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Taxation Administration Act 1953

Authoritative Version
  • - C2013C00574
  • In force - Superseded Version
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Act No. 1 of 1953 as amended, taking into account amendments up to Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013
An Act to provide for the administration of certain Acts relating to Taxation, and for purposes connected therewith
Administered by: Treasury
Registered 27 Sep 2013
Start Date 01 Jul 2013
End Date 11 Mar 2014
Table of contents.

Taxation Administration Act 1953

No. 1, 1953 as amended

Compilation start date:                     1 July 2013

Includes amendments up to:            Act No. 124, 2013

This compilation has been split into 3 volumes

Volume 1:       sections 1–18

Volume 2:       Schedule

Volume 3:       Endnotes

Each volume has its own contents

 

About this compilation

This compilation

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

This compilation was prepared on 27 September 2013.

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

Uncommenced amendments

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

Application, saving and transitional provisions for provisions and amendments

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

Modifications

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

Provisions ceasing to have effect

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

  

  

  


Contents

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

Chapter 2—Collection, recovery and administration of income tax      1

Part 2‑1—Introduction to the Pay as you go (PAYG) system                1

Division 6—Guide to Parts 2‑5 and 2‑10                                                              1

6‑1......................... What Parts 2‑5 and 2‑10 are about...................................... 1

6‑5......................... The Pay as you go (PAYG) system................................... 1

6‑10....................... How the amounts collected are dealt with........................... 2

Part 2‑5—Pay as you go (PAYG) withholding                                               3

Division 10—Guide to Part 2‑5                                                                               3

10‑1....................... What this Part is about........................................................ 3

10‑5....................... Summary of withholding payments.................................... 3

Division 11—Preliminary matters                                                                        6

11‑1....................... Object of this Part............................................................... 6

11‑5....................... Constructive payment......................................................... 6

Division 12—Payments from which amounts must be withheld                     7

Subdivision 12‑A—General rules                                                                           7

12‑1....................... General exceptions.............................................................. 7

12‑5....................... What to do if more than one provision requires a withholding 8

12‑7....................... Division does not apply to alienated personal services payments             10

12‑10..................... Division does not apply to non‑cash benefits................... 10

12‑20..................... Application of Division and regulations to non‑share dividends              11

Subdivision 12‑B—Payments for work and services                                      11

12‑35..................... Payment to employee........................................................ 11

12‑40..................... Payment to company director............................................ 11

12‑45..................... Payment to office holder................................................... 12

12‑47..................... Payment to religious practitioners..................................... 12

12‑50..................... Return to work payment................................................... 12

12‑55..................... Voluntary agreement to withhold...................................... 13

12‑60..................... Payment under labour hire arrangement, or specified by regulations       14

Subdivision 12‑C—Payments for retirement or because of termination of employment            14

12‑80..................... Superannuation income streams and annuities.................. 14

12‑85..................... Superannuation lump sums and payments for termination of employment              15

12‑90..................... Unused leave payments.................................................... 15

Subdivision 12‑D—Benefit and compensation payments                               15

12‑110................... Social Security or other benefit payment........................... 15

12‑115................... Commonwealth education or training payment................. 16

12‑120................... Compensation, sickness or accident payment................... 16

Subdivision 12‑E—Payments where TFN or ABN not quoted                      16

Payment in respect of investment                                                                         17

12‑140................... Recipient does not quote tax file number.......................... 17

12‑145................... Investor becoming presently entitled to income of a unit trust  18

12‑150................... Limited application of section 12‑140 to payment under financial arrangement       18

12‑155................... When investor may quote ABN as alternative.................. 19

12‑160................... Investment body unaware that exemption from quoting TFN has stopped applying                20

12‑165................... Exception for fully franked dividend................................ 20

12‑170................... Exception for payments below thresholds set by regulations 20

Payment of income of closely held trust where TFN not quoted                  21

12‑175................... Trustee distributes income of closely held trust................ 21

12‑180................... Beneficiary becomes presently entitled to income of closely held trust    22

12‑185................... Exception for payments below thresholds set by regulations 24

Payment for a supply                                                                                              24

12‑190................... Recipient does not quote ABN......................................... 24

Subdivision 12‑F—Dividend, interest and royalty payments                        27

Dividends           28

12‑210................... Dividend payment to overseas person.............................. 28

12‑215................... Dividend payment received for foreign resident............... 28

12‑220................... Application to part of a dividend....................................... 29

12‑225................... Application to distribution by a liquidator or other person 29

Interest               29

12‑245................... Interest payment to overseas person................................. 29

12‑250................... Interest payment received for foreign resident.................. 29

12‑255................... Interest payment derived by lender in carrying on business through overseas permanent establishment 30

12‑260................... Lender to notify borrower if interest derived through overseas permanent establishment        30

Royalties            31

12‑280................... Royalty payment to overseas person................................. 31

12‑285................... Royalty payment received for foreign resident.................. 31

General              32

12‑300................... Limits on amount withheld under this Subdivision........... 32

Subdivision 12‑FA—Departing Australia superannuation payments         32

12‑305................... Departing Australia superannuation payment................... 33

12‑310................... Limits on amount withheld under this Subdivision........... 33

Subdivision 12‑FAA—Excess untaxed roll‑over amount                               33

12‑312................... Untaxed roll‑over superannuation benefits....................... 33

12‑313................... Limits on amount withheld under this Subdivision........... 33

Subdivision 12‑FB—Payments to foreign residents etc.                                 34

12‑315................... Payment to foreign resident etc......................................... 34

12‑317................... Payment received for foreign resident etc......................... 35

12‑319................... Exemptions from withholding obligations under this Subdivision           36

Subdivision 12‑FC—Seasonal Labour Mobility Program                            37

12‑319A................ Payment to employee........................................................ 37

Subdivision 12‑G—Payments in respect of mining on Aboriginal land, and natural resources                38

Mining on Aboriginal land                                                                                    38

12‑320................... Mining payment................................................................ 38

Natural resources                                                                                                     38

12‑325................... Natural resource payment................................................. 38

12‑330................... Payer must ask Commissioner how much to withhold..... 39

12‑335................... Commissioner may exempt from section 12‑330, subject to conditions   40

Subdivision 12‑H—Distributions of managed investment trust income     40

Guide to Subdivision 12‑H                                                                                     40

12‑375................... What this Subdivision is about......................................... 40

Operative provisions                                                                                               42

12‑385................... Withholding by managed investment trusts...................... 42

12‑390................... Withholding by custodians and other entities.................... 43

12‑395................... Requirement to give notice or make information available 47

12‑400................... Meaning of managed investment trust.............................. 49

12‑401................... Trusts with wholesale membership................................... 51

12‑402................... Widely‑held requirements—ordinary case........................ 52

12‑402A................ Widely‑held requirements for registered MIT—special case for entities covered by subsection 12‑402(3).......................................................................................... 54

12‑402B................ Closely‑held restrictions................................................... 55

12‑403................... Licensing requirements for unregistered MIS................... 56

12‑404................... MIT participation interest.................................................. 57

12‑405................... Meaning of fund payment................................................. 57

12‑410................... Entity to whom payment is made...................................... 59

12‑415................... Failure to give notice or make information available: administrative penalty            60

12‑420................... Agency rules..................................................................... 60

12‑425................... Meaning of clean building managed investment trust...... 60

12‑430................... Meaning of clean building................................................ 61

Division 13—Alienated personal services payments                                       63

13‑1....................... Object of this Division...................................................... 63

13‑5....................... Payment to the Commissioner in respect of alienated personal services payments   63

13‑10..................... Alienated personal services payments............................... 66

13‑15..................... Personal services payment remitters................................. 66

13‑20..................... Time for payments to Commissioner for alienated personal services payments made during 2000‑01    67

Division 14—Non‑cash benefits, and accruing gains, for which amounts must be paid to the Commissioner       69

Subdivision 14‑A—Non‑cash benefits                                                                 69

14‑1....................... Object of this Subdivision................................................ 69

14‑5....................... Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding....................................................................... 69

14‑10..................... Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit              70

14‑15..................... Payer can recover amount paid to the Commissioner........ 71

Subdivision 14‑B—Accruing gains                                                                      71

14‑50..................... Object of this Subdivision................................................ 71

14‑55..................... Liability for TFN withholding tax..................................... 71

14‑60..................... Investment body may recover TFN withholding tax from investor          73

14‑65..................... Application of rules in Division 18................................... 73

14‑75..................... Overpayment of TFN withholding tax.............................. 74

14‑85..................... Other laws do not exempt from TFN withholding tax...... 74

Subdivision 14‑C—Shares and rights under employee share schemes       74

14‑155................... Liability for TFN withholding tax (ESS).......................... 74

14‑160................... Employer may give individual tax file numbers to provider 76

14‑165................... Provider may recover TFN withholding tax (ESS) from individual         76

14‑170................... Application of rules in Division 18................................... 76

14‑175................... Overpayment of TFN withholding tax (ESS)................... 76

14‑180................... Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997  77

Division 15—Working out the amount to withhold                                         78

Guide to Division 15                                                                                                78

15‑1....................... What this Division is about............................................... 78

Subdivision 15‑A—Working out how much to withhold                                78

15‑10..................... How much to withhold..................................................... 78

15‑15..................... Variation of amounts required to be withheld................... 79

Subdivision 15‑B—Withholding schedules and regulations                          80

15‑25..................... Commissioner’s power to make withholding schedules... 80

15‑30..................... Matters to be considered when making withholding schedules                81

15‑35..................... Regulations about withholding......................................... 81

Subdivision 15‑C—Declarations                                                                          82

15‑50..................... Declarations...................................................................... 82

Division 16—Payer’s obligations and rights                                                     84

Guide to Division 16                                                                                                84

