‑402(1A) and 12‑402A(1); or
(iii) if, at the time the payment is made, the trust is not so registered and is covered by section 12‑401—the widely‑held requirements in subsection 12‑402(1); and
(g) the trust satisfies the closely‑held restrictions in subsection 12‑402B(1) in relation to the income year; and
(h) if the trust is covered by section 12‑401 at the time the payment is made—it satisfies the licensing requirements in section 12‑403 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 *wholly‑owned 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 12‑400(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.
Start‑up and wind‑down 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.
12‑401 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 12‑403(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%.
12‑402 Widely‑held 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 12‑400(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 12‑400(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 day‑to‑day 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 *wholly‑owned subsidiary of an entity mentioned in subparagraph (i) or (ii);
(g) an investment entity that satisfies all of these requirements:
(i) the entity is wholly‑owned by one or more *foreign government agencies, or is a wholly‑owned 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 wholly‑owned 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 12‑400(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).
12‑402A Widely‑held requirements for registered MIT—special case for entities covered by subsection 12‑402(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 12‑402(3) have a total *MIT participation interest in the trust of more than 25% at the time the payment mentioned in paragraph 12‑400(1)(a) is made; and
(b) at no time in the income year does an entity (other than an entity covered by subsection 12‑402(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 12‑402(3) has a *MIT participation interest (the first interest) in the trust; and
(ii) another entity covered by subsection 12‑402(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 12‑402(3) as an entity that is not a trust.
(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12‑402(6).
12‑402B Closely‑held 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 12‑400(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 12‑402(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 12‑402(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 12‑402(3) as an entity that is not a trust.
(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12‑402(6).
12‑403 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 12‑400(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 *wholly‑owned 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 12‑400(1)(d), be required under the Corporations Act 2001 to be a financial services licensee (within the meaning of section 761A of that Act).
12‑404 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).
12‑405 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 12‑F;
(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 102‑5(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.
12‑410 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.
12‑415 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 12‑395 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 12‑385(5) and paragraph 12‑390(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.
12‑420 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.
12‑425 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.
12‑430 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 short‑term 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 non‑compliance 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 non‑compliance period.
Division 13—Alienated personal services payments
Table of sections
13‑1 Object of this Division
13‑5 Payment to the Commissioner in respect of alienated personal services payments
13‑10 Alienated personal services payments
13‑15 Personal services payment remitters
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01
13‑1 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.
13‑5 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 12‑35.
Step 2. Identify the amounts that:
(a) are included in the individual’s assessable income under section 86‑15 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 12‑35.
Step 4. Work out the sum of all the amounts withheld under section 12‑35 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 12‑35 (step 1).
$15,000 of the amount NewIT received is included in Ron’s assessable income under section 86‑15 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 12‑35 (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 2000‑01 income year. See section 13‑20.
(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.
13‑10 Alienated personal services payments
An alienated personal services payment is a payment (including a payment in the form of a *non‑cash 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 non‑cash benefits, see sections 21 and 21A of the Income Tax Assessment Act 1936.
13‑15 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 87‑18 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.
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01
(1) Subject to subsection (2), if:
(a) a *personal services entity must, under section 13‑5, 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 14—Non‑cash benefits, and accruing gains, for which amounts must be paid to the Commissioner
Table of sections
14‑1 Object of this Subdivision
14‑5 Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
14‑10 Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit
14‑15 Payer can recover amount paid to the Commissioner
14‑50 Object of this Subdivision
14‑55 Liability for TFN withholding tax
14‑60 Investment body may recover TFN withholding tax from investor
14‑65 Application of rules in Division 18
14‑75 Overpayment of TFN withholding tax
14‑85 Other laws do not exempt from TFN withholding tax
Subdivision 14‑A—Non‑cash benefits
14‑1 Object of this Subdivision
The object of this Subdivision is:
(a) to put entities that provide *non‑cash 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 non‑cash benefits being provided; and
(b) in that way, to prevent entities from avoiding their obligations under Division 12 by providing non‑cash benefits.
14‑5 Provider of non‑cash 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 *non‑cash 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 12‑55. 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 83A‑B or 83A‑C of the Income Tax Assessment Act 1997 applies.
14‑10 Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit
If:
(a) an entity (the payer) receives in the form of a *non‑cash 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 12‑215, 12‑250 or 12‑285 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.
14‑15 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 14‑5.
(2) If the payer has paid an amount to the Commissioner under section 14‑10, 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 14‑B—Accruing gains
14‑50 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 12‑E (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.
14‑55 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 non‑transferable; and
(c) the term of the investment does not end during the income year; and
(d) section 12‑140 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 12‑150 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 255‑5(1)(b).
