Contents
Part I—Preliminary 1
1............................ Short title............................................................................ 1
2............................ Interpretation....................................................................... 1
2A......................... Application of the Criminal Code....................................... 3
2B.......................... Act binds the Crown........................................................... 4
3............................ Application......................................................................... 4
3AA...................... Schedule 1.......................................................................... 4
Part IA—Administration 5
3A......................... General administration of Act............................................. 5
3B.......................... Annual report...................................................................... 5
3C.......................... Reporting of information about corporate tax entity with reported total income of $100 million or more............................................................................................ 6
3CA....................... Reporting of information by corporate country by country reporting entities 8
3E.......................... Reporting of information about entity with PRRT payable 10
3F.......................... Reporting of information about junior minerals exploration incentive offset 11
3G......................... Electronic invoicing.......................................................... 11
3H......................... Reporting of information about research and development tax offset 12
Part II—Commissioner of Taxation, Second Commissioner of Taxation and Deputy Commissioner of Taxation 14
4............................ Commissioner and Second Commissioners of Taxation... 14
4A......................... Statutory Agency etc. for purposes of Public Service Act 14
5............................ Tenure of Commissioner and Second Commissioners..... 14
5A......................... Remuneration and allowances of Commissioner and Second Commissioners 14
6............................ Leave of absence............................................................... 15
6A......................... Resignation....................................................................... 15
6B.......................... Acting appointments......................................................... 15
6C.......................... Suspension and removal from office of Commissioner or Second Commissioner 16
6D......................... Powers of Second Commissioner..................................... 18
7............................ Deputy Commissioners of Taxation................................. 18
8............................ Delegation......................................................................... 19
Part IIA—The general interest charge 20
8AAA................... Overview.......................................................................... 20
8AAB.................... When the general interest charge applies........................... 20
8AAC.................... Amount of the general interest charge............................... 26
8AAD................... What is the general interest charge rate?......................... 27
8AAE.................... When the charge is due and payable................................. 28
8AAF.................... Notification by Commissioner.......................................... 28
8AAG................... Remission of the charge.................................................... 28
8AAGA................ Rounding of the charge..................................................... 29
8AAH................... Judgment for payment of an unpaid amount..................... 29
Part IIB—Running balance accounts, application of payments and credits, and related matters 31
Division 1—Preliminary 31
8AAZA................. Definitions........................................................................ 31
8AAZAA.............. Amounts relating to Coronavirus economic response payments 34
8AAZB................. Trustee to be treated as separate entity for each capacity... 34
Division 2—Running Balance Accounts (or RBAs) 35
8AAZC................. Establishment of RBAs.................................................... 35
8AAZD................. Allocation of tax debts to RBAs....................................... 35
8AAZF.................. General interest charge on RBA deficit debt..................... 36
8AAZG................. RBA statements................................................................ 36
8AAZH................. Liability for RBA deficit debt........................................... 36
8AAZI................... RBA statement to be evidence.......................................... 37
8AAZJ.................. Evidentiary certificate about RBA transactions etc............ 37
Division 3—Treatment of payments, credits and RBA surpluses 39
8AAZL.................. Amounts covered by this Division................................... 39
8AAZLA............... Method 1—allocating the amount first to an RBA............ 40
8AAZLB............... Method 2—applying the amount first against a non‑RBA tax debt 40
8AAZLC............... RBA surplus and related credits must remain equivalent if one or the other is applied 41
8AAZLD............... Special priority credits...................................................... 41
8AAZLE............... Instructions to Commissioner not binding........................ 42
Division 3A—Refunds of RBA surpluses and credits 43
8AAZLF............... Commissioner must refund RBA surpluses and credits... 43
8AAZLG............... Retaining refunds until information or notification given.. 44
8AAZLGA............ Retaining refunds while Commissioner verifies information 44
8AAZLGB............ Retaining refunds until notification under Division 389 or ascertainment of liability 47
8AAZLH............... How refunds are made...................................................... 49
Division 4—Miscellaneous provisions about tax debts 50
8AAZM................ When payments are treated as received............................. 50
8AAZMA............. Electronic payment of tax debts........................................ 50
8AAZMB.............. Saturdays, Sundays and public holidays........................... 50
8AAZN................. Overpayments made by the Commissioner under taxation laws 51
Part III—Prosecutions and offences 52
Division 1—Preliminary 52
8A......................... Interpretation..................................................................... 52
8AC....................... Application of Part to the Tax Agent Services Act 2009.... 53
Division 2—Offences 54
Subdivision A—Failure to comply with taxation requirements 54
8B.......................... Interpretation..................................................................... 54
8C.......................... Failure to comply with requirements under taxation law... 55
8D......................... Failure to answer questions when attending before the Commissioner etc. 56
8E.......................... Penalties for failure to comply with requirements under taxation law 57
8F.......................... Election to treat offence otherwise than as prescribed taxation offence 57
8G......................... Order to comply with requirement.................................... 58
8H......................... Penalty for failure to comply with order to comply........... 58
8HA...................... Court may order payment of amount in addition to penalty 59
Subdivision B—Offences relating to statements, records and certain other Acts 59
8J........................... Interpretation..................................................................... 59
8K.......................... False or misleading statements.......................................... 66
8L.......................... Incorrectly keeping records etc......................................... 68