16‑1....................... What this Division is about............................................... 84

Subdivision 16‑A—To withhold                                                                            84

When to withhold                                                                                                      85

16‑5....................... When to withhold an amount............................................ 85

16‑20..................... Payer discharged from liability to recipient for amount withheld             85

Penalties for not withholding                                                                                85

16‑25..................... Failure to withhold: offence.............................................. 85

16‑30..................... Failure to withhold: administrative penalty for entity other than exempt Australian government agency 86

16‑35..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty.............................. 87

16‑40..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment................................................ 87

16‑43..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc............................................................ 88

Subdivision 16‑B—To pay withheld amounts to the Commissioner           88

When and how to pay amounts to the Commissioner                                      89

16‑70..................... Entity to pay amounts to Commissioner........................... 89

16‑75..................... When amounts must be paid to Commissioner................. 89

16‑80..................... Penalty for failure to pay within time................................ 91

16‑85..................... How amounts are to be paid............................................. 91

Who is a large, medium or small withholder                                                    92

16‑95..................... Meaning of large withholder............................................ 92

16‑100................... Meaning of medium withholder........................................ 93

16‑105................... Meaning of small withholder............................................ 93

16‑110................... Commissioner may vary withholder’s status downwards 94

16‑115................... Commissioner may vary withholder’s status upwards..... 94

Subdivision 16‑BA—To be registered                                                                 95

Registration of withholders                                                                                   96

16‑140................... Withholders must be registered......................................... 96

16‑141................... Registration and cancellation............................................. 96

Branch registration                                                                                                 96

16‑142................... Branches may be registered.............................................. 96

16‑143................... Separate amounts for entities and branches....................... 97

16‑144................... Cancellation of branch registration.................................... 98

16‑145................... Effect on branches of cancelling the entity’s registration.. 98

Subdivision 16‑C—To provide information                                                     98

To the Commissioner                                                                                              99

16‑150................... Commissioner must be notified of amounts...................... 99

16‑152................... Annual reports—Withholding payments covered by section 12‑175       99

16‑153................... Annual reports—other payments.................................... 100

To recipients of withholding payments                                                             102

16‑155................... Annual payment summary.............................................. 102

16‑156................... Annual payment summary for sections 12‑175 and 12‑180 104

16‑157................... Payment summary for Subdivision 12‑H....................... 105

16‑160................... Part‑year payment summary........................................... 105

16‑165................... Payment summaries for superannuation lump sums and payments for termination of employment         106

16‑166................... Payment summary for a departing Australia superannuation payment     107

16‑167................... Payment summary for payment to recipient who does not quote ABN    107

16‑170................... Form and content of payment summary.......................... 107

16‑175................... Penalty for not providing payment summary.................. 109

16‑180................... Commissioner may exempt entity from giving payment summary           109

16‑182................... Definition of reportable employer superannuation contribution             109

Subdivision 16‑D—Additional rights and obligations of entity that makes a payment                111

16‑195................... Payer’s right to recover amounts of penalty: certain withholding taxes    111

Division 18—Recipient’s entitlements and obligations                                 112

Subdivision 18‑A—Crediting withheld amounts                                            112

Guide to Subdivision 18‑A                                                                                    112

18‑1....................... What this Subdivision is about....................................... 112

General exception                                                                                                  113

18‑5....................... No credit for refunded amount........................................ 113

Entitlement to credits: income tax liability                                                     114

18‑10..................... Application of sections 18‑15, 18‑20 and 18‑25............. 114

18‑15..................... Tax credit for recipient of withholding payments............ 114

18‑20..................... Tax credit where recipient is a partnership...................... 115

18‑25..................... Tax credit where recipient is a trust................................. 115

18‑27..................... Tax credit for alienated personal services payments........ 117

Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or Seasonal Labour Mobility Program                                                                    118

18‑30..................... Credit: dividend, interest or royalty................................. 118

18‑32..................... Credit: amount attributable to fund payment................... 118

18‑33..................... Credit: Seasonal Labour Mobility Program.................... 118

18‑35..................... Credit: penalty under section 12‑415, 16‑30, 16‑35 or 16‑40 or related general interest charge               119

18‑40..................... Credit: liability under Part 4‑25....................................... 121

Entitlement to credit: departing Australia superannuation payment       122

18‑42..................... Credit—departing Australia superannuation payment..... 122

Entitlement to credit: mining payment                                                             122

18‑45..................... Credit—mining payment................................................. 122

Entitlement to credit: Minerals resource rent tax                                          124

18‑49..................... Credit—Natural resource payments................................ 124

Entitlement to credit: Petroleum resource rent tax                                       124

18‑55..................... Credit—Natural resource payments................................ 124

Subdivision 18‑B—Refund of certain withheld amounts                             124

18‑65..................... Refund of withheld amounts by the payer to the recipient 125

18‑70..................... Refund of withheld amounts by the Commissioner to the recipient         128

18‑80..................... Refund by Commissioner of amount withheld from payment in respect of investment           129

Subdivision 18‑C—Recipient’s obligations                                                      129

18‑100................... Obligation to keep payment summary............................. 129

Subdivision 18‑D—Directors etc. of non‑complying companies                130

Object of Subdivision                                                                                            131

18‑120................... Object of Subdivision..................................................... 131

PAYG withholding non‑compliance tax                                                           131

18‑125................... Directors of non‑complying companies.......................... 131

18‑130................... Directors of non‑complying companies—tax reduced in certain circumstances       132

18‑135................... Associates of directors of non‑complying companies..... 134

18‑140................... Notices............................................................................ 137

18‑145................... When PAYG withholding non‑compliance tax must be paid.. 139

18‑150................... General interest charge payable on unpaid PAYG withholding non‑compliance tax               139

18‑155................... Validity of decisions and evidence.................................. 139

18‑160................... Rights of indemnity and contribution.............................. 140

Credits for later compliance                                                                               141

18‑165................... Credits for later compliance—scope............................... 141

18‑170................... Credits for later compliance—Commissioner must give notice in certain circumstances          141

18‑175................... Credits for later compliance—Commissioner may give notice 143

18‑180................... Effect of earlier credits.................................................... 144

Other provisions                                                                                                     144

18‑185................... When Commissioner may give notice............................. 144

18‑190................... Review of decisions........................................................ 146

Division 20—Other matters                                                                                 147

Subdivision 20‑B—Offences                                                                                147

20‑35..................... Offences......................................................................... 147

20‑40..................... Joining of charges........................................................... 148

20‑45..................... Offences that would otherwise be committed by a partnership or unincorporated company    149

Subdivision 20‑D—Review of decisions                                                            149

20‑80..................... Reviewable decisions...................................................... 149

Division 21—Entitlements relating to insolvent ADIs and general insurers 151

Guide to Division 21                                                                                              151

21‑1....................... What this Division is about............................................. 151

Subdivision 21‑A—Treatment of some payments by APRA                       151

21‑5....................... APRA treated like ADI or general insurance company.. 151

Part 2‑10—Pay as you go (PAYG) instalments                                          153

Division 45—Instalment payments                                                                    153

Guide to Division 45                                                                                              154

45‑1....................... What this Division is about............................................. 154

Subdivision 45‑A—Basic rules                                                                            155

45‑5....................... Object of this Part........................................................... 155

45‑10..................... Application of Part.......................................................... 156

45‑15..................... Liability for instalments.................................................. 157

45‑20..................... Information to be given to the Commissioner by certain payers               157

45‑25..................... Penalty for failure to notify Commissioner..................... 158

45‑30..................... Credit for instalments payable......................................... 158

Subdivision 45‑B—When instalments are due                                                159

45‑50..................... Liability to pay instalments............................................. 159

45‑60..................... Meaning of instalment quarter....................................... 160

45‑61..................... When quarterly instalments are due—payers of quarterly instalments     161

45‑65..................... Meaning of instalment month......................................... 162

45‑67..................... When monthly instalments are due—payers of monthly instalments       162

45‑70..................... When annual instalments are due.................................... 162

45‑72..................... Means of payment of instalment..................................... 163

45‑75..................... Instalments recoverable in same way as income tax........ 163

45‑80..................... General interest charge on late payment.......................... 163

45‑90..................... Commissioner may withdraw instalment rate................. 163

Subdivision 45‑C—Working out instalment amounts                                   164

45‑110................... How to work out amount of quarterly instalment on instalment income basis         164

45‑112................... Amount of instalment for quarterly payer who pays on basis of GDP‑adjusted notional tax   165

45‑114................... How to work out amount of monthly instalment............ 165

45‑115................... How to work out amount of annual instalment............... 167

45‑120................... Meaning of instalment income........................................ 168

Subdivision 45‑D—Quarterly payers                                                                171

45‑125................... Quarterly payer who pays instalments on the basis of instalment income                171

45‑130................... Quarterly payer who pays on the basis of GDP‑adjusted notional tax     173

45‑132................... Quarterly payer who pays 4 instalments annually on the basis of GDP‑adjusted notional tax 175

45‑134................... Quarterly payer who pays 2 instalments annually on the basis of GDP‑adjusted notional tax 176

Subdivision 45‑DA—Monthly payers                                                                177

45‑136................... Monthly payer................................................................ 177

45‑138................... Monthly payer requirement............................................. 178

Subdivision 45‑E—Annual payers                                                                     180

When you start and stop being an annual payer                                            180

45‑140................... Choosing to pay annual instalments................................ 180

45‑145................... Meaning of instalment group......................................... 181

45‑150................... Entity stops being annual payer if involved with GST registration or instalment group           182

45‑155................... Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly      183

45‑160................... Head company of a consolidated group stops being annual payer           184

Subdivision 45‑F—Varying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income                                                                                         184

45‑200................... Application..................................................................... 184