Note 2: An entity by whom it is payable must pay it to the Commissioner in accordance with Subdivision 16‑B: see subsection 16‑70(3). If any of it remains unpaid, the entity is liable to pay general interest charge: see section 16‑80.
Note 3: The Commissioner may defer the time at which TFN withholding tax becomes due and payable: see section 255‑10.
(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.
14‑60 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.
14‑65 Application of rules in Division 18
These provisions:
(a) subsection 18‑15(1) and sections 18‑20 and 18‑25 (about credits for amounts withheld from withholding payments); and
(b) section 18‑80 (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 12‑140(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 14‑55(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 18‑15, 18‑20 or 18‑25 will be in respect of the income year before the one in which the TFN withholding tax is paid.
14‑75 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 18‑15, 18‑20 or 18‑25 in respect of the amount overpaid.
14‑85 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 14‑C—Shares and rights under employee share schemes
Table of sections
14‑155 Liability for TFN withholding tax (ESS)
14‑160 Employer may give individual tax file numbers to provider
14‑165 Provider may recover TFN withholding tax (ESS) from individual
14‑170 Application of rules in Division 18
14‑175 Overpayment of TFN withholding tax (ESS)
14‑180 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997
14‑155 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 sections 83A‑33 and 83A‑35 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 83A‑115(3) and 83A‑120(3) of the Income Tax Assessment Act 1997 for the purposes of this Subdivision: see subsection 392‑5(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 255‑5(1)(b).
Note 2: The provider must pay the TFN withholding tax (ESS) to the Commissioner in accordance with Subdivision 16‑B: see subsection 16‑70(4). If any of it remains unpaid, the provider is liable to pay general interest charge: see section 16‑80.
Note 3: The Commissioner may defer the time at which TFN withholding tax (ESS) becomes due and payable: see section 255‑10.
14‑160 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 14‑155(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.
14‑165 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.
14‑170 Application of rules in Division 18
These provisions:
(a) subsection 18‑15(1) (about credits for amounts withheld from withholding payments); and
(b) sections 18‑65 and 18‑70 (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 12‑35 from a *withholding payment made to the individual and covered by that section.
14‑175 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 18‑15 in respect of the amount overpaid.
14‑180 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 83A‑130 (about takeovers and restructures);
(b) section 83A‑305 (about associates);
(c) section 83A‑320 (about trusts);
(d) section 83A‑325 (about relationships similar to employment);
(e) section 83A‑335 (about stapled securities);
(f) section 83A‑340 (about indeterminate rights).
Division 15—Working out the amount to withhold
Table of Subdivisions
Guide to Division 15
15‑A Working out how much to withhold
15‑B Withholding schedules and regulations
15‑C Declarations
Guide to Division 15
15‑1 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 15‑50 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 15‑A—Working out how much to withhold
Table of sections
15‑10 How much to withhold
15‑15 Variation of amounts required to be withheld
15‑10 How much to withhold
(1) The amount that Subdivision 12‑B, 12‑C or 12‑D requires to be withheld from a payment is to be worked out under the withholding schedules made under section 15‑25. 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 15‑50 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 15‑15.
(2) The amount that Subdivision 12‑E, 12‑F, 12‑FA, 12‑FAA, 12‑FB, 12‑FC or 12‑G (except one covered by section 12‑325) requires to be withheld from a payment is to be worked out under the regulations.
Note 1: The amount that section 12‑325 requires to be withheld is worked out under that section.
Note 2: The Commissioner may vary an amount required to be withheld. See section 15‑15.
(3) The amount that Subdivision 12‑H requires to be withheld from a payment or receipt is worked out under subsection 12‑385(2), 12‑390(2) or 12‑390(5).
15‑15 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 12‑140, 12‑145, 12‑175 or 12‑180 or Subdivision 12‑FC or 12‑H). If the Commissioner does so, the amount is varied accordingly.
Note 1: Section 12‑140 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 12‑175 and 12‑180 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 12‑145 is about an investor becoming presently entitled to income of a unit trust.
Note 3A: Subdivision 12‑FC is about the Seasonal Labour Mobility Program.
Note 4: Subdivision 12‑H 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 15‑B—Withholding schedules and regulations
Table of sections
15‑25 Commissioner’s power to make withholding schedules
15‑30 Matters to be considered when making withholding schedules
15‑35 Regulations about withholding
15‑25 Commissioner’s power to make withholding schedules
(1) For the purposes of collecting income tax and the other liabilities referred to in paragraphs 11‑1(b), (ca), (cd), (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 12‑B, 12‑C or 12‑D; 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.