8M......................... Penalties for offences against subsections 8K(1) and (1B) and 8L(1) and (1A) 69
8N......................... Recklessly making false or misleading statements............ 69
8Q......................... Recklessly incorrectly keeping records etc........................ 71
8R.......................... Penalties for offences against sections 8N and 8Q........... 71
8S.......................... Election to treat offence otherwise than as prescribed taxation offence 72
8T.......................... Incorrectly keeping records with intention of deceiving or misleading etc. 72
8U......................... Falsifying or concealing identity with intention of deceiving or misleading etc. 73
8V......................... Penalties for offences against sections 8T and 8U............ 74
8W......................... Court may order payment of amount in addition to penalty 74
Subdivision BAA—Offences relating to electronic sales suppression tools 78
8WAA................... Object of this Subdivision................................................ 78
8WAB................... Interpretation..................................................................... 78
8WAC................... Producing or supplying electronic sales suppression tools 79
8WAD................... Possessing electronic sales suppression tools................... 80
8WAE................... Incorrectly keeping records using electronic sales suppression tools 80
Subdivision BA—Offences relating to tax file numbers 81
8WA...................... Unauthorised requirement etc. that tax file number be quoted 81
8WB...................... Unauthorised recording etc. of tax file number................. 82
8WC...................... Conducting affairs so as to avoid tax file number requirements 84
Subdivision C—Miscellaneous 85
8XA...................... Unauthorised access to taxation records........................... 85
8Y......................... Liability of officers etc. of corporations............................ 85
8Z.......................... Evidentiary certificate relating to previous convictions..... 86
Division 3—Prosecution of taxation offences 88
8ZA....................... Prosecution of taxation offences....................................... 88
8ZB....................... Prosecution may be commenced at any time..................... 89
8ZC....................... Place where offence committed......................................... 89
8ZD....................... Conduct by employees or agents of corporations............. 90
8ZE........................ Civil penalty not payable if prosecution instituted............. 90
8ZF........................ Penalties for corporations................................................. 91
8ZG....................... Enforcement of orders for payment.................................. 91
8ZH....................... Penalties not to relieve from tax........................................ 92
Division 4—Prescribed taxation offences 93
8ZJ........................ Prosecution of prescribed taxation offences...................... 93
8ZK....................... Protection of witnesses..................................................... 94
8ZL........................ Averment.......................................................................... 95
8ZM...................... Evidence of authority to institute proceedings................... 95
8ZN....................... Costs................................................................................. 96
Division 5—Service of summons for prescribed taxation offences 97
9............................ Interpretation..................................................................... 97
10.......................... Service of summons by post............................................. 97
11.......................... Notice of conviction in absentia....................................... 98
12.......................... Notice of intention to issue warrant in default of payment 98
13.......................... Limitation of action to enforce payment of fine................. 99
13A....................... Setting aside of conviction or order.................................. 99
13B........................ Proof of service of summons or notice........................... 102
13C........................ Application of other laws................................................ 102
Division 6—Setting aside etc. of conviction or order on application of Commissioner 103
13CA..................... Setting aside etc. of conviction or order on application of Commissioner 103
Part IIIA—Co‑operation between Commonwealth and State taxation authorities 105
Division 1—Interpretation 105
13D....................... Interpretation................................................................... 105
Division 2—Trans‑border investigations 107
13E........................ State taxation officers may refer matters to Commissioner for investigation 107
13F........................ Access to documents etc................................................. 107
13G....................... Commissioner may obtain information and evidence...... 108
Division 4—Certification by State taxation officer of copies of, and extracts from, documents 110
13K........................ Certification by State taxation officer of copies of, and extracts from, documents 110
Division 5—Australian Taxation Office may perform functions under State/Territory debits tax laws 112
13L........................ Australian Taxation Office may perform functions under State/Territory debits tax laws 112
Part IVA—Departure from Australia of certain tax debtors 114
Division 1—Interpretation 114
14Q....................... Interpretation................................................................... 114
Division 2—Prohibition and authorisation of departure of certain tax debtors 115
14R........................ Departure from Australia of certain tax debtors prohibited 115
14S........................ Departure prohibition orders........................................... 115
14T........................ Revocation and variation of departure prohibition orders 116
14U....................... Departure authorisation certificates................................. 117
Division 3—Appeals from, and review of, decisions of the Commissioner 120
14V....................... Appeals to courts against making of departure prohibition orders 120
14W....................... Jurisdiction of courts...................................................... 120
14X....................... Orders of court on appeal............................................... 120
14Y....................... Applications for review of certain decisions................... 121
Division 4—Enforcement 122
14Z........................ Powers of authorised officers......................................... 122
14ZA..................... Certain tax debtors to produce authority to depart etc..... 123
Part IVC—Taxation objections, reviews and appeals 124
Division 1—Introduction 124
14ZL...................... Part applies to taxation objections................................... 124
14ZM.................... Division 2—Interpretive................................................. 124
14ZN..................... Division 3—Taxation objections.................................... 124
14ZO..................... Division 4—Tribunal review.......................................... 124
14ZP...................... Division 5—Federal Court appeals................................. 124
Division 2—Interpretive provisions 125
14ZQ..................... General interpretation provisions.................................... 125
14ZR..................... Taxation decisions covered by single notice to be treated as single decision 126
14ZS...................... Ineligible income tax remission decisions....................... 126
Division 3—Taxation objections 128
14ZU..................... How taxation objections are to be made.......................... 128