45‑205................... Choosing a varied instalment rate................................... 185

45‑210................... Notifying Commissioner of varied instalment rate.......... 185

45‑215................... Credit on using varied rate in certain cases..................... 186

Subdivision 45‑G—General interest charge payable in certain cases if instalments are too low              187

45‑225................... Effect of Subdivision in relation to monthly payers........ 187

45‑230................... Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate     187

45‑232................... Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax........................................................................................ 189

45‑233................... Reduction in GIC liability under section 45‑232 if shortfall is made up in later instalment      196

45‑235................... Liability to GIC on shortfall in annual instalment........... 197

45‑240................... Commissioner may remit general interest charge............ 199

Subdivision 45‑H—Partnership income                                                           199

45‑260................... Instalment income for a period in which you are in a partnership            199

Subdivision 45‑I—Trust income included in instalment income of beneficiary            200

45‑280................... Instalment income for a period in which you are a beneficiary of a trust  200

45‑285................... Instalment income includes distributions by certain resident unit trusts   202

45‑286................... Instalment income includes distributions by certain managed investment trusts       204

45‑287................... When trusts are disqualified due to concentrated ownership 205

45‑288................... Resident investment trusts for beneficiaries who are absolutely entitled  206

45‑290................... Exceptions to exclusion of trust capital gains from beneficiary’s instalment income                207

Subdivision 45‑J—How Commissioner works out your instalment rate and notional tax          207

45‑320................... Working out instalment rate............................................ 207

45‑325................... Working out your notional tax........................................ 208

45‑330................... Working out your adjusted taxable income.................... 210

45‑335................... Working out your adjusted withholding income............. 212

45‑340................... Adjusted tax on adjusted taxable income or on adjusted withholding income           212

Subdivision 45‑K—How Commissioner works out your benchmark instalment rate and benchmark tax             214

45‑355................... When Commissioner works out benchmark instalment rate and benchmark tax      214

45‑360................... How Commissioner works out benchmark instalment rate 215

45‑365................... Working out your benchmark tax................................... 215

45‑370................... Working out your adjusted assessed taxable income for the variation year             216

45‑375................... Adjusted assessed tax on adjusted assessed taxable income 217

Subdivision 45‑L—How Commissioner works out amount of quarterly instalment on basis of GDP‑adjusted notional tax                                                                                                 218

45‑400................... Working out amount of instalment—payers of 4 quarterly instalments    219

45‑402................... Working out amount of instalment—payers of 2 quarterly instalments    220

45‑405................... Working out your GDP‑adjusted notional tax................ 222

Subdivision 45‑M—How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax                                                                                                 224

45‑410................... Working out amount of instalment—payers of 4 quarterly instalments    224

45‑412................... Working out amount of instalment—payers of 2 quarterly instalments    226

45‑415................... Estimating your benchmark tax....................................... 227

45‑420................... Credit in certain cases where amount of instalment is nil 228

Subdivision 45‑N—How this Part applies to the trustee of a trust             228

Trustees to whom this Part applies                                                                    229

45‑450................... Trustees to whom a single instalment rate is given......... 229

45‑455................... Trustees to whom several instalment rates are given....... 229

45‑460................... Rest of Subdivision applies only to multi‑rate trustees... 231

45‑465................... Meaning of instalment income........................................ 231

45‑468................... Multi‑rate trustee may pay quarterly instalments............. 231

How Commissioner works out instalment rate and notional tax for a multi‑rate trustee            231

45‑470................... Working out instalment rate............................................ 231

45‑473................... Commissioner must notify you of notional tax............... 232

45‑475................... Working out your notional tax........................................ 232

45‑480................... Working out your adjusted taxable income.................... 233

45‑483................... Meaning of reduced beneficiary’s share and reduced no beneficiary’s share         234

45‑485................... Working out your adjusted withholding income............. 234

How Commissioner works out benchmark instalment rate and benchmark tax for a multi‑rate trustee                235

45‑525................... When Commissioner works out benchmark instalment rate and benchmark tax      235

45‑530................... How Commissioner works out benchmark instalment rate 235

45‑535................... Working out your benchmark tax................................... 236

Subdivision 45‑P—Anti‑avoidance rules                                                          236

45‑595................... Object of this Subdivision.............................................. 237

45‑597................... Effect of Subdivision in relation to instalment months.... 237

45‑600................... General interest charge on tax benefit relating to instalments 237

45‑605................... When do you get a tax benefit from a scheme?............... 239

45‑610................... What is your tax position for an income year?................ 239

45‑615................... What is your hypothetical tax position for an income year? 242

45‑620................... Amount on which GIC is payable, and period for which it is payable     242

45‑625................... Credit if you also got a tax detriment from the scheme... 243

45‑630................... When do you get a tax detriment from a scheme?........... 244

45‑635................... No tax benefit or detriment results from choice for which income tax law expressly provides                245

45‑640................... Commissioner may remit general interest charge in special cases            246

Subdivision 45‑Q—General rules for consolidated groups                         247

Guide to Subdivision 45‑Q                                                                                   247

45‑700................... What this Subdivision is about....................................... 247

Application of Subdivision                                                                                   248

45‑703................... Effect of this Subdivision and Subdivision 45‑R in relation to monthly payers       248

45‑705................... Application of Subdivision to head company................. 249

Usual operation of this Part for consolidated group members                  253

45‑710................... Single entity rule............................................................. 253

45‑715................... When instalments are due—modification of section 45‑61 253

45‑720................... Head company cannot be an annual payer—modification of section 45‑140           253

Membership changes                                                                                             254

45‑740................... Change of head company................................................ 254

45‑755................... Entry rule (for an entity that becomes a subsidiary member of a consolidated group)              256

45‑760................... Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)           257

45‑775................... Commissioner’s power to work out different instalment rate or GDP‑adjusted notional tax   258

Subdivision 45‑R—Special rules for consolidated groups                           260

Guide to Subdivision 45‑R                                                                                    260

45‑850................... What this Subdivision is about....................................... 260

Operative provisions                                                                                             261

45‑855................... Section 701‑1 disregarded for certain purposes.............. 261

45‑860................... Member having a different instalment period.................. 261

45‑865................... Credit rule....................................................................... 263

45‑870................... Head company’s liability to GIC on shortfall in quarterly instalment       264

45‑875................... Other rules about the general interest charge................... 267

45‑880................... Continued application of Subdivision 45‑Q to the head company of an acquired group          267

45‑885................... Early application of Subdivision 45‑Q to the head company of a new group           269

Subdivision 45‑S—MEC groups                                                                         271

Guide to Subdivision 45‑S                                                                                    271

45‑900................... What this Subdivision is about....................................... 271

Preliminary                                                                                                             272

45‑905................... Objects of Subdivision................................................... 272

General modification rules                                                                                  272

45‑910................... Extended operation of Part to cover MEC groups.......... 272

Extended operation of Subdivision 45‑Q                                                         273

45‑913................... Sections 45‑705 and 45‑740 do not apply to members of MEC groups  273

45‑915................... Application of Subdivision 45‑Q to provisional head company               273

45‑917................... Assumption for applying section 45‑710 (single entity rule) 277

45‑920................... Change of provisional head company............................. 277

45‑922................... Life insurance company.................................................. 280

Extended operation of Subdivision 45‑R                                                          280

45‑925................... Additional modifications of sections 45‑855 and 45‑860 280

45‑930................... Modifications of sections 45‑865 and 45‑870 and a related provision     280

45‑935................... Additional modifications of section 45‑885.................... 281

Part 2‑30—Collecting Medicare levy with income tax                           282

Division 90Medicare levy and Medicare levy surcharge                        282

Subdivision 90‑A—Treatment like income tax                                               282

90‑1....................... Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax........................................................................................ 282

Part 2‑35—Excess concessional contributions                                            283

Division 95—Excess concessional contributions charge                              283

Guide to Division 95                                                                                              283

95‑1....................... What this Division is about............................................. 283

Subdivision 95‑A—Object of Division                                                              283

95‑5....................... Object of Division.......................................................... 283

Subdivision 95‑B—Excess concessional contributions charge                   284

95‑10..................... Liability to excess concessional contributions charge..... 284

95‑15..................... Amount of excess concessional contributions charge..... 285

95‑20..................... When excess concessional contributions charge is due and payable        285

95‑25..................... General interest charge.................................................... 286

Division 96—Releasing money from superannuation                                  287

Subdivision 96‑A—Releasing money from superannuation                       287

Guide to Subdivision 96‑A                                                                                    287

96‑1....................... What this Subdivision is about....................................... 287

Requesting a release authority                                                                            288

96‑5....................... Electing to release money from superannuation.............. 288

Issuing a release authority to superannuation provider                              290

96‑10..................... Issuing a release authority to a superannuation provider. 290

96‑15..................... Varying and revoking a release authority........................ 290

Complying with a release authority                                                                  290

96‑20..................... Obligations of superannuation providers........................ 290

96‑25..................... Voluntary compliance with a release authority relating to voluntary release interests               291

96‑30..................... Meaning of maximum available release amount............ 291

96‑35..................... Notifying Commissioner................................................ 292

96‑40..................... Notifying individual of unsuccessful release attempt...... 292

96‑45..................... Compensation for acquisition of property....................... 293

Consequences of releasing amounts                                                                  293

96‑50..................... Entitlement to credits....................................................... 293

96‑55..................... Interest for late payments of money received by the Commissioner in accordance with release authority........................................................................................ 293

96‑60..................... Income tax treatment of amounts released—proportioning rule does not apply       294

Division 97—Excess concessional contributions determinations              295

Subdivision 97‑A—Excess concessional contributions determinations    295

Guide to Subdivision 97‑A                                                                                    295

97‑1....................... What this Subdivision is about....................................... 295