15‑30 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 154‑20 (about repayments of accumulated HELP debt) of the Higher Education Support Act 2003 for any financial year starting on or after 1 July 2005;
(cd) the percentage referred to in the definition of applicable percentage of repayment income in subsection 46(1) (about repayments of accumulated TSL debt) of the Trade Support Loans Act 2014 for any financial year starting on or after 1 July 2014;
(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 *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.
15‑35 Regulations about withholding
(1) For the purposes of collecting income tax and the other liabilities referred to in section 11‑1, 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 12‑325).
(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 15‑C—Declarations
Table of sections
15‑50 Declarations
15‑50 Declarations
Declarations about matters
(1) An individual who:
(a) expects to receive a *withholding payment covered by Subdivision 12‑B, 12‑C or 12‑D, or an *alienated personal services payment to which Division 13 applies, from an entity; and
(b) wishes to have a matter relating to the individual’s income tax or other liability referred to in paragraph 11‑1(b), (ca), (cd), (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 any 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 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:
(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 16—Payer’s obligations and rights
Table of Subdivisions
Guide to Division 16
16‑A To withhold
16‑B To pay withheld amounts to the Commissioner
16‑BA To be registered
16‑C To provide information
16‑D Additional rights and obligations of entity that makes a payment
Guide to Division 16
16‑1 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 16‑A—To withhold
Table of sections
When to withhold
16‑5 When to withhold an amount
16‑20 Payer discharged from liability to recipient for amount withheld
Penalties for not withholding
16‑25 Failure to withhold: offence
16‑30 Failure to withhold: administrative penalty for entity other than exempt Australian government agency
16‑35 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty
16‑40 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment
16‑43 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.
When to withhold
16‑5 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 12‑145 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 12‑180 when a beneficiary is presently entitled to unpaid income of the trust.
Note 2: If section 12‑215, 12‑250 or 12‑285, or subsection 12‑390(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.
16‑20 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 18‑B.
Penalties for not withholding
16‑25 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 16‑30, 16‑35, 16‑40 and 16‑43 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 16‑30, 16‑35, 16‑40 and 16‑43 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.
16‑30 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.
16‑35 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 12‑F (about dividend, interest or royalty payment) or by Subdivision 12‑FB (about payments to foreign residents).
16‑40 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 12‑F (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.
16‑43 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 12‑FB (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 16‑B—To pay withheld amounts to the Commissioner
Table of sections
When and how to pay amounts to the Commissioner
16‑70 Entity to pay amounts to Commissioner
16‑75 When amounts must be paid to Commissioner
16‑80 Penalty for failure to pay within time
16‑85 How amounts are to be paid
Who is a large, medium or small withholder
16‑95 Meaning of large withholder
16‑100 Meaning of medium withholder
16‑105 Meaning of small withholder
16‑110 Commissioner may vary withholder’s status downwards
16‑115 Commissioner may vary withholder’s status upwards
When and how to pay amounts to the Commissioner
16‑70 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 14‑A must do so in accordance with section 16‑85.
(3) An entity that must pay an amount to the Commissioner under Subdivision 14‑B must do so in accordance with sections 16‑80 and 16‑85.
(4) An entity that must pay an amount to the Commissioner under Subdivision 14‑C must do so in accordance with sections 16‑80 and 16‑85.
Note: For provisions about collection and recovery of amounts payable to the Commissioner under this Part, see Part 4‑15.
16‑75 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 12‑175 or 12‑180) 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 12‑175 or 12‑180) 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 12‑175 or 12‑180); 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 12‑175 or 12‑180) 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 12‑175 or 12‑180) 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 12‑175 or 12‑180 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 16‑152(1) for the income year; or
(b) within a longer period allowed by the Commissioner.
16‑80 Penalty for failure to pay within time
If an amount that an entity must pay to the Commissioner under subsection 16‑70(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.
16‑85 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 16‑130.
Note 2: A penalty applies if a large withholder fails to pay electronically as required—see section 288‑20.
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
16‑95 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 *wholly‑owned group;
(ii) the amounts withheld by those companies during the threshold year exceeded $1 million; or
(d) the Commissioner determines under section 16‑115 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 2000‑01. See section 16‑125.
Exception
(2) However, the entity is not a *large withholder if the Commissioner determines under section 16‑110 that it is a *medium withholder or a *small withholder for the current month.
16‑100 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 16‑110 or 16‑115 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 2000‑01. See section 16‑125.
(2) However, the entity is not a *medium withholder if the Commissioner determines under section 16‑110 or 16‑115 that the entity is a *large withholder or a *small withholder for the current month.