14ZV..................... Limited objection rights in the case of certain amended taxation decisions 128
14ZVA.................. Limited objection rights because of other objections....... 128
14ZVB.................. Objections relating to excess concessional contributions 129
14ZVC.................. Objections relating to non‑concessional contributions.... 130
14ZW.................... When taxation objections are to be made........................ 131
14ZX..................... Commissioner to consider applications for extension of time 137
14ZY..................... Commissioner to decide taxation objections................... 138
14ZYA.................. Person may require Commissioner to make an objection decision 138
14ZYB.................. Requiring Commissioner to make a private ruling.......... 139
14ZZ...................... Person may seek review of, or appeal against, Commissioner’s decision 140
Division 4—AAT review of objection decisions and extension of time refusal decisions 141
14ZZA................... Modified AAT Act to apply........................................... 141
14ZZB................... Sections 27, 28, 41 and 44A of the AAT Act not to apply to certain decisions 141
14ZZC................... Modification of section 29 of the AAT Act.................... 141
14ZZD................... Modification of section 30 of the AAT Act.................... 142
14ZZE................... Hearings before Tribunal to be held in private if applicant so requests 142
14ZZF................... Modification of section 37 of the AAT Act.................... 142
14ZZG................... Modification of section 38 of the AAT Act.................... 143
14ZZJ.................... Modification of section 43 of the AAT Act.................... 144
14ZZK................... Grounds of objection and burden of proof..................... 144
14ZZL................... Implementation of Tribunal decisions............................. 145
14ZZM.................. Pending review not to affect implementation of taxation decisions 145
Division 5—Court appeals against objection decisions 146
14ZZN................... Time limit for appeals..................................................... 146
14ZZO................... Grounds of objection and burden of proof..................... 146
14ZZP................... Order of court on objection decision............................... 146
14ZZQ................... Implementation of court order in respect of objection decision 146
14ZZR................... Pending appeal not to affect implementation of taxation decisions 147
14ZZS................... Transfer of certain proceedings to Federal Circuit and Family Court of Australia (Division 1) 147
Part IVD—Protection for whistleblowers 150
14ZZT................... Disclosures qualifying for protection under this Part...... 150
14ZZU................... Eligible whistleblowers................................................... 151
14ZZV................... Eligible recipients............................................................ 152
14ZZW.................. Confidentiality of whistleblower’s identity..................... 153
14ZZX................... Disclosure that qualifies for protection not actionable etc. 154
14ZZY................... Victimisation prohibited.................................................. 155
14ZZZ................... Compensation and other remedies—circumstances in which an order may be made 156
14ZZZAA............. Detriment........................................................................ 158
14ZZZA................ Compensation and other remedies—orders that may be made 159
14ZZZB................. Identifying information not to be disclosed etc. to courts or tribunals 161
14ZZZC................. Costs only if proceedings instituted vexatiously etc........ 161
14ZZZD................ Interaction between civil proceedings and criminal offences 162
14ZZZE................. Compensation for acquisition of property....................... 162
Part V—Miscellaneous 163
15.......................... Appearance by Commissioner etc................................... 163
15A....................... Certification by Commissioner of copies of, and extracts from, documents 164
15B........................ Recoverable advances..................................................... 166
15C........................ Recoverable payments.................................................... 167
15D....................... Reports about recoverable advances and recoverable payments 169
16.......................... Payments out of Consolidated Revenue Fund................ 171
16A....................... Regulations may provide for methods of payment of tax liabilities etc. 172
16B........................ Certain liabilities to be reduced to nearest multiple of 5 cents.. 173
17.......................... Powers of taxation officers in relation to references to currency etc. 173
17A....................... Powers of Federal Court and Federal Circuit and Family Court of Australia (Division 2) in respect of taxation matters............................................................................ 174
18.......................... Regulations..................................................................... 175
Schedule 1—Collection and recovery of income tax and other liabilities 176
Chapter 2—Collection, recovery and administration of income tax 176
Part 2‑1—Introduction to the Pay as you go (PAYG) system 176
Division 6—Guide to Parts 2‑5 and 2‑10 176
6‑1......................... What Parts 2‑5 and 2‑10 are about.................................. 176
6‑5......................... The Pay as you go (PAYG) system............................... 176
6‑10....................... How the amounts collected are dealt with....................... 177
Part 2‑5—Pay as you go (PAYG) withholding 178
Division 10—Guide to Part 2‑5 178
10‑1....................... What this Part is about.................................................... 178
10‑5....................... Summary of withholding payments................................ 178
Division 11—Preliminary matters 181
11‑1....................... Object of this Part........................................................... 181
11‑5....................... Constructive payment..................................................... 181
Division 12—Payments from which amounts must be withheld 183
Subdivision 12‑A—General rules 183
12‑1....................... General exceptions.......................................................... 184
12‑5....................... What to do if more than one provision requires a withholding 185
12‑7....................... Division does not apply to alienated personal services payments 187
12‑10..................... Division does not apply to non‑cash benefits................. 187
12‑20..................... Application of Division and regulations to non‑share dividends 187
Subdivision 12‑B—Payments for work and services 188
12‑35..................... Payment to employee...................................................... 188
12‑40..................... Payment to company director.......................................... 188
12‑45..................... Payment to office holder................................................. 188
12‑47..................... Payment to religious practitioners................................... 189
12‑50..................... Return to work payment................................................. 189
12‑55..................... Voluntary agreement to withhold.................................... 190
12‑60..................... Payment under labour hire arrangement, or specified by regulations 191
Subdivision 12‑C—Payments for retirement or because of termination of employment 192
12‑80..................... Superannuation income streams and annuities................ 192
12‑85..................... Superannuation lump sums and payments for termination of employment 192
12‑90..................... Unused leave payments.................................................. 192