Operative provisions                                                                                             295

97‑5....................... Determination of excess concessional contributions and charge              295

97‑10..................... Review............................................................................ 296

Chapter 3—Collection, recovery and administration of other taxes  297

Part 3‑10—Indirect taxes                                                                                       297

Division 105—General rules for indirect taxes                                              297

Guide to Division 105                                                                                            297

105‑1..................... What this Division is about............................................. 297

Subdivision 105‑A—Assessments                                                                       298

105‑3..................... Application of Subdivision............................................. 298

105‑5..................... Commissioner may make assessment of indirect tax...... 298

105‑10................... Request for assessment................................................... 299

105‑15................... Indirect tax liabilities do not depend on assessment........ 299

105‑20................... Commissioner must give notice of the assessment......... 300

105‑25................... Amendment of assessment............................................. 300

105‑30................... Later assessment prevails in case of inconsistency......... 300

Subdivision 105‑B—Review of indirect tax decisions                                   300

105‑40................... Reviewable indirect tax decisions................................... 301

Subdivision 105‑C—Limits on credits, refunds and recovering amounts 301

105‑50................... Time limit on recovery by the Commissioner................. 301

105‑55................... Time limit on refunds etc. from the Commissioner......... 302

105‑65................... Restriction on GST refunds............................................ 305

Subdivision 105‑D—General interest charge and penalties                        306

105‑80................... General interest charge.................................................... 306

105‑85................... Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent........................................................................................ 307

Subdivision 105‑F—Indirect tax refund schemes                                          307

105‑120................. Refund scheme—defence related international obligations 307

105‑125................. Refund scheme—international obligations...................... 308

Subdivision 105‑G—Other administrative provisions                                 309

105‑140................. Address for service......................................................... 309

105‑145................. Commissioner must give things in writing..................... 310

Division 110—Goods and services tax                                                              311

Guide to Division 110                                                                                            311

110‑1..................... What this Division is about............................................. 311

Subdivision 110‑F—Review of GST decisions                                                311

110‑50................... Reviewable GST decisions............................................. 311

Division 111—Wine tax and luxury car tax                                                    315

Guide to Division 111                                                                                            315

111‑1..................... What this Division is about............................................. 315

Subdivision 111‑C—Review of wine tax decisions                                         315

111‑50................... Reviewable wine tax decisions....................................... 315

Subdivision 111‑D—Effect on contracts from amendments to laws         316

111‑60................... Alteration of contracts if cost of complying with agreement is affected by later alteration to wine tax or luxury car tax laws..................................................................... 316

Division 112—Fuel tax                                                                                         318

Guide to Division 112                                                                                            318

112‑1..................... What this Division is about............................................. 318

Subdivision 112‑E—Review of fuel tax decisions                                          318

112‑50................... Reviewable fuel tax decisions......................................... 318

Part 3‑15—Minerals Resource Rent Tax                                                      320

Division 115—Instalments                                                                                   320

Guide to Division 115                                                                                            320

115‑1..................... What this Division is about............................................. 320

Subdivision 115‑A—Preliminary                                                                       321

115‑5..................... Objects of this Division.................................................. 321

Subdivision 115‑B—Liability for instalments                                                321

115‑10................... Liability for instalments.................................................. 321

115‑15................... Information to be given to the Commissioner................. 322

115‑20................... Credit for instalments payable......................................... 323

115‑25................... When instalments are due............................................... 323

115‑30................... General interest charge on late payment.......................... 323

Subdivision 115‑C—Working out instalment amounts                                323

115‑35................... How to work out the amount of an instalment................ 324

115‑40................... Meaning of instalment income........................................ 324

115‑45................... Meaning of applicable instalment rate........................... 324

Subdivision 115‑D—Instalment rate chosen by you                                      326

Choosing an instalment rate                                                                                326

115‑50................... Choosing a varied instalment rate................................... 326

115‑55................... Notifying Commissioner of varied instalment rate.......... 327

Variation credits                                                                                                     327

115‑60................... Credit on using varied rate in certain cases..................... 327

General interest charge payable in certain cases if instalments are too low   329

115‑65................... Liability to GIC on shortfall in instalments worked out on the basis of varied rate  329

115‑70................... Working out your benchmark instalment rate................ 330

Subdivision 115‑E—Instalment rate given to you by Commissioner       331

115‑75................... Commissioner instalment rate for MRRT....................... 331

115‑80................... Commissioner may take changes, and proposed changes, to the law into account   332

Subdivision 115‑F—Default instalment rate                                                   333

115‑85................... Default instalment rate.................................................... 333

Subdivision 115‑G—Special rules for project interests that are transferred or split   334

115‑90................... Effect of transfer or split of project interest on instalment income            334

115‑95................... Additional instalment income for new miner or new explorer  336

115‑100................. Credit for original miner or original explorer for instalment quarters before transfer or split   336

115‑105................. Adjusted instalment income for original miners or explorers 338

Subdivision 115‑H—Special rules for transitional accounting periods   338

115‑110................. Instalment quarters in transitional accounting periods..... 339

Division 117—MRRT returns and starting base returns                             340

Guide to Division 117                                                                                            340

117‑1..................... What this Division is about............................................. 340

Operative provisions                                                                                             340

117‑5..................... Who must give MRRT returns....................................... 340

117‑10................... The form and contents of MRRT returns........................ 341

117‑15................... Additional MRRT returns............................................... 342

117‑20................... Starting base returns....................................................... 342

117‑25................... Electronic lodgement of MRRT returns and starting base returns            343

117‑30................... MRRT returns and starting base returns treated as being duly made        343

Division 119—Making choices                                                                           344

Guide to Division 119                                                                                            344

119‑1..................... What this Division is about............................................. 344

Operative provisions                                                                                             344

119‑5..................... Making choices............................................................... 344

119‑10................... Choices are irrevocable................................................... 345

119‑15................... Division subject to more specific rules........................... 345

Division 121—Reporting                                                                                      346

Guide to Division 121                                                                                            346

121‑1..................... What this Division is about............................................. 346

Operative provisions                                                                                             346

121‑5..................... Object of this Division.................................................... 346

121‑10................... Information notice for transfers and splits of mining and pre‑mining project interests             346

121‑12................... Notice of rehabilitation expenditure................................ 348

121‑15................... Substantiation requirement.............................................. 348

Division 123—Record keeping                                                                           350

Guide to Division 123                                                                                            350

123‑1..................... What this Division is about............................................. 350

Operative provisions                                                                                             350

123‑5..................... What records you must keep........................................... 350

123‑10................... Retaining records............................................................ 351

123‑15................... Offence for failing to keep or retain records................... 351

Division 125—Miscellaneous                                                                              353

125‑1..................... Address for service......................................................... 353

Part 3‑20—Sustaining the superannuation contribution concession 354

Division 133—Deferred payment                                                                      354

Guide to Division 133                                                                                            354

133‑1..................... What this Division is about............................................. 354

Subdivision 133‑A—Deferral determination                                                  354

Guide to Subdivision 133‑A                                                                                 354

133‑5..................... What this Subdivision is about....................................... 354

Operative provisions                                                                                             355

133‑10................... Determination of tax that is deferred to a debt account... 355

133‑15................... Defined benefit tax.......................................................... 355

133‑20................... How to attribute the defined benefit tax to defined benefit interests         356

133‑25................... Determination reducing tax deferred to a debt account.... 357

133‑30................... General provisions applying to determinations under this Subdivision    357

Subdivision 133‑B—Debt account                                                                      358

Guide to Subdivision 133‑B                                                                                 358

133‑55................... What this Subdivision is about....................................... 358

Operative provisions                                                                                             358

133‑60................... Debt account to be kept for deferred tax......................... 358

133‑65................... Interest on debt account balance...................................... 359

133‑70................... Voluntary payments........................................................ 360

133‑75................... Commissioner must notify superannuation provider of debt account       360

Subdivision 133‑C—Compulsory payment                                                     360

Guide to Subdivision 133‑C                                                                                 360

133‑100................. What this Subdivision is about....................................... 360

Debt account discharge liability                                                                         361

133‑105................. Liability to pay debt account discharge liability............... 361

133‑110................. When debt account discharge liability must be paid........ 361

133‑115................. General interest charge.................................................... 362

133‑120................. Meaning of debt account discharge liability................... 362

133‑125................. Notice of debt account discharge liability........................ 363

End benefit                                                                                                               364

133‑130................. Meaning of end benefit................................................... 364

133‑135................. End benefit notice—individual........................................ 364

133‑140................. End benefit notice—superannuation provider................. 364

133‑145................. End benefit notice—material changes or omissions........ 365

Division 135—Releasing money from superannuation                                366

Guide to Division 135                                                                                            366

135‑1..................... What this Division is about............................................. 366

Subdivision 135‑A—When the Commissioner must issue a release authority                366

Guide to Subdivision 135‑A                                                                                 366

135‑5..................... What this Subdivision is about....................................... 366

Operative provisions                                                                                             367

135‑10................... Release authorities.......................................................... 367

Subdivision 135‑B—When a release authority can be given to a superannuation provider       368

Guide to Subdivision 135‑B                                                                                 368

135‑35................... What this Subdivision is about....................................... 368

Operative provisions                                                                                             369

135‑40................... When you may give release authority to superannuation provider           369

135‑45................... When Commissioner may give release authority to superannuation provider          369

Subdivision 135‑C—Release of superannuation money under a release authority       370

Guide to Subdivision 135‑C                                                                                 370

135‑70................... What this Subdivision is about....................................... 370

Operative provisions                                                                                             371

135‑75................... Requirement for superannuation provider to release money 371

135‑80................... Compensation for acquisition of property....................... 372

135‑85................... Release amount............................................................... 372