16‑105 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.
16‑110 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.
16‑115 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 16‑BA—To be registered
Table of sections
Registration of withholders
16‑140 Withholders must be registered
16‑141 Registration and cancellation
Branch registration
16‑142 Branches may be registered
16‑143 Separate amounts for entities and branches
16‑144 Cancellation of branch registration
16‑145 Effect on branches of cancelling the entity’s registration
Registration of withholders
16‑140 Withholders must be registered
(1) An entity that must pay an amount to the Commissioner under:
(a) subsection 16‑70(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 non‑cash 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.
16‑141 Registration and cancellation
The Commissioner may register an entity or cancel the registration of an entity at any time.
Branch registration
16‑142 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 *non‑profit sub‑entity if:
(a) the branch or sub‑entity applies, in the *approved form, for registration; and
(b) the branch or sub‑entity has an *ABN or has applied for one.
A branch or sub‑entity that is so registered is also a PAYG withholding branch.
16‑143 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 non‑cash 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.
16‑144 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 16‑142(c) or (d).
16‑145 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 16‑C—To provide information
Table of sections
To the Commissioner
16‑150 Commissioner must be notified of amounts
16‑152 Annual reports—Withholding payments covered by section 12‑175
16‑153 Annual reports—other payments
To recipients of withholding payments
16‑155 Annual payment summary
16‑156 Annual payment summary for sections 12‑175 and 12‑180
16‑157 Payment summary for Subdivision 12‑H
16‑160 Part‑year payment summary
16‑165 Payment summaries for superannuation lump sums and payments for termination of employment
16‑166 Payment summary for a departing Australia superannuation payment
16‑167 Payment summary for payment to recipient who does not quote ABN
16‑170 Form and content of payment summary
16‑175 Penalty for not providing payment summary
16‑180 Commissioner may exempt entity from giving payment summary
16‑182 Definition of reportable employer superannuation contribution
To the Commissioner
16‑150 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 16‑70(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 non‑cash 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.
16‑152 Annual reports—Withholding payments covered by section 12‑175
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 12‑175 or 12‑180 (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 12‑175 or 12‑180 during an income year if the relevant beneficiary had not *quoted the beneficiary’s *tax file number as mentioned in paragraph 12‑175(2)(a) or 12‑180(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 16‑153(5), (6) and (7) apply to this section in the same way as they apply to section 16‑153.
16‑153 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 12‑190, Subdivision 12‑F (other than section 12‑215, 12‑250 or 12‑285), Subdivision 12‑FA, section 12‑315 or Subdivision 12‑FC or 12‑G; or
(b) the entity provided any *non‑cash 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 12‑190, Subdivision 12‑F (other than section 12‑215, 12‑250 or 12‑285), Subdivision 12‑FA, section 12‑315 or Subdivision 12‑G; or
(c) the entity received any payment from which an amount was required to be withheld under section 12‑215, 12‑250, 12‑285 or 12‑317; or
(d) the entity received any non‑cash 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 12‑215, 12‑250, 12‑285 or 12‑317.
(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 12‑B, 12‑C or 12‑D; 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 *non‑cash 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 12‑B, 12‑C or 12‑D; 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 16‑155 in respect of payments, *non‑cash benefits, *alienated personal services payments, *reportable fringe‑benefit 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 12‑H 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
16‑155 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 12‑85, 12‑175, 12‑180, 12‑190, 12‑215, 12‑250, 12‑285, 12‑317, 12‑385 or 12‑390) to the recipient; or
(b) during the year the payer received one or more withholding payments covered by section 12‑215, 12‑250 or 12‑285 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 12‑317 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 86‑40 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 16‑160; 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 16‑160; 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 16‑160.
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.
16‑156 Annual payment summary for sections 12‑175 and 12‑180
(1) A trustee must give a *payment summary to a beneficiary of the trust, if the trustee made any *withholding payments covered by section 12‑175 or 12‑180 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 16‑152(1) for the income year; or
(ii) within a longer period allowed by the Commissioner.
16‑157 Payment summary for Subdivision 12‑H
(1) An entity (the payer) must give a *payment summary to another entity (the recipient) if the payer made *withholding payments covered by section 12‑385 or 12‑390 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.
16‑160 Part‑year 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 12‑85, 12‑190, 12‑215, 12‑250, 12‑285, 12‑317, 12‑385 or 12‑390) that the payer made to the recipient during the year; or
(b) one or more withholding payments covered by section 12‑215, 12‑250 or 12‑285, 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 12‑317, 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 86‑15 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.
16‑165 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 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
16‑166 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.