Subdivision 12‑D—Benefit and compensation payments 192
12‑110................... Social Security or other benefit payment......................... 193
12‑115................... Commonwealth education or training payment............... 193
12‑120................... Compensation, sickness or accident payment................. 194
Subdivision 12‑E—Payments where TFN or ABN not quoted 194
Payment in respect of investment 195
12‑140................... Recipient does not quote tax file number........................ 195
12‑145................... Investor becoming presently entitled to income of a unit trust 196
12‑150................... Limited application of section 12‑140 to payment under financial arrangement 197
12‑152................... Limited application of section 12‑140 to payment covered by section 12A‑205 198
12‑155................... When investor may quote ABN as alternative................ 198
12‑160................... Investment body unaware that exemption from quoting TFN has stopped applying 198
12‑165................... Exception for fully franked dividend.............................. 199
12‑170................... Exception for payments below thresholds set by regulations 199
Payment of income of closely held trust where TFN not quoted 199
12‑175................... Trustee distributes income of closely held trust.............. 199
12‑180................... Beneficiary becomes presently entitled to income of closely held trust 201
12‑185................... Exception for payments below thresholds set by regulations 202
Payment for a supply 203
12‑190................... Recipient does not quote ABN....................................... 203
Subdivision 12‑F—Dividend, interest and royalty payments 206
Dividends 207
12‑210................... Dividend payment to overseas person............................ 207
12‑215................... Dividend payment received for foreign resident............. 207
12‑220................... Application to part of a dividend..................................... 208
12‑225................... Application to distribution by a liquidator or other person 208
Interest 208
12‑245................... Interest payment to overseas person............................... 208
12‑250................... Interest payment received for foreign resident................ 209
12‑255................... Interest payment derived by lender in carrying on business through overseas permanent establishment 209
12‑260................... Lender to notify borrower if interest derived through overseas permanent establishment 210
Royalties 210
12‑280................... Royalty payment to overseas person............................... 210
12‑285................... Royalty payment received for foreign resident................ 211
General 212
12‑300................... Limits on amount withheld under this Subdivision......... 212
Subdivision 12‑FA—Departing Australia superannuation payments 212
12‑305................... Departing Australia superannuation payment................. 212
12‑310................... Limits on amount withheld under this Subdivision......... 212
Subdivision 12‑FAA—Excess untaxed roll‑over amount 213
12‑312................... Untaxed roll‑over superannuation benefits..................... 213
12‑313................... Limits on amount withheld under this Subdivision......... 213
Subdivision 12‑FB—Payments to foreign residents etc. 214
12‑315................... Payment to foreign resident etc....................................... 214
12‑317................... Payment received for foreign resident etc....................... 215
12‑319................... Exemptions from withholding obligations under this Subdivision 216
Subdivision 12‑FC—Labour mobility programs 217
12‑319A................ Payment to employee...................................................... 218
Subdivision 12‑G—Payments in respect of mining on Aboriginal land, and natural resources 218
Mining on Aboriginal land 218
12‑320................... Mining payment.............................................................. 218
Natural resources 219
12‑325................... Natural resource payment............................................... 219
12‑330................... Payer must ask Commissioner how much to withhold... 220
12‑335................... Commissioner may exempt from section 12‑330, subject to conditions 220
Subdivision 12‑H—Distributions of withholding MIT income 221
Guide to Subdivision 12‑H 221
12‑375................... What this Subdivision is about....................................... 221
Operative provisions 223
12‑383................... Meaning of withholding MIT.......................................... 223
12‑385................... Withholding by withholding MITs................................. 224
12‑390................... Withholding by custodians and other entities.................. 225
12‑395................... Requirement to give notice or make information available 228
12‑405................... Meaning of fund payment—general case........................ 231
12‑410................... Entity to whom payment is made.................................... 234
12‑415................... Failure to give notice or make information available: administrative penalty 234
12‑420................... Agency rules................................................................... 235
12‑425................... Meaning of clean building managed investment trust.... 235
12‑430................... Meaning of clean building.............................................. 236
12‑435................... Meaning of non‑concessional MIT income.................... 237
12‑436................... Meaning of asset entity, operating entity, cross staple arrangement and stapled entity 238
12‑437................... Meaning of MIT cross staple arrangement income....... 239
12‑438................... MIT cross staple arrangement income—de minimis exception 241
12‑439................... MIT cross staple arrangement income—approved economic infrastructure facility exception 243
12‑440................... Transitional—MIT cross staple arrangement income...... 244
12‑441................... Integrity rule—concessional cross staple rent cap........... 247
12‑442................... Meaning of excepted MIT CSA income........................... 248
12‑443................... Concessional cross staple rent cap—existing lease with specified rent or rent method 248
12‑444................... Concessional cross staple rent cap—general................... 249
12‑445................... Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income........................................................................................ 251
12‑446................... Meaning of MIT trading trust income............................ 252
12‑447................... Transitional—MIT trading trust income......................... 253
12‑448................... Meaning of MIT agricultural income, Australian agricultural land for rent and Division 6C land 254
12‑449................... Transitional—MIT agricultural income........................... 255
12‑450................... Meaning of MIT residential housing income.................. 256
12‑451................... Transitional—MIT residential housing income............... 257
12‑452................... Meaning of residential dwelling asset............................ 259
12‑453................... MIT agricultural income and MIT residential housing income—capital gains in relation to membership interests........................................................................... 259
Subdivision 12‑J—FHSS released amounts 261
12‑460................... FHSS released amounts.................................................. 261
Division 12A—Distributions by AMITs (including deemed payments) 262
Guide to Division 12A 262
12A‑1.................... What this Division is about............................................. 262
Subdivision 12A‑A—Distributions by AMITs relating to dividend, interest and royalties 263
Guide to Subdivision 12A‑A 263