135‑90................... How the Commissioner applies amounts received under a release authority            373

135‑95................... Defined benefit interests—releasing amounts to pay debt account discharge liability              373

135‑100................. Income tax treatment of amounts released—proportioning rule does not apply       373

Chapter 4—Generic assessment, collection and recovery rules             375

Part 4‑1—Returns and assessments                                                                  375

Division 155—Assessments                                                                                  375

Guide to Division 155                                                                                            375

155‑1..................... What this Division is about............................................. 375

Subdivision 155‑A—Making assessments                                                        375

155‑5..................... Commissioner may make assessment............................. 376

155‑10................... Commissioner must give notice of assessment............... 376

155‑15................... Self‑assessment.............................................................. 376

155‑20................... Assessment of indirect tax on importations and customs dealing             378

155‑25................... Special assessment.......................................................... 379

155‑30................... Delays in making assessments........................................ 379

Subdivision 155‑B—Amending assessments                                                    379

When Commissioner may amend assessments                                               380

155‑35................... Amendment during period of review.............................. 380

155‑40................... Amendment during period of review—certain applications taken to be notices       381

155‑45................... Amendment on application............................................. 382

155‑50................... Amendment to give effect to private ruling..................... 382

155‑55................... Amendment to give effect to certain anti‑avoidance declarations or determinations 382

155‑57................... Amendment to give effect to MRRT anti‑profit shifting rules  383

155‑60................... Amendment because of review, objection or fraud......... 383

Special rules about amending amended assessments                                    383

155‑65................... Amending amended assessments.................................... 383

155‑70................... Refreshed period of review............................................. 384

General rules                                                                                                           384

155‑75................... Refunds of amounts overpaid......................................... 384

155‑80................... Amended assessments are assessments.......................... 385

Subdivision 155‑C—Validity and review of assessments                             385

155‑85................... Validity of assessment.................................................... 385

155‑90................... Review of assessments................................................... 385

Subdivision 155‑D—Miscellaneous                                                                   386

155‑95................... Entities............................................................................ 386

Part 4‑15—Collection and recovery of tax‑related liabilities and other amounts           387

Division 250—Introduction                                                                                 387

Subdivision 250‑A—Guide to Part 4‑15                                                           387

250‑1..................... What this Part is about.................................................... 387

250‑5..................... Some important concepts about tax‑related liabilities...... 387

250‑10................... Summary of tax‑related liabilities.................................... 388

Subdivision 250‑B—Object of this Part                                                            395

250‑25................... Object............................................................................. 395

Division 255—General rules about collection and recovery                      396

Subdivision 255‑A—Tax‑related liabilities                                                     396

255‑1..................... Meaning of tax‑related liability....................................... 396

255‑5..................... Recovering a tax‑related liability that is due and payable 396

Subdivision 255‑B—Commissioner’s power to vary payment time          397

255‑10................... To defer the payment time............................................... 397

255‑15................... To permit payments by instalments................................. 398

255‑20................... To bring forward the payment time in certain cases........ 398

Subdivision 255‑C—Recovery proceedings                                                    399

Guide to Subdivision 255‑C                                                                                 399

255‑35................... What this Subdivision is about....................................... 399

Operative provisions                                                                                             399

255‑40................... Service of documents if person absent from Australia or cannot be found              399

255‑45................... Evidentiary certificate...................................................... 400

255‑50................... Certain statements or averments...................................... 401

255‑55................... Evidence by affidavit...................................................... 401

Subdivision 255‑D—Security deposits                                                              402

255‑100................. Commissioner may require security deposit................... 402

255‑105................. Notice of requirement to give security............................ 403

255‑110................. Offence........................................................................... 403

Division 260—Special rules about collection and recovery                        405

Guide to Division 260                                                                                            405

260‑1..................... What this Division is about............................................. 405

Subdivision 260‑A—From third party                                                              405

260‑5..................... Commissioner may collect amounts from third party...... 405

260‑10................... Notice to Commonwealth, State or Territory.................. 407

260‑15................... Indemnity........................................................................ 407

260‑20................... Offence........................................................................... 408

Subdivision 260‑B—From liquidator                                                               408

260‑40................... Subdivision does not apply to superannuation guarantee charge              408

260‑45................... Liquidator’s obligation.................................................... 408

260‑50................... Offence........................................................................... 410

260‑55................... Joint liability of 2 or more liquidators............................. 410

260‑60................... Liquidator’s other obligation or liability.......................... 410

Subdivision 260‑C—From receiver                                                                   410

260‑75................... Receiver’s obligation...................................................... 410

260‑80................... Offence........................................................................... 412

260‑85................... Joint liability of 2 or more receivers................................ 412

260‑90................... Receiver’s other obligation or liability............................ 412

Subdivision 260‑D—From agent winding up business for foreign resident principal  412

260‑105................. Obligation of agent winding up business for foreign resident principal   412

260‑110................. Offence........................................................................... 413

260‑115................. Joint liability of 2 or more agents.................................... 414

260‑120................. Agent’s other obligation or liability................................ 414

Subdivision 260‑E—From deceased person’s estate                                     414

260‑140................. Administered estate......................................................... 414

260‑145................. Unadministered estate..................................................... 415

260‑150................. Commissioner may authorise amount to be recovered.... 416

Division 263—Mutual assistance in collection of foreign tax debts          417

Subdivision 263‑A—Foreign revenue claims                                                  417

Guide to Subdivision 263‑A                                                                                 417

263‑5..................... What this Subdivision is about....................................... 417

Operative provisions                                                                                             418

263‑10................... Meaning of foreign revenue claim.................................. 418

263‑15................... Requirements for foreign revenue claims........................ 418

263‑20................... Foreign Revenue Claims Register................................... 418

263‑25................... Registering claims........................................................... 419

263‑30................... When amount is due and payable.................................... 419

263‑35................... Amending the Register etc.............................................. 420

263‑40................... Payment to competent authority...................................... 421

Division 265—Other matters                                                                              422

Subdivision 265‑A—Right of person to seek recovery or contribution    422

Guide to Subdivision 265‑A                                                                                 422

265‑35................... What this Subdivision is about....................................... 422

Operative provisions                                                                                             422

265‑40................... Right of recovery if another person is liable................... 422

265‑45................... Right of contribution if persons are jointly liable............ 423

Subdivision 265‑B—Application of laws                                                          423

265‑65................... Non‑application of certain taxation laws......................... 423

Division 268—Estimates and recovery of PAYG withholding liabilities and superannuation guarantee charge                                                                                                       424

Guide to Division 268                                                                                            424

268‑1..................... What this Division is about............................................. 424

Subdivision 268‑A—Object                                                                                  425

268‑5..................... Object of Division.......................................................... 425

Subdivision 268‑B—Making estimates                                                             425

268‑10................... Commissioner may make estimate.................................. 425

268‑15................... Notice of estimate........................................................... 426

Subdivision 268‑C—Liability to pay estimates                                              427

268‑20................... Nature of liability to pay estimate.................................... 427

268‑25................... Accuracy of estimate irrelevant to liability to pay............ 428

268‑30................... Estimate provable in bankruptcy or winding up.............. 429

Subdivision 268‑D—Reducing and revoking estimates                                429

268‑35................... How estimate may be reduced or revoked—Commissioner’s powers     430

268‑40................... How estimate may be reduced or revoked—statutory declaration or affidavit          431

268‑45................... How estimate may be reduced or revoked—rejection of proof of debt    433

268‑50................... How estimate may be reduced—amount paid or applied 434

268‑55................... When reduction or revocation takes effect...................... 435

268‑60................... Consequences of reduction or revocation—refund......... 435

268‑65................... Consequences of reduction or revocation—statutory demand changed or set aside 436

268‑70................... Consequences of reduction or revocation—underlying liability               436

Subdivision 268‑E—Late payment of estimates                                             437

268‑75................... Liability to pay the general interest charge...................... 437

268‑80................... Effect of paying the general interest charge..................... 437

Subdivision 268‑F—Miscellaneous                                                                    438

268‑85................... Effect of judgment on liability on which it is based........ 438

268‑90................... Requirements for statutory declaration or affidavit......... 439

268‑95................... Liquidators, receivers and trustees in bankruptcy........... 442

268‑100................. Division not to limit or exclude Corporations or Bankruptcy Act            443

Division 269—Penalties for directors of non‑complying companies       444

Guide to Division 269                                                                                            444

269‑1..................... What this Division is about............................................. 444

Subdivision 269‑A—Object and scope                                                              444

269‑5..................... Object of Division.......................................................... 445

269‑10................... Scope of Division........................................................... 445

Subdivision 269‑B—Obligations and penalties                                              446

269‑15................... Directors’ obligations..................................................... 447

269‑20................... Penalty............................................................................ 447

269‑25................... Notice............................................................................. 448

269‑30................... Effect on penalty of directors’ obligation ending before end of notice period          449

269‑35................... Defences......................................................................... 452

Subdivision 269‑C—Discharging liabilities                                                    454

269‑40................... Effect of director paying penalty or company discharging liability           454

269‑45................... Directors’ rights of indemnity and contribution.............. 455

Subdivision 269‑D—Miscellaneous                                                                   455

269‑50................... How notice may be given............................................... 455

269‑52................... Copies of notices............................................................ 455

269‑55................... Division not to limit or exclude Corporations Act.......... 456

Part 4‑25—Charges and penalties                                                                     457

Division 280—Shortfall interest charge                                                           457

Guide to Division 280                                                                                            457

280‑1..................... Guide to Division 280.................................................... 457

Subdivision 280‑A—Object of Division                                                            457

280‑50................... Object of Division.......................................................... 457

Subdivision 280‑B—Shortfall interest charge                                                458

280‑100................. Liability to shortfall interest charge—income tax............ 458