16‑167 Payment summary for payment to recipient who does not quote ABN
(1) An entity (the payer) that makes a *withholding payment covered by section 12‑190 (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.
16‑170 Form and content of payment summary
(1) A payment summary (except one relating to section 12‑175 or 12‑180 or Subdivision 12‑H) 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 12‑175 or 12‑180 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 12‑H 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 16‑155(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 16‑155, 16‑156, 16‑160, 16‑165, 16‑166 or 16‑167 (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.
16‑175 Penalty for not providing payment summary
(1) An entity must not fail to comply with any requirements under section 16‑155, 16‑156, 16‑157, 16‑160, 16‑165, 16‑166 or 16‑167, or subsection 16‑170(1), (1AAA), (1AA), (2) or (3) (including any requirements varied by the Commissioner under subsection 16‑170(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.
16‑180 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 16‑155 to 16‑167. 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.
16‑182 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 16‑D—Additional rights and obligations of entity that makes a payment
Table of sections
16‑195 Payer’s right to recover amounts of penalty: certain withholding taxes
16‑195 Payer’s right to recover amounts of penalty: certain withholding taxes
(1) An entity that has paid an amount of penalty under section 16‑30, 16‑35 or 16‑40 for a *withholding payment covered by:
(a) Subdivision 12‑F (about a dividend, interest or royalty payment); or
(aa) section 12‑305 (about a departing Australia superannuation payment); or
(ab) Subdivision 12‑FC (Seasonal Labour Mobility Program); or
(b) section 12‑320 (about a mining payment); or
(c) Subdivision 12‑H (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 16‑30, 16‑35 and 16‑40 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 12‑415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12‑395 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 18—Recipient’s entitlements and obligations
Table of Subdivisions
18‑A Crediting withheld amounts
18‑B Refund of certain withheld amounts
18‑C Recipient’s obligations
18‑D Directors etc. of non‑complying companies
Subdivision 18‑A—Crediting withheld amounts
Guide to Subdivision 18‑A
18‑1 What this Subdivision is about
In general, an entity:
• that receives a withholding payment (except one covered by section 12‑215, 12‑250 or 12‑285, Subdivision 12‑FC, or subsection 12‑390(4)); or
• that is the foreign resident for which a withholding payment covered by section 12‑215, 12‑250 or 12‑285, Subdivision 12‑FC, or subsection 12‑390(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
18‑5 No credit for refunded amount
Entitlement to credits: income tax liability
18‑10 Application of sections 18‑15, 18‑20 and 18‑25
18‑15 Tax credit for recipient of withholding payments
18‑20 Tax credit where recipient is a partnership
18‑25 Tax credit where recipient is a trust
18‑27 Tax credit for alienated personal services payments
Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program
18‑30 Credit: dividend, interest or royalty
18‑32 Credit: amount attributable to fund payment
18‑33 Credit: Seasonal Labour Mobility Program
18‑35 Credit: penalty under section 12‑415, 16‑30, 16‑35 or 16‑40 or related general interest charge
18‑40 Credit: liability under Part 4‑25
Entitlement to credit: departing Australia superannuation payment
18‑42 Credit—departing Australia superannuation payment
Entitlement to credit: mining payment
18‑45 Credit—mining payment
Entitlement to credit: Petroleum resource rent tax
18‑55 Credit—Natural resource payments
General exception
18‑5 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 18‑B.
Note: See also Subdivision 18‑D (PAYG withholding non‑compliance 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 16‑70(1)).
Entitlement to credits: income tax liability
18‑10 Application of sections 18‑15, 18‑20 and 18‑25
(1) The rules set out in sections 18‑15, 18‑20 and 18‑25 do not apply to an *amount withheld from a *withholding payment that is covered by Subdivision 12‑F (about dividend, interest or royalties), Subdivision 12‑FA (about departing Australia superannuation payments), Subdivision 12‑FC (Seasonal Labour Mobility Program), section 12‑320 (about mining payments), Subdivision 12‑H (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 12‑317, apply sections 18‑15, 18‑20 and 18‑25 in relation to the payment as if the payment had been made to the likely foreign recipient mentioned in section 12‑317 (instead of to the intermediary mentioned in that section).
(3) If an entity withholds an amount from a *withholding payment as required by section 12‑325 (natural resource payments), apply sections 18‑15, 18‑20 and 18‑25 to the payment as if the entity had withheld only so much of that amount as was withheld in respect of tax.
Note: Section 18‑55 provides a credit for amounts withheld in respect of petroleum resource rent tax.
18‑15 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 16‑155(2)(aa) applies, the entitlement is treated as arising for the income year preceding the income year in which the withholding payment is made.