12A‑5.................... What this Subdivision is about....................................... 263
Operative provisions 263
12A‑10.................. Deemed payments—no obligation to withhold under Subdivision 12‑F (dividend, interest and royalty payments)....................................................................... 263
12A‑15.................. Dividend, interest or royalty payments relating to AMIT—requirement to give notice or make information available.......................................................................... 264
12A‑20.................. Failure to give notice or make information available under section 12A‑15: administrative penalty 267
12A‑25.................. Meaning of AMIT DIR payment..................................... 267
12A‑30.................. Meaning of AMIT dividend payment.............................. 268
12A‑35.................. Meaning of AMIT interest payment................................ 269
12A‑40.................. Meaning of AMIT royalty payment................................. 270
Subdivision 12A‑B—Distributions by AMITs relating to Subdivision 12‑H fund payments 271
Guide to Subdivision 12A‑B 271
12A‑100................ What this Subdivision is about....................................... 271
Operative provisions 271
12A‑105................ Deemed payments—no obligation to withhold under Subdivision 12‑H 271
12A‑110................ Meaning of fund payment—AMITs............................... 272
Subdivision 12A‑C—Deemed payments by AMITs etc. 276
Guide to Subdivision 12A‑C 276
12A‑200................ What this Subdivision is about....................................... 276
Operative provisions 277
12A‑205................ Issue of AMMA statement etc. deemed to be payment... 277
12A‑210................ Post‑AMMA actual payment and pre‑AMMA actual payment in respect of deemed payment 279
12A‑215................ AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc. 280
12A‑220................ Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc. 281
Division 13—Alienated personal services payments 284
13‑1....................... Object of this Division.................................................... 284
13‑5....................... Payment to the Commissioner in respect of alienated personal services payments 284
13‑10..................... Alienated personal services payments............................. 287
13‑15..................... Personal services payment remitters............................... 288
13‑20..................... Time for payments to Commissioner for alienated personal services payments made during 2000‑01 289
Division 14—Benefits, gains and taxable supplies for which amounts must be paid to the Commissioner 290
Subdivision 14‑A—Non‑cash benefits 290
14‑1....................... Object of this Subdivision.............................................. 290
14‑5....................... Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding..................................................................... 290
14‑10..................... Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit 291
14‑15..................... Payer can recover amount paid to the Commissioner...... 292
Subdivision 14‑B—Accruing gains 292
14‑50..................... Object of this Subdivision.............................................. 292
14‑55..................... Liability for TFN withholding tax................................... 293
14‑60..................... Investment body may recover TFN withholding tax from investor 294
14‑65..................... Application of rules in Division 18................................. 294
14‑75..................... Overpayment of TFN withholding tax............................ 295
14‑85..................... Other laws do not exempt from TFN withholding tax.... 295
Subdivision 14‑C—Shares and rights under employee share schemes 296
14‑155................... Liability for TFN withholding tax (ESS)........................ 296
14‑160................... Employer may give individual tax file numbers to provider 297
14‑165................... Provider may recover TFN withholding tax (ESS) from individual 297
14‑170................... Application of rules in Division 18................................. 298
14‑175................... Overpayment of TFN withholding tax (ESS)................. 298
14‑180................... Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997 298
Subdivision 14‑D—Capital proceeds involving foreign residents and taxable Australian property 299
14‑200................... Certain acquisitions of taxable Australian property from foreign residents 299
14‑205................... Effect of look‑through earnout rights.............................. 300
14‑210................... Whether an entity is a relevant foreign resident............... 301
14‑215................... Excluded transactions..................................................... 303
14‑220................... Commissioner clearance certificates................................ 305
14‑225................... Entity declarations........................................................... 305
14‑230................... Administrative penalties for false or misleading declarations 306
14‑235................... Varying amounts to be paid to the Commissioner.......... 307
Subdivision 14‑E—GST payable on taxable supplies of certain real property 308
14‑250................... Recipients of certain taxable supplies of real property must pay amounts to Commissioner 309
14‑255................... Notification by suppliers of residential premises etc....... 311
Division 15—Working out the amount to withhold 314
Guide to Division 15 326
15‑1....................... What this Division is about............................................. 314
Subdivision 15‑A—Working out how much to withhold 314
15‑10..................... How much to withhold................................................... 315
15‑15..................... Variation of amounts required to be withheld................. 315
Subdivision 15‑B—Withholding schedules and regulations 316
15‑25..................... Commissioner’s power to make withholding schedules. 316
15‑30..................... Matters to be considered when making withholding schedules 317
15‑35..................... Regulations about withholding....................................... 318
Subdivision 15‑C—Declarations 319
15‑50..................... Declarations.................................................................... 319
Division 16—Payer’s obligations and rights 321
Guide to Division 16 333
16‑1....................... What this Division is about............................................. 321
Subdivision 16‑A—To withhold 321
When to withhold 322
16‑5....................... When to withhold an amount.......................................... 322
16‑7....................... Treat entity obliged to pay under Subdivision 12A‑C as having withheld amount under Division 12 322
16‑20..................... Payer discharged from liability to recipient for amount withheld 323
Penalties for not withholding 323
16‑25..................... Failure to withhold: offence............................................ 323
16‑30..................... Failure to withhold: administrative penalty for entity other than exempt Australian government agency 324
16‑35..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty............................ 325
16‑40..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment.............................................. 326
16‑43..................... Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.......................................................... 326
Subdivision 16‑B—To pay withheld amounts to the Commissioner 327
When and how to pay amounts to the Commissioner 327
16‑70..................... Entity to pay amounts to Commissioner......................... 327
16‑75..................... When amounts must be paid to Commissioner............... 328
16‑80..................... Penalty for failure to pay within time.............................. 330