280‑101................. Liability to shortfall interest charge—minerals resource rent tax              459

280‑102................. Liability to shortfall interest charge—petroleum resource rent tax            460

280‑102A.............. Liability to shortfall interest charge—excess non‑concessional contributions tax    460

280‑102B.............. Liability to shortfall interest charge—Division 293 tax... 461

280‑103................. Liability to shortfall interest charge—general.................. 462

280‑105................. Amount of shortfall interest charge................................. 462

280‑110................. Notification by Commissioner........................................ 462

Subdivision 280‑C—Remitting shortfall interest charge                             463

280‑160................. Remitting shortfall interest charge................................... 463

280‑165................. Commissioner must give reasons for not remitting in certain cases         463

280‑170................. Objecting against remission decision.............................. 464

Division 284—Administrative penalties for statements, unarguable positions and schemes      465

Guide to Division 284                                                                                            465

284‑5..................... What this Division is about............................................. 465

Subdivision 284‑A—General provisions                                                          465

284‑10................... Object of Division.......................................................... 466

284‑15................... When a matter is reasonably arguable........................... 466

284‑20................... Which statements this Division applies to....................... 466

284‑25................... Statements by agents....................................................... 467

284‑30................... Application of Division to trusts..................................... 467

284‑35................... Application of Division to partnerships.......................... 467

Subdivision 284‑B—Penalties relating to statements                                    468

Guide to Subdivision 284‑B                                                                                 468

284‑70................... What this Subdivision is about....................................... 468

Operative provisions                                                                                             469

284‑75................... Liability to penalty.......................................................... 469

284‑80................... Shortfall amounts........................................................... 471

284‑85................... Amount of penalty.......................................................... 473

284‑90................... Base penalty amount....................................................... 473

284‑95................... Joint and several liability of directors of corporate trustee that makes a false or misleading statement     476

Subdivision 284‑C—Penalties relating to schemes                                        476

Guide to Subdivision 284‑C                                                                                 476

284‑140................. What this Subdivision is about....................................... 476

Operative provisions                                                                                             477

284‑145................. Liability to penalty.......................................................... 477

284‑150................. Scheme benefits and scheme shortfall amounts.............. 478

284‑155................. Amount of penalty.......................................................... 480

284‑160................. Base penalty amount: schemes....................................... 480

284‑165................. Exception—threshold for penalty arising from cross‑border transfer pricing          481

Subdivision 284‑D—Provisions common to Subdivisions 284‑B and 284‑C 482

284‑220................. Increase in base penalty amount...................................... 482

284‑224................. Reduction of base penalty amount if law was applied in an accepted way               484

284‑225................. Reduction of base penalty amount if you voluntarily tell the Commissioner            484

Subdivision 284‑E—Special rules about unarguable positions for cross‑border transfer pricing           485

284‑250................. Undocumented transfer pricing treatment not reasonably arguable          486

284‑255................. Documentation requirements.......................................... 486

Division 286—Penalties for failing to lodge documents on time               488

Subdivision 286‑A—Guide to Division 286                                                     488

286‑1..................... What this Division is about............................................. 488

Subdivision 286‑B—Object of Division                                                            488

286‑25................... Object of Division.......................................................... 488

Subdivision 286‑C—Penalties for failing to lodge documents on time    488

286‑75................... Liability to penalty.......................................................... 489

286‑80................... Amount of penalty.......................................................... 491

Division 288—Miscellaneous administrative penalties                                493

288‑10................... Penalty for non‑electronic notification............................ 493

288‑20................... Penalty for non‑electronic payment................................. 494

288‑25................... Penalty for failure to keep or retain records.................... 494

288‑30................... Penalty for failure to retain or produce declarations........ 494

288‑35................... Penalty for preventing access etc.................................... 495

288‑40................... Penalty for failing to register or cancel registration......... 495

288‑45................... Penalty for failing to issue tax invoice etc....................... 495

288‑50................... Penalty for both principal and agent issuing certain documents               496

288‑70................... Administrative penalties for life insurance companies.... 496

288‑75................... Administrative penalty for a copyright or resale royalty collecting society               498

288‑80................... Administrative penalty for over declaring conduit foreign income           498

288‑90................... Failing to give release authority for excess non‑concessional contributions tax       499

288‑95................... Failing to comply etc. with release authority................... 500

288‑100................. Excess money paid under release authority..................... 500

288‑105................. Superannuation provider to calculate crystallised pre‑July 83 amount of superannuation interest by 30 June 2008................................................................................ 501

288‑110................. Contravention of superannuation data and payment regulation or standard              501

Division 290—Promotion and implementation of schemes                        503

Subdivision 290‑A—Preliminary                                                                       503

290‑5..................... Objects of this Division.................................................. 503

290‑10................... Extra‑territorial application.............................................. 503

Subdivision 290‑B—Civil penalties                                                                   503

290‑50................... Civil penalties................................................................. 504

290‑55................... Exceptions...................................................................... 506

290‑60................... Meaning of promoter..................................................... 507

290‑65................... Meaning of tax exploitation scheme................................ 508

Subdivision 290‑C—Injunctions                                                                         509

290‑120................. Conduct to which this Subdivision applies..................... 509

290‑125................. Injunctions...................................................................... 509

290‑130................. Interim injunctions.......................................................... 509

290‑135................. Delay in making ruling................................................... 510

290‑140................. Discharge etc. of injunctions........................................... 510

290‑145................. Certain limits on granting injunctions not to apply.......... 510

290‑150................. Other powers of the Federal Court unaffected................ 511

Subdivision 290‑D—Voluntary undertakings                                                 511

290‑200................. Voluntary undertakings.................................................. 511

Division 298—Machinery provisions for penalties                                       513

Subdivision 298‑A—Administrative penalties                                                513

298‑5..................... Scope of Subdivision...................................................... 513

298‑10................... Notification of liability.................................................... 513

298‑15................... Due date for penalty........................................................ 513

298‑20................... Remission of penalty...................................................... 514

298‑25................... General interest charge on unpaid penalty....................... 514

298‑30................... Assessment of penalties under Division 284.................. 515

Subdivision 298‑B—Civil penalties                                                                   515

298‑80................... Application of Subdivision............................................. 515

298‑85................... Civil evidence and procedure rules for civil penalty orders 516

298‑90................... Civil proceedings after criminal proceedings.................. 516

298‑95................... Criminal proceedings during civil proceedings............... 516

298‑100................. Criminal proceedings after civil proceedings.................. 516

298‑105................. Evidence given in proceedings for penalty not admissible in criminal proceedings  517

298‑110................. Civil double jeopardy...................................................... 517

Part 4‑50—Release from particular liabilities                                            518

Division 340Commissioner’s power in cases of hardship                        518

Guide to Division 340                                                                                            518

340‑1..................... What this Division is about............................................. 518

Operative provisions                                                                                             518

340‑5..................... Release from particular liabilities in cases of serious hardship 518

340‑10................... Liabilities to which this section applies........................... 519

340‑15................... Commissioner may take action to give effect to a release decision           521

340‑20................... Extinguishing your liability to pay a fringe benefits tax instalment if you are released             521

340‑25................... Extinguishing your liability to pay a PAYG instalment if you are released              522

Division 342Commissioner’s power relating to proceeds of crime proceedings       523

Guide to Division 342                                                                                            523

342‑1..................... What this Division is about............................................. 523

Subdivision 342‑A—Power to waive right to payment of tax‑related liabilities            523

342‑5..................... Object of this Subdivision.............................................. 523

342‑10................... Power to waive right to payment of tax‑related liability.. 524

Part 4‑90—Evidence                                                                                                 525

Division 350—Evidence                                                                                       525

Guide to Division 350                                                                                            525

350‑1..................... What this Division is about............................................. 525

Subdivision 350‑A—Evidence                                                                             525

350‑5..................... Application of Subdivision............................................. 525

350‑10................... Evidence......................................................................... 525

350‑15................... Judicial notice of signature.............................................. 527

Chapter 5—Administration                                                                                         529

Part 5‑1—The Australian Taxation Office                                                   529

Division 352—Accountability of the Commissioner                                     529

Guide to Division 352                                                                                            529

352‑1..................... What this Division is about............................................. 529

Subdivision 352‑A—Accountability of the Commissioner in respect of indirect tax laws           529

352‑5..................... Commissioner must prepare annual report on indirect tax laws               529

Subdivision 352‑B—Accountability of the Commissioner in respect of MRRT law     530

352‑10................... Commissioner must prepare annual report on MRRT law 530

Division 353—Powers to obtain information and evidence                        531

353‑10................... Commissioner’s power................................................... 531

353‑15................... Access to premises for the purposes of the indirect tax laws, the MRRT law and the Division 293 tax law........................................................................................ 532

353‑17................... Offshore information notices.......................................... 533

353‑20................... Checking status of specifically listed deductible gift recipients                533

Division 355—Confidentiality of taxpayer information                             535

Guide to Division 355                                                                                            535

355‑1..................... What this Division is about............................................. 535

Subdivision 355‑A—Objects and application of Division                            535

355‑10................... Objects of Division......................................................... 536

355‑15................... Application of Division.................................................. 536

Subdivision 355‑B—Disclosure of protected information by taxation officers             537

Guide to Subdivision 355‑B                                                                                 537

355‑20................... What this Subdivision is about....................................... 537

Operative provisions                                                                                             537

355‑25................... Offence—disclosure of protected information by taxation officers          537

355‑30................... Meaning of protected information and taxation officer... 538

355‑35................... Consent is not a defence................................................. 539

355‑40................... Generality of Subdivision not limited............................. 539

355‑45................... Exception—disclosure of publicly available information 539

355‑47................... Exception—disclosure of periodic aggregate tax information  540