18‑20 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.
18‑25 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.
18‑27 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 86‑15 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
18‑30 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.
18‑32 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 12‑H.
(2) The amount of the credit is that amount or part.
(3) Subsection (4) applies if:
(a) all or part of an amount (the fund payment part) is represented by a payment that is a *fund payment; and
(b) under subsection 840‑805(4A) of the Income Tax Assessment Act 1997, a *foreign pension fund is taken, in respect of the fund payment part, to be a beneficiary in its own right, and not a beneficiary in the capacity of the trustee of another trust; and
(c) there is an *amount withheld from the fund payment under Subdivision 12‑H.
(4) For the purposes of paragraph (1)(b):
(a) treat the *foreign pension fund as having borne all or part of the amount withheld; and
(b) treat a beneficiary of the foreign pension fund as not having borne all or part of the amount withheld.
18‑33 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 12‑FC (about the Seasonal Labour Mobility Program).
(2) The amount of the credit is the *amount withheld.
18‑35 Credit: penalty under section 12‑415, 16‑30, 16‑35 or 16‑40 or related general interest charge
(1) If an entity has paid:
(a) an amount of penalty under section 16‑30 or 16‑40 to the Commissioner for a *withholding payment covered by Subdivision 12‑F or 12‑H; or
(b) an amount of *general interest charge under section 298‑25 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 16‑30 or 16‑35 to the Commissioner for a *withholding payment covered by Subdivision 12‑FC (Seasonal Labour Mobility Program); or
(b) an amount of *general interest charge under section 298‑25 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 840‑910 of the Income Tax Assessment Act 1997) in relation to the withholding payment, reduced by:
(i) any credits from an application of section 18‑33 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 12‑415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12‑395; or
(b) an amount of *general interest charge under section 298‑25 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 840‑810 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 298‑20;
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.
18‑40 Credit: liability under Part 4‑25
(1) If an entity has paid to the Commissioner:
(a) an amount of penalty under Subdivision 284‑C 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 298‑25 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 284‑C 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 298‑20;
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
18‑42 Credit—departing Australia superannuation payment
Credit—amount withheld
(1) If there is an *amount withheld from a *withholding payment that is covered by section 12‑305 (departing Australia superannuation payment), the entity liable to pay *withholding tax under section 301‑175 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 16‑30 or 16‑35 in relation to an *amount required to be withheld under section 12‑305 (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 298‑20 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
18‑45 Credit—mining payment
Credit—amount withheld
(1) If there is an *amount withheld from a *withholding payment that is covered by section 12‑320 (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 16‑30 or 16‑35 in relation to an *amount required to be withheld under section 12‑320 (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 298‑20 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: Petroleum resource rent tax
18‑55 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 12‑325 (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 18‑B—Refund of certain withheld amounts
Table of sections
18‑65 Refund of withheld amounts by the payer to the recipient
18‑70 Refund of withheld amounts by the Commissioner to the recipient
18‑80 Refund by Commissioner of amount withheld from payment in respect of investment
18‑65 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 86‑15 of the Income Tax Assessment Act 1997; or
(ii) paid the amount to the Commissioner purportedly under Division 14 for a *non‑cash 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 *non‑cash 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 non‑cash benefit was in respect of any of the following provisions:
(i) Subdivision 12‑B (payments for work or services);
(ii) Subdivision 12‑C (Payments for retirement or because of termination of employment);
(iii) Subdivision 12‑D (benefits and compensation payments);
(iv) section 12‑140 or 12‑145 (recipient does not quote tax file number or ABN);
(v) section 12‑175 or 12‑180 (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 16‑70(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).
18‑70 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 86‑15 of the Income Tax Assessment Act 1997; or
(ii) paid to the Commissioner an amount purportedly under Division 14 for a *non‑cash 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 18‑65 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 18‑65(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 *non‑cash 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.