16‑85..................... How amounts are to be paid........................................... 330
Who is a large, medium or small withholder 331
16‑95..................... Meaning of large withholder.......................................... 331
16‑100................... Meaning of medium withholder...................................... 332
16‑105................... Meaning of small withholder.......................................... 332
16‑110................... Commissioner may vary withholder’s status downwards 332
16‑115................... Commissioner may vary withholder’s status upwards... 333
Subdivision 16‑BA—To be registered 334
Registration of withholders 335
16‑140................... Withholders must be registered....................................... 335
16‑141................... Registration and cancellation........................................... 336
Branch registration 336
16‑142................... Branches may be registered............................................ 336
16‑143................... Separate amounts for entities and branches..................... 337
16‑144................... Cancellation of branch registration.................................. 337
16‑145................... Effect on branches of cancelling the entity’s registration 337
Registration of employers of working holiday makers 338
16‑146................... Employers of working holiday makers must be registered 338
16‑147................... Registering employers of working holiday makers......... 338
16‑148................... Cancelling the registration of employers of working holiday makers 340
Subdivision 16‑C—To provide information 342
To the Commissioner 342
16‑150................... Commissioner must be notified of amounts.................... 342
16‑152................... Annual reports—Withholding payments covered by section 12‑175 343
16‑153................... Annual reports—other payments.................................... 344
To recipients of withholding payments 347
16‑155................... Annual payment summary.............................................. 347
16‑156................... Annual payment summary for sections 12‑175 and 12‑180 349
16‑157................... Payment summary for Subdivision 12‑H....................... 349
16‑160................... Part‑year payment summary........................................... 350
16‑165................... Payment summaries for superannuation lump sums and payments for termination of employment 351
16‑166................... Payment summary for a departing Australia superannuation payment 352
16‑167................... Payment summary for payment to recipient who does not quote ABN 352
16‑170................... Form and content of payment summary.......................... 353
16‑175................... Penalty for not providing payment summary.................. 354
16‑180................... Commissioner may exempt entity from giving payment summary 355
16‑182................... Definition of reportable employer superannuation contribution 355
Subdivision 16‑D—Additional rights and obligations of entity that makes a payment 356
16‑195................... Payer’s right to recover amounts of penalty: certain withholding taxes 356
Division 18—Recipient’s entitlements and obligations 358
Subdivision 18‑A—Crediting withheld amounts 358
Guide to Subdivision 18‑A 358
18‑1....................... What this Subdivision is about....................................... 358
General exception 360
18‑5....................... No credit for refunded amount........................................ 360
Entitlement to credits: income tax liability 360
18‑10..................... Application of sections 18‑15, 18‑20 and 18‑25............. 360
18‑15..................... Tax credit for recipient of withholding payments............ 361
18‑20..................... Tax credit where recipient is a partnership...................... 361
18‑25..................... Tax credit where recipient is a trust................................. 362
18‑27..................... Tax credit for alienated personal services payments........ 364
Entitlement to credits: dividend, interest or royalty, amount attributable to fund payment or labour mobility program 364
18‑30..................... Credit: dividend, interest or royalty................................. 364
18‑32..................... Credit: amount attributable to fund payment................... 365
18‑33..................... Credit: labour mobility programs.................................... 366
18‑35..................... Credit: penalty under section 12‑415, 16‑30, 16‑35 or 16‑40 or related general interest charge 366
18‑40..................... Credit: liability under Part 4‑25....................................... 368
Entitlement to credit: departing Australia superannuation payment 370
18‑42..................... Credit—departing Australia superannuation payment..... 370
Entitlement to credit: mining payment 371
18‑45..................... Credit—mining payment................................................. 371
Entitlement to credit: Petroleum resource rent tax 372
18‑55..................... Credit—Natural resource payments................................ 372
Entitlement to credit: taxable supply of real property 372
18‑60..................... Credit—payment relating to taxable supply of real property 372
Subdivision 18‑B—Refund of certain withheld amounts 373
18‑65..................... Refund of withheld amounts by the payer to the recipient 373
18‑70..................... Refund of withheld amounts by the Commissioner to the recipient 376
18‑80..................... Refund by Commissioner of amount withheld from payment in respect of investment 378
18‑85..................... Refund by Commissioner of amount withheld from payment in respect of supply of real property 379
Subdivision 18‑C—Recipient’s obligations 379
18‑100................... Obligation to keep payment summary............................. 379
Subdivision 18‑D—Directors etc. of non‑complying companies 380
Object of Subdivision 381
18‑120................... Object of Subdivision..................................................... 381
PAYG withholding non‑compliance tax 381
18‑125................... Directors of non‑complying companies.......................... 381
18‑130................... Directors of non‑complying companies—tax reduced in certain circumstances 383
18‑135................... Associates of directors of non‑complying companies..... 385
18‑140................... Notices............................................................................ 388
18‑145................... When PAYG withholding non‑compliance tax must be paid.. 390
18‑150................... General interest charge payable on unpaid PAYG withholding non‑compliance tax 390
18‑155................... Validity of decisions and evidence.................................. 391
18‑160................... Rights of indemnity and contribution.............................. 391
Credits for later compliance 392
18‑165................... Credits for later compliance—scope............................... 392
18‑170................... Credits for later compliance—Commissioner must give notice in certain circumstances 393
18‑175................... Credits for later compliance—Commissioner may give notice 394
18‑180................... Effect of earlier credits.................................................... 395
Other provisions 396
18‑185................... When Commissioner may give notice............................. 396
18‑190................... Review of decisions........................................................ 397
Division 20—Other matters 398
Subdivision 20‑B—Offences 398
20‑35..................... Offences......................................................................... 398
20‑40..................... Joining of charges........................................................... 399
20‑45..................... Offences that would otherwise be committed by a partnership or unincorporated company 400