355‑50................... Exception—disclosure in performing duties................... 540

355‑55................... Exception—disclosure to Ministers................................ 542

355‑60................... Limits on disclosure to Ministers.................................... 543

355‑65................... Exception—disclosure for other government purposes.. 544

355‑70................... Exception—disclosure for law enforcement and related purposes           556

355‑75................... Limits on disclosure to courts and tribunals.................... 561

Subdivision 355‑C—On‑disclosure of protected information by other people               562

Guide to Subdivision 355‑C                                                                                 562

355‑150................. What this Subdivision is about....................................... 562

Operative provisions                                                                                             562

355‑155................. Offence—on‑disclosure of protected information by other people           562

355‑160................. Consent is not a defence................................................. 563

355‑165................. Generality of Subdivision not limited............................. 563

355‑170................. Exception—on‑disclosure of publicly available information 563

355‑172................. Exception—disclosure of periodic aggregate tax information  564

355‑175................. Exception—on‑disclosure for original purpose.............. 564

355‑180................. Exception—on‑disclosure to Ministers in relation to statutory powers or functions                565

355‑185................. Exception—on‑disclosure in relation to IGIS................. 565

355‑190................. Exception—on‑disclosure in relation to ASIO............... 566

355‑195................. Exception—on‑disclosure by Royal Commissions......... 567

355‑200................. Exception—records made in compliance with Australian laws                567

355‑205................. Limits on on‑disclosure to courts or tribunals................. 568

355‑210................. Limits on on‑disclosure to Ministers.............................. 568

Subdivision 355‑D—Disclosure of protected information that has been unlawfully acquired   569

Guide to Subdivision 355‑D                                                                                 569

355‑260................. What this Subdivision is about....................................... 569

Operative provisions                                                                                             569

355‑265................. Offence—disclosure of protected information acquired in breach of a taxation law 569

355‑270................. Exception—disclosure of publicly available information 570

355‑275................. Exception—disclosure in relation to a taxation law......... 570

355‑280................. Limits on disclosure to courts and tribunals.................... 570

Subdivision 355‑E—Other matters                                                                    571

Guide to Subdivision 355‑E                                                                                 571

355‑320................. What this Subdivision is about....................................... 571

Operative provisions                                                                                             571

355‑325................. Oath or affirmation to protect information...................... 571

355‑330................. Injunctions to prevent contravention of non‑disclosure provisions          572

355‑335................. Procedures for disclosing protected information............. 573

Division 356—General administration of tax laws                                       575

Guide to Division 356                                                                                            575

356‑1..................... What this Division is about............................................. 575

Subdivision 356‑A—Indirect tax laws                                                               575

356‑5..................... Commissioner has general administration of indirect tax laws 575

Part 5‑5—Rulings                                                                                                       576

Division 357—Object and common rules                                                         576

Guide to Division 357                                                                                            576

357‑1..................... What this Division is about............................................. 576

Subdivision 357‑A—Object of this Part                                                            576

357‑5..................... Object of this Part........................................................... 576

Subdivision 357‑B—Common rules for rulings                                             577

Rules for all rulings                                                                                               578

357‑50................... Scope of Division........................................................... 578

357‑55................... The provisions that are relevant for rulings..................... 578

357‑60................... When rulings are binding on the Commissioner............. 579

357‑65................... Stopping relying on a ruling........................................... 581

357‑70................... Commissioner may apply the law if more favourable than the ruling       582

357‑75................... Inconsistent rulings......................................................... 582

357‑80................... Contracts for schemes..................................................... 584

357‑85................... Effect on ruling if relevant provision re‑enacted............. 584

357‑90................... Validity of ruling not affected by formal defect.............. 584

Common rules for public and private rulings                                                584

357‑95................... Electronic communications............................................. 584

357‑100................. Evidence......................................................................... 584

Common rules for private and oral rulings                                                    585

357‑105................. Further information must be sought................................ 585

357‑110................. Assumptions in making private or oral ruling................. 585

357‑115................. Additional information provided by applicant................. 586

357‑120................. Commissioner may take into account information from third parties       586

357‑125................. Applications and objections not to affect obligations and powers            586

Division 358—Public rulings                                                                              587

Guide to Division 358                                                                                            587

358‑1..................... What this Division is about............................................. 587

Making public rulings                                                                                           587

358‑5..................... What is a public ruling?.................................................. 587

358‑10................... Application of public rulings.......................................... 588

358‑15................... When a public ruling ceases to apply.............................. 588

Withdrawing public rulings                                                                                 588

358‑20................... Withdrawing public rulings............................................ 588

Division 359—Private rulings                                                                            590

Guide to Division 359                                                                                            590

359‑1..................... What this Division is about............................................. 590

Private rulings                                                                                                        591

359‑5..................... Private rulings................................................................. 591

359‑10................... Applying for a private ruling.......................................... 591

359‑15................... Private rulings to be given to applicants.......................... 591

359‑20................... Private rulings must contain certain details..................... 591

359‑25................... Time of application of private rulings............................. 592

359‑30................... Ruling for trustee of a trust............................................. 592

359‑35................... Dealing with applications................................................ 592

359‑40................... Valuations....................................................................... 593

359‑45................... Related rulings................................................................ 594

359‑50................... Delays in making private rulings.................................... 594

359‑55................... Revised private rulings................................................... 595

359‑60................... Objections, reviews and appeals relating to private rulings 596

359‑65................... Commissioner may consider new information on objection 597

359‑70................... Successful objection decision alters ruling...................... 597

Division 360—Oral rulings                                                                                 598

Guide to Division 360                                                                                            598

360‑1..................... What this Division is about............................................. 598

Oral rulings                                                                                                             598

360‑5..................... Applying for and making of oral rulings........................ 598

360‑10................... Withdrawing an application for an oral ruling................. 599

360‑15................... Commissioner determinations......................................... 600

Division 361—Non‑ruling advice and general administrative practice  601

361‑5..................... Non‑ruling advice and general administrative practice.... 601

Part 5‑25—Record‑keeping and other obligations of taxpayers      602

Division 382—Record‑keeping                                                                           602

Guide to Division 382                                                                                            602

382‑1..................... What this Division is about............................................. 602

Subdivision 382‑A—Keeping records of indirect tax transactions           602

382‑5..................... Keeping records of indirect tax transactions.................... 602

Subdivision 382‑B—Record keeping obligations of deductible gift recipients               606

382‑15................... Deductible gift recipients to keep records....................... 606

Division 388—Requirements about giving material to the Commissioner 608

Subdivision 388‑A—Object of Division                                                            608

388‑5..................... Object of Division.......................................................... 608

Subdivision 388‑B—General provisions                                                          608

388‑50................... Approved forms............................................................. 608

388‑52................... Saturdays, Sundays and public holidays......................... 609

388‑55................... Commissioner may defer time for lodgment................... 609

388‑60................... Declaration by entity....................................................... 610

388‑65................... Declaration by entity where agent gives document......... 610

388‑70................... Declaration by agent....................................................... 610

388‑75................... Signing declarations........................................................ 611

388‑80................... Electronic notification of BAS amounts.......................... 612

388‑85................... Truncating amounts........................................................ 612

Division 390Superannuation reporting                                                        613

Guide to Division 390                                                                                            613

390‑1..................... What this Division is about............................................. 613

Subdivision 390‑A—Member information statements and roll‑over superannuation benefit statements               613

390‑5..................... Member information statements...................................... 613

390‑10................... Statements about roll‑over superannuation benefits etc... 615

390‑12................... Statements about benefits paid to KiwiSaver schemes.... 617

390‑15................... Superannuation statements to members.......................... 619

Subdivision 390‑BStatements relating to release authorities                 619

390‑65................... Statements relating to release authorities......................... 619

Subdivision 390‑COther statements                                                              621

390‑115................. Change or omission in information given to the Commissioner               621

Division 391—First home saver account reporting                                      622

Guide to Division 391                                                                                            622

391‑1..................... What this Division is about............................................. 622

Subdivision 391‑A—Account activity statements                                           622

391‑5..................... FHSA account activity statements.................................. 622

Subdivision 391‑B—Transfer statements                                                        624

391‑10................... Statements about transfer payments between FHSAs etc. 624

Division 392—Employee share scheme reporting                                         626

Guide to Division 392                                                                                            626

392‑1..................... What this Division is about............................................. 626

Subdivision 392‑A—Statements                                                                          626

392‑5..................... Statements by providers.................................................. 626

392‑10................... Change or omission in information given to the Commissioner               629

Subdivision 392‑B—Miscellaneous                                                                   630

392‑15................... Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997  630

Division 394Reporting about forestry managed investment schemes  631

Guide to Division 394                                                                                            631

394‑1..................... What this Division is about............................................. 631

394‑5..................... Statements about initial contributions to scheme............. 631

394‑10................... Statements about failure to establish trees within 18 months 632

Division 398—Miscellaneous reporting obligations                                     634

Guide to Division 398                                                                                            634

398‑1..................... What this Division is about............................................. 634

Subdivision 398‑A—Farm Management Deposit reporting                        634

398‑5..................... Reporting to Agriculture Department.............................. 634

Part 5‑30—Payment, ABN and identification verification system   636

Division 400—Guide to Part 5‑30                                                                      636

400‑1..................... What Part 5‑30 is about.................................................. 636

400‑5..................... The payment, ABN and identification verification system 636

Division 405—Transaction reporting by purchasers                                   637

405‑5..................... Payments to which this Division applies........................ 637

405‑10................... Reporting requirements................................................... 637

405‑15................... Invoices produced by purchasers.................................... 638

Division 410—Transaction reporting by suppliers                                       639

410‑5..................... Payments to which this Division applies........................ 639

410‑10................... Reporting requirements................................................... 639