18‑80 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 12‑140 or 12‑145 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 18‑C—Recipient’s obligations
18‑100 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 18‑D—Directors etc. of non‑complying companies
Table of sections
Object of Subdivision
18‑120 Object of Subdivision
PAYG withholding non‑compliance tax
18‑125 Directors of non‑complying companies
18‑130 Directors of non‑complying companies—tax reduced in certain circumstances
18‑135 Associates of directors of non‑complying companies
18‑140 Notices
18‑145 When PAYG withholding non‑compliance tax must be paid
18‑150 General interest charge payable on unpaid PAYG withholding non‑compliance tax
18‑155 Validity of decisions and evidence
18‑160 Rights of indemnity and contribution
Credits for later compliance
18‑165 Credits for later compliance—scope
18‑170 Credits for later compliance—Commissioner must give notice in certain circumstances
18‑175 Credits for later compliance—Commissioner may give notice
18‑180 Effect of earlier credits
Other provisions
18‑185 When Commissioner may give notice
18‑190 Review of decisions
Object of Subdivision
18‑120 Object of Subdivision
The object of this Subdivision is to reverse the economic benefit of a credit under section 18‑15 (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 16‑70(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 non‑compliance tax
18‑125 Directors of non‑complying companies
Liability to pay PAYG withholding non‑compliance tax
(1) An individual must pay *PAYG withholding non‑compliance 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 16‑70(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 non‑compliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16‑70(1); and
(d) a credit to which the individual is entitled under section 18‑15 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 16‑70(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 16‑70(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 16‑70(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 16‑70(1) on or before the last of those 30 days.
Amount of tax
(3) The amount of the *PAYG withholding non‑compliance 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).
18‑130 Directors of non‑complying companies—tax reduced in certain circumstances
(1) The amount of the *PAYG withholding non‑compliance tax the individual must pay as mentioned in section 18‑125 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 18‑140), 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 18‑125(1)(c) to the Commissioner under subsection 16‑70(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 18‑125(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 non‑compliance tax the individual must pay is treated as always having been that amount as reduced under this section.
18‑135 Associates of directors of non‑complying companies
Liability to pay PAYG withholding non‑compliance tax
(1) An individual must pay *PAYG withholding non‑compliance 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 16‑70(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 non‑compliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16‑70(1); and
(d) subsection (3) or (6) of this section applies; and
(e) a credit to which the individual is entitled under section 18‑15 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 16‑70(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 16‑70(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 16‑70(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 16‑70(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 18‑C 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 non‑payment 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 non‑compliance 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).
18‑140 Notices
Notices
(1) The Commissioner must not commence proceedings to recover:
(a) the *PAYG withholding non‑compliance tax an individual must pay for an income year in relation to a company as mentioned in section 18‑125 or 18‑135; or
(b) any related *general interest charge payable under section 18‑150;
unless, after the non‑compliance day mentioned in section 18‑125 or 18‑135, 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 non‑compliance 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 18‑135 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 269‑10(1) to pay to the Commissioner an *amount withheld to which paragraph 18‑125(1)(b) or 18‑135(1)(b) applies.
(4) The notice must specify:
(a) the company; and
(b) the income year; and
(c) the amount of the *PAYG withholding non‑compliance tax the individual must pay.
Effect of compliance between non‑compliance 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 18‑125(1)(c) or 18‑135(1)(c) to the Commissioner is discharged to any extent during the period:
(i) starting on the day after the non‑compliance 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 non‑compliance day:
(i) the individual would not have been required to pay the *PAYG withholding non‑compliance tax in relation to the company for the income year; or
(ii) the amount of PAYG withholding non‑compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non‑compliance tax.
(6) The amount of the *PAYG withholding non‑compliance 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 non‑compliance tax the individual would have been required to pay as mentioned in subparagraph (5)(b)(ii).
(7) The amount of the *PAYG withholding non‑compliance tax the individual must pay is treated as always having been that amount as reduced under subsection (6).
18‑145 When PAYG withholding non‑compliance tax must be paid
(1) The *PAYG withholding non‑compliance 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 4‑15 in this Schedule for collection and recovery provisions.
18‑150 General interest charge payable on unpaid PAYG withholding non‑compliance tax
If an amount of *PAYG withholding non‑compliance 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.
18‑155 Validity of decisions and evidence
Section 175 of the Income Tax Assessment Act 1936 (validity) applies to a decision of the Commissioner under section 18‑140 in this Schedule in the same way as it applies to an assessment.
18‑160 Rights of indemnity and contribution
(1) This section applies if an individual must pay *PAYG withholding non‑compliance tax as mentioned in section 18‑125 or 18‑135 because a company did not pay an amount to the Commissioner as mentioned in paragraph 18‑125(1)(c) or 18‑135(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 non‑compliance 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 18‑170 or 18‑175 in relation to the amount of PAYG withholding non‑compliance 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 non‑compliance tax the individual must pay in relation to the company for the income year as mentioned in section 18‑125 is reduced under section 18‑130.
Credits for later compliance
18‑165 Credits for later compliance—scope
Sections 18‑170, 18‑175 and 18‑180 apply if:
(a) an individual must pay *PAYG withholding non‑compliance 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 18‑125(1)(c) or 18‑135(1)(c); and
(b) the Commissioner gives to the individual a notice under section 18‑140 on a particular day (the tax notice day) in relation to the PAYG withholding non‑compliance 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.