Subdivision 20‑D—Review of decisions 401
20‑80..................... Reviewable decisions...................................................... 401
Division 21—Entitlements relating to insolvent ADIs and general insurers 403
Guide to Division 21 415
21‑1....................... What this Division is about............................................. 403
Subdivision 21‑A—Treatment of some payments by APRA 403
21‑5....................... APRA treated like ADI or general insurance company.. 403
Part 2‑10—Pay as you go (PAYG) instalments 405
Division 45—Instalment payments 405
Guide to Division 45 418
45‑1....................... What this Division is about............................................. 406
Subdivision 45‑A—Basic rules 407
45‑5....................... Object of this Part........................................................... 407
45‑10..................... Application of Part.......................................................... 409
45‑15..................... Liability for instalments.................................................. 409
45‑20..................... Information to be given to the Commissioner by certain payers 410
45‑25..................... Penalty for failure to notify Commissioner..................... 411
45‑30..................... Credit for instalments payable......................................... 411
Subdivision 45‑B—When instalments are due 412
45‑50..................... Liability to pay instalments............................................. 412
45‑60..................... Meaning of instalment quarter....................................... 413
45‑61..................... When quarterly instalments are due—payers of quarterly instalments 414
45‑65..................... Meaning of instalment month......................................... 415
45‑67..................... When monthly instalments are due—payers of monthly instalments 415
45‑70..................... When annual instalments are due.................................... 416
45‑72..................... Means of payment of instalment..................................... 416
45‑75..................... Instalments recoverable in same way as income tax........ 416
45‑80..................... General interest charge on late payment.......................... 416
45‑90..................... Commissioner may withdraw instalment rate................. 416
Subdivision 45‑C—Working out instalment amounts 417
45‑110................... How to work out amount of quarterly instalment on instalment income basis 417
45‑112................... Amount of instalment for quarterly payer who pays on basis of GDP‑adjusted notional tax 418
45‑114................... How to work out amount of monthly instalment............ 419
45‑115................... How to work out amount of annual instalment............... 420
45‑120................... Meaning of instalment income........................................ 421
Subdivision 45‑D—Quarterly payers 425
45‑125................... Quarterly payer who pays instalments on the basis of instalment income 425
45‑130................... Quarterly payer who pays on the basis of GDP‑adjusted notional tax 427
45‑132................... Quarterly payer who pays 4 instalments annually on the basis of GDP‑adjusted notional tax 430
45‑134................... Quarterly payer who pays 2 instalments annually on the basis of GDP‑adjusted notional tax 431
Subdivision 45‑DA—Monthly payers 432
45‑136................... Monthly payer................................................................ 432
45‑138................... Monthly payer requirement............................................. 433
Subdivision 45‑E—Annual payers 435
When you start and stop being an annual payer 435
45‑140................... Choosing to pay annual instalments................................ 435
45‑145................... Meaning of instalment group......................................... 437
45‑150................... Entity stops being annual payer if involved with GST registration or instalment group 437
45‑155................... Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly 438
45‑160................... Head company of a consolidated group stops being annual payer 439
Subdivision 45‑F—Varying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income 440
45‑200................... Application..................................................................... 440
45‑205................... Choosing a varied instalment rate................................... 440
45‑210................... Notifying Commissioner of varied instalment rate.......... 441
45‑215................... Credit on using varied rate in certain cases..................... 441
Subdivision 45‑G—General interest charge payable in certain cases if instalments are too low 442
45‑225................... Effect of Subdivision in relation to monthly payers........ 443
45‑230................... Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate 443
45‑232................... Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax........................................................................................ 445
45‑233................... Reduction in GIC liability under section 45‑232 if shortfall is made up in later instalment 453
45‑235................... Liability to GIC on shortfall in annual instalment........... 454
45‑240................... Commissioner may remit general interest charge............ 456
Subdivision 45‑H—Partnership income 456
45‑260................... Instalment income for a period in which you are in a partnership 456
Subdivision 45‑I—Trust income included in instalment income of beneficiary 457
45‑280................... Instalment income for a period in which you are a beneficiary of a trust 458
45‑285................... Instalment income includes distributions by certain resident unit trusts 460
45‑286................... Instalment income includes distributions by certain managed investment trusts 462
45‑287................... When trusts are disqualified due to concentrated ownership 462
45‑288................... Resident investment trusts for beneficiaries who are absolutely entitled 464
45‑290................... Exceptions to exclusion of trust capital gains from beneficiary’s instalment income 465
Subdivision 45‑J—How Commissioner works out your instalment rate and notional tax 465
45‑320................... Working out instalment rate............................................ 465
45‑325................... Working out your notional tax........................................ 466
45‑330................... Working out your adjusted taxable income.................... 468
45‑335................... Working out your adjusted withholding income............. 470
45‑340................... Adjusted tax on adjusted taxable income or on adjusted withholding income 470
Subdivision 45‑K—How Commissioner works out your benchmark instalment rate and benchmark tax 473
45‑355................... When Commissioner works out benchmark instalment rate and benchmark tax 473
45‑360................... How Commissioner works out benchmark instalment rate 474
45‑365................... Working out your benchmark tax................................... 474
45‑370................... Working out your adjusted assessed taxable income for the variation year 475
45‑375................... Adjusted assessed tax on adjusted assessed taxable income 476
Subdivision 45‑L—How Commissioner works out amount of quarterly instalment on basis of GDP‑adjusted notional tax 478
45‑400................... Working out amount of instalment—payers of 4 quarterly instalments 479
45‑402................... Working out amount of instalment—payers of 2 quarterly instalments 480
45‑405................... Working out your GDP‑adjusted notional tax................ 482
Subdivision 45‑M—How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax 484
45‑410................... Working out amount of instalment—payers of 4 quarterly instalments 485