410‑15................... Invoices produced by purchasers.................................... 640

Division 415—Verification of suppliers’ ABNs by purchasers                  641

415‑5..................... Payments to which this Division applies........................ 641

415‑10................... ABN verification requirements....................................... 641

415‑15................... Method of obtaining ABN verification........................... 642

415‑20................... Verification applies to later payments............................. 642

Division 417—Verification of suppliers’ identities by purchasers            643

417‑5..................... Payments to which this Division applies........................ 643

417‑10................... Identity verification requirements.................................... 643

417‑15................... Method of obtaining identity verification........................ 643

417‑20................... Verification applies to later payments............................. 644

Division 420—Penalties for not reporting or verifying                               645

420‑5..................... Failing to report or verify: administrative penalty........... 645

Division 425—Other matters                                                                              646

425‑20................... Constructive payment..................................................... 646

425‑25................... Non‑cash benefits........................................................... 646

Part 5‑35—Registration and similar processes for various taxes    647

Division 426—Process of endorsing charities and other entities               647

Guide to Division 426                                                                                            647

426‑1..................... What this Division is about............................................. 647

Subdivision 426‑A—Application of Subdivision 426‑B to various kinds of endorsement           647

426‑5..................... Application of Subdivision 426‑B to various kinds of endorsement        648

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................................... 648

Subdivision 426‑B—Process of endorsement etc.                                          649

426‑15................... Applying for endorsement.............................................. 649

426‑20................... Dealing with an application for endorsement.................. 650

426‑25................... Notifying outcome of application for endorsement......... 651

426‑30................... Date of effect of endorsement......................................... 651

426‑35................... Review of refusal of endorsement.................................. 651

426‑40................... Checking entitlement to endorsement.............................. 651

426‑45................... Telling Commissioner of loss of entitlement to endorsement 652

426‑50................... Partnerships and unincorporated bodies......................... 653

426‑55................... Revoking endorsement................................................... 653

426‑60................... Review of revocation of endorsement............................. 654

Subdivision 426‑C—Entries on Australian Business Register                    654

426‑65................... Entries on Australian Business Register......................... 655

Subdivision 426‑D—Public and private ancillary funds                              656

Guide to Subdivision 426‑D                                                                                 656

426‑100................. What this Subdivision is about....................................... 656

Public ancillary funds                                                                                           657

426‑102................. Public ancillary funds..................................................... 657

426‑103................. Public ancillary fund guidelines...................................... 658

426‑104................. Australian Business Register must show public ancillary fund status      658

Private ancillary funds                                                                                         659

426‑105................. Private ancillary funds.................................................... 659

426‑110................. Private ancillary fund guidelines..................................... 659

426‑115................. Australian Business Register must show private ancillary fund status     660

Administrative penalties                                                                                       660

426‑120................. Administrative penalties for trustees of ancillary funds.. 660

Suspension and removal of trustees                                                                   662

426‑125................. Suspension or removal of trustees.................................. 662

426‑130................. Commissioner to appoint acting trustee in cases of suspension or removal             663

426‑135................. Terms and conditions of appointment of acting trustee... 664

426‑140................. Termination of appointment of acting trustee.................. 664

426‑145................. Resignation of acting trustee........................................... 664

426‑150................. Property vesting orders................................................... 665

426‑155................. Powers of acting trustee.................................................. 665

426‑160................. Commissioner may give directions to acting trustee....... 665

426‑165................. Property vested in acting trustee—former trustees’ obligations relating to books, identification of property and transfer of property......................................................... 666

Transfers between ancillary funds                                                                    667

426‑170................. Ancillary funds must not provide funds to other ancillary funds             667

Part 5‑45—Application of taxation laws to certain entities                 668

Division 444—Obligations of entities on behalf of other entities              668

Guide to Division 444                                                                                            668

444‑1..................... What this Division is about............................................. 668

Subdivision 444‑A—Unincorporated associations and bodies and companies               668

444‑5..................... Unincorporated associations and bodies......................... 668

444‑10................... Public officers of companies........................................... 669

444‑15................... Notifying and serving companies................................... 670

Subdivision 444‑B—Partnerships                                                                      670

444‑30................... Partnerships.................................................................... 671

Subdivision 444‑C—Superannuation funds                                                     671

444‑50................... Superannuation funds..................................................... 671

Subdivision 444‑D—Incapacitated entities                                                      672

444‑70................... Representatives of incapacitated entities.......................... 672

Subdivision 444‑E—Indirect tax specific entities                                          673

444‑80................... GST joint ventures.......................................................... 673

444‑85................... Non‑profit sub‑entities.................................................... 675

444‑90................... GST groups.................................................................... 676

Subdivision 444‑F—Trusts                                                                                  679

444‑120................. Trusts.............................................................................. 679

Division 446—Local governing bodies                                                            683

Guide to Division                                                                                                    683

446‑1..................... What this Division is about............................................. 683

Operative provisions                                                                                             683

446‑5..................... Requirements for unanimous resolutions by local governing bodies       683

Part 5‑100—Miscellaneous                                                                                    687

Division 850—Transactions exempt from application of taxation laws 687

Subdivision 850‑A—Declaration relating to security or intelligence agency 687

850‑100................. Declaration relating to security or intelligence agency..... 687

 


Schedule 1Collection and recovery of income tax and other liabilities

Note:       See section 3AA.

Chapter 2Collection, recovery and administration of income tax

Part 2‑1Introduction to the Pay as you go (PAYG) system

Division 6Guide 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) 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 2‑5Pay as you go (PAYG) withholding

Division 10Guide 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 11Preliminary 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

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

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

                     (d)  *withholding tax; and

                     (e)  *mining withholding tax; and

                      (f)  *TFN withholding tax; and

                     (g)  *MRRT; and

                     (h)  *petroleum resource rent tax.

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 12Payments 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‑AGeneral 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 any of the following:

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

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

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‑BPayments 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‑CPayments 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‑DBenefit 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‑EPayments 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:

                     (a)  ignore the external Territories; and

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

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

Subdivision 12‑FDividend, 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‑FADeparting 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‑FAAExcess 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‑FBPayments 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‑FCSeasonal 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‑GPayments 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,*MRRT or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made;

or the payment is covered by a certificate in force under section 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,*MRRT or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made; and

                     (b)  such other conditions as the certificate specifies.

However, the entity does not contravene subsection 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‑HDistributions of managed investment trust income

Guide to Subdivision 12H

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 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 13Alienated 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 14Non‑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‑ANon‑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‑BAccruing 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‑CShares 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 section 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 15Working 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‑AWorking 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 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‑BWithholding 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), (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;

                   (da)  the percentages specified in section 1061ZZFD (about repayments of accumulated FS debts) of the Social Security Act 1991 for any financial year starting on or after 1 July 2006;

                   (db)  the percentages specified in section 12ZLC (about repayments of accumulated FS debts) of the Student Assistance Act 1973 for any financial year starting on or after 1 July 2006;

                     (d)  any prescribed *tax offsets;

                     (e)  the family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999);

                      (f)  the periods in respect of which *withholding payments are made;

                     (g)  any other prescribed matter.

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‑CDeclarations

Table of sections

15‑50        Declarations

15‑50  Declarations

Declarations about prescribed 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 prescribed matter relating to the individual’s income tax or other liability referred to in paragraph 11‑1(b), (ca), (da) or (db) taken into account by the entity in working out the *amount required to be withheld from the payment;

may give the entity a declaration about the matter in the *approved form.

When declarations under subsection (1) can’t be given

             (2)  The individual cannot give a declaration under subsection (1) unless:

                     (a)  a *TFN declaration is in effect between the individual and the entity, or a *voluntary agreement covers the payment; and

                     (b)  if the individual has given another entity a declaration on a prescribed matter—that declaration is not in effect.

Declarations changing information given in TFN declaration

             (3)  If:

                     (a)  an individual has given a *TFN declaration to an entity; and

                     (b)  the individual made a statement about a prescribed matter in the TFN declaration; and

                     (c)  the individual’s circumstances change in relation to the matter;

the individual may give the entity a declaration about the matter in the *approved form.

Regulations

             (4)  The regulations may prescribe:

                     (a)  the matters about which a declaration under subsection (1) or (3) may be given; and

                     (b)  when a declaration under subsection (1) or (3) starts or ceases to be in effect; and

                     (c)  when a declaration under subsection (1) or (3) is taken to have been given.

             (5)  If:

                     (a)  an individual gives an entity a declaration under subsection (1) or (3) about a matter; and

                     (b)  the individual’s circumstances change in relation to the matter;

the regulations may also prescribe when the individual must give the entity a new declaration about the matter.

Division 16Payer’s obligations and rights

Table of Subdivisions

             Guide to Division 16

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‑ATo 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‑BTo 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‑BATo 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‑CTo 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‑DAdditional 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 18Recipient’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‑ACrediting withheld amounts

Guide to Subdivision 18A

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: Minerals resource rent tax

18‑49        Credit—Natural resource payments

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 1:       Section 18‑49 provides a credit for amounts withheld in respect of MRRT.

Note 2:       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.

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: Minerals resource rent tax

18‑49  Credit—Natural resource payments

             (1)  An entity is entitled to a credit in an *MRRT year if:

                     (a)  one or more *withholding payments covered by section 12‑325 (natural resource payments) from which there are *amounts withheld in respect of *MRRT are made to the entity during the MRRT year; and

                     (b)  an assessment has been made of the MRRT payable, or an assessment has been made that no MRRT is payable, by the entity for the MRRT year.

             (2)  The amount of the credit is so much of the total of the *amounts withheld as is withheld in respect of *MRRT.

Entitlement to credit: Petroleum resource rent tax

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‑BRefund 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‑CRecipient’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‑DDirectors 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)