18‑170 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 18‑165(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 non‑compliance tax in relation to the company for the income year; or
(b) the amount of PAYG withholding non‑compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non‑compliance tax.
Note 1: Subsection 18‑180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.
Note 2: The amount of PAYG withholding non‑compliance tax may be limited by:
(a) the conditions in subsections 18‑125(1) and (2) or 18‑135(1) to (6); or
(b) the limits on the amount of the tax in subsection 18‑125(3) or 18‑135(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 18‑175. See subsection 18‑180(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 non‑compliance tax.
(6) In any other case, the amount stated:
(a) must not exceed the amount of the *PAYG withholding non‑compliance tax; and
(b) must not exceed the amount of the discharge mentioned in paragraph 18‑165(c); and
(c) must not be less than the amount by which:
(i) the amount of the PAYG withholding non‑compliance tax; exceeds
(ii) the amount that would have been the amount of the PAYG withholding non‑compliance tax had the discharge mentioned in paragraph 18‑165(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.
18‑175 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 18‑180(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 non‑compliance 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 18‑170 or this section. See subsection 18‑180(1).
(b) must not exceed the amount of the discharge mentioned in paragraph 18‑165(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.
18‑180 Effect of earlier credits
(1) A reference in section 18‑170 or 18‑175, or subsection (2) of this section, to the amount of the *PAYG withholding non‑compliance tax is treated as being a reference to:
(a) the amount of the PAYG withholding non‑compliance tax; less
Note: The amount of the PAYG withholding non‑compliance tax may, in a case to which section 18‑125 applies, be affected by reductions under section 18‑130.
(b) the total of any credits to which the individual is entitled in relation to the amount of PAYG withholding non‑compliance tax because of notices given to the individual under section 18‑170 or 18‑175 before the credit notice day.
(2) The Commissioner must not give a written notice to the individual under section 18‑170 or 18‑175 if, on the day before the credit notice day, the amount of the *PAYG withholding non‑compliance tax is nil.
Other provisions
18‑185 When Commissioner may give notice
The Commissioner may give a notice to the individual on a day (the notice day) under section 18‑130, 18‑140, 18‑170 or 18‑175 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 18‑125 or 18‑135; or
(b) if the notice would:
(i) in the case of a notice under section 18‑130—result in the individual being liable to pay *PAYG withholding non‑compliance tax or an increased amount of PAYG withholding non‑compliance tax; or
(ii) in the case of a notice under section 18‑140—result in the Commissioner being able to commence proceedings to recover PAYG withholding non‑compliance tax, or an increased amount of PAYG withholding non‑compliance tax, from the individual; or
(iii) in the case of a notice under section 18‑170 or 18‑175—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 18‑125 or 18‑135; or
(c) if the notice would:
(i) in the case of a notice under section 18‑130—result in the individual being liable to pay no PAYG withholding non‑compliance tax, or a reduced amount of PAYG withholding non‑compliance tax; or
(ii) in the case of a notice under section 18‑140—result in the Commissioner no longer being able to commence proceedings to recover PAYG withholding non‑compliance tax, or result in the Commissioner being able to commence proceedings to recover a reduced amount of PAYG withholding non‑compliance tax, from the individual; or
(iii) in the case of a notice under section 18‑170 or 18‑175—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 18‑125 or 18‑135; 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.
18‑190 Review of decisions
An individual to whom the Commissioner gives a notice under section 18‑140 in relation to an amount of *PAYG withholding non‑compliance tax may object, under Part IVC of this Act, against a decision of the Commissioner under section 18‑130, 18‑140, 18‑170 or 18‑175 in relation to the PAYG withholding non‑compliance tax if the individual is dissatisfied with the decision.
Division 20—Other matters
Table of Subdivisions
20‑B Offences
20‑D Review of decisions
Subdivision 20‑B—Offences
Table of sections
20‑35 Offences
20‑40 Joining of charges
20‑45 Offences that would otherwise be committed by a partnership or unincorporated company
20‑35 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 12‑215, 12‑250, 12‑285 or 12‑317, or subsection 12‑390(4), and was made to another person; or
(b) the payment is covered by section 12‑215, 12‑250, 12‑285 or 12‑317, or subsection 12‑390(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 12‑H); 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 12‑H, 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.
20‑40 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.
20‑45 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).
Subdivision 20‑D—Review of decisions
20‑80 Reviewable decisions
A person who is dissatisfied with any of the following decisions of the Commissioner may object against the decision in the manner set out in Part IVC.