45‑412................... Working out amount of instalment—payers of 2 quarterly instalments 487
45‑415................... Estimating your benchmark tax....................................... 488
45‑420................... Credit in certain cases where amount of instalment is nil 489
Subdivision 45‑N—How this Part applies to the trustee of a trust 490
Trustees to whom this Part applies 490
45‑450................... Trustees to whom a single instalment rate is given......... 490
45‑455................... Trustees to whom several instalment rates are given....... 491
45‑460................... Rest of Subdivision applies only to multi‑rate trustees... 492
45‑465................... Meaning of instalment income........................................ 492
45‑468................... Multi‑rate trustee may pay quarterly instalments............. 493
How Commissioner works out instalment rate and notional tax for a multi‑rate trustee 493
45‑470................... Working out instalment rate............................................ 493
45‑473................... Commissioner must notify you of notional tax............... 494
45‑475................... Working out your notional tax........................................ 494
45‑480................... Working out your adjusted taxable income.................... 495
45‑483................... Meaning of reduced beneficiary’s share and reduced no beneficiary’s share 495
45‑485................... Working out your adjusted withholding income............. 496
How Commissioner works out benchmark instalment rate and benchmark tax for a multi‑rate trustee 497
45‑525................... When Commissioner works out benchmark instalment rate and benchmark tax 497
45‑530................... How Commissioner works out benchmark instalment rate 497
45‑535................... Working out your benchmark tax................................... 498
Subdivision 45‑P—Anti‑avoidance rules 498
45‑595................... Object of this Subdivision.............................................. 499
45‑597................... Effect of Subdivision in relation to instalment months.... 499
45‑600................... General interest charge on tax benefit relating to instalments 499
45‑605................... When do you get a tax benefit from a scheme?............... 501
45‑610................... What is your tax position for an income year?................ 502
45‑615................... What is your hypothetical tax position for an income year? 504
45‑620................... Amount on which GIC is payable, and period for which it is payable 504
45‑625................... Credit if you also got a tax detriment from the scheme... 505
45‑630................... When do you get a tax detriment from a scheme?........... 506
45‑635................... No tax benefit or detriment results from choice for which income tax law expressly provides 507
45‑640................... Commissioner may remit general interest charge in special cases 509
Subdivision 45‑Q—General rules for consolidated groups 509
Guide to Subdivision 45‑Q 509
45‑700................... What this Subdivision is about....................................... 509
Application of Subdivision 510
45‑703................... Effect of this Subdivision and Subdivision 45‑R in relation to monthly payers 510
45‑705................... Application of Subdivision to head company................. 511
Usual operation of this Part for consolidated group members 515
45‑710................... Single entity rule............................................................. 515
45‑715................... When instalments are due—modification of section 45‑61 516
45‑720................... Head company cannot be an annual payer—modification of section 45‑140 516
Membership changes 516
45‑740................... Change of head company................................................ 516
45‑755................... Entry rule (for an entity that becomes a subsidiary member of a consolidated group) 519
45‑760................... Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group) 520
45‑775................... Commissioner’s power to work out different instalment rate or GDP‑adjusted notional tax 522
Subdivision 45‑R—Special rules for consolidated groups 524
Guide to Subdivision 45‑R 524
45‑850................... What this Subdivision is about....................................... 524
Operative provisions 525
45‑855................... Section 701‑1 disregarded for certain purposes.............. 525
45‑860................... Member having a different instalment period.................. 525
45‑865................... Credit rule....................................................................... 526
45‑870................... Head company’s liability to GIC on shortfall in quarterly instalment 528
45‑875................... Other rules about the general interest charge................... 531
45‑880................... Continued application of Subdivision 45‑Q to the head company of an acquired group 532
45‑885................... Early application of Subdivision 45‑Q to the head company of a new group 534
Subdivision 45‑S—MEC groups 535
Guide to Subdivision 45‑S 535
45‑900................... What this Subdivision is about....................................... 535
Preliminary 536
45‑905................... Objects of Subdivision................................................... 536
General modification rules 537
45‑910................... Extended operation of Part to cover MEC groups.......... 537
Extended operation of Subdivision 45‑Q 538
45‑913................... Sections 45‑705 and 45‑740 do not apply to members of MEC groups 538
45‑915................... Application of Subdivision 45‑Q to provisional head company 538
45‑917................... Assumption for applying section 45‑710 (single entity rule) 542
45‑920................... Change of provisional head company............................. 542
45‑922................... Life insurance company.................................................. 545
Extended operation of Subdivision 45‑R 546
45‑925................... Additional modifications of sections 45‑855 and 45‑860 546
45‑930................... Modifications of sections 45‑865 and 45‑870 and a related provision 546
45‑935................... Additional modifications of section 45‑885.................... 547
Part 2‑15—Returns and assessments 548
Division 70—Tax receipts 548
Guide to Division 70 554
70‑1....................... What this Division is about............................................. 548
Subdivision 70‑A—Tax receipts 548
70‑5....................... Tax receipt to be provided to certain individual taxpayers 549
Part 2‑30—Collecting Medicare levy with income tax 551
Division 90—Medicare levy and Medicare levy surcharge 551
Subdivision 90‑A—Treatment like income tax 551
90‑1....................... Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax........................................................................................ 551
Part 2‑35—Excess superannuation contributions 552
Division 97—Excess contributions determinations 552
Subdivision 97‑A—Excess concessional contributions determinations 552
Guide to Subdivision 97‑A 552
97‑1....................... What this Subdivision is about....................................... 552
Operative provisions 552
97‑5....................... Determination of excess concessional contributions....... 552
97‑10..................... Review............................................................................ 553
Subdivision 97‑B—Excess non‑concessional contributions determinations 553
Guide to Subdivision 97‑B 553
97‑20..................... What this Subdivision is about....................................... 553
Operative provisions 554
97‑25..................... Excess non‑concessional contributions determinations... 554
97‑30..................... Associated earnings........................................................ 554
97‑35..................... Review............................................................................ 555