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TAXATION ADMINISTRATION ACT 1953 - SCHEDULE 1

Collection and recovery of income tax and other liabilities

Note:       See section 3AA.

Chapter 2 -- Collection, recovery and administration of income tax

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

Division 6 -- Guide to Parts 2-5 and 2-10

6-1   What Parts 2-5 and 2-10 are about

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

Amounts collected under this system also go towards meeting liability for Medicare levy and liability to repay debts under certain income-contingent loan schemes.

Table of sections

6-5            The Pay as you go (PAYG) system

6-10          How the amounts collected are dealt with

6-5   The Pay as you go (PAYG) system

             (1)  Parts 2-5 and 2-10 establish the PAYG system, which has 2 components:

                        •   PAYG withholding (Part 2-5)

                        •   PAYG instalments (Part 2-10).

PAYG withholding

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

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

PAYG instalments

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

                        •   income subject to PAYG withholding (with certain exceptions)

                        •   exempt income, or income that is otherwise not assessable.

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

6-10   How the amounts collected are dealt with

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

Part 2-5 -- Pay as you go (PAYG) withholding

Division 10 -- Guide to Part 2-5

10-1   What this Part is about

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

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

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

10-5   Summary of withholding payments

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

Note:          The obligation to pay an amount to the Commissioner is imposed on the entity making the withholding payment (except for items 17, 19 and 22, and 26 (to the extent that it covers subsection 12-390(4))).

 

Summary of withholding payments

Item

Withholding payment

Section

1

A payment of salary etc. to an employee

12-35

2

A payment of remuneration to the director of a company

12-40

3

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

12-45

3A

a payment to a * religious practitioner

12-47

4

A return to work payment to an individual

12-50

5

A payment that is covered by a voluntary agreement

12-55

6

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

12-60

7

A * superannuation income stream or an annuity

12-80

8

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

12-85

9

An unused leave payment

12-90

10

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

12-110

11

A Commonwealth education or training payment

12-115

12

A compensation, sickness or accident payment

12-120

13

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

12-140

14

Investor becoming presently entitled to income of a unit trust

12-145

14A

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

12-175

14B

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

12-180

15

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

12-190

16

A dividend payment to an overseas person

12-210

17

A dividend payment received for a foreign resident

12-215

18

An interest payment to an overseas person

12-245

19

An interest payment received for a foreign resident

12-250

20

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

12-255

21

A royalty payment to an overseas person

12-280

22

A royalty payment received for a foreign resident

12-285

22A

A departing Australia superannuation payment

12-305

22AA

An * excess untaxed roll-over amount

12-312

22B

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

12-315

22C

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

12-317

22D

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

12-319A

23

A mining payment

12-320

24

A natural resource payment

12-325

25

A payment by a withholding MIT

12-385

26

A payment by a * custodian or other entity

12-390

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

                    (aa)  a payment that arises because of the operation of section 12A-205 (see Division 12A);

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

                     (b)  non-cash benefits, and capital proceeds involving foreign residents and certain kinds of taxable Australian property (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 or capital proceeds.

Division 11 -- Preliminary matters

Table of sections

11-1          Object of this Part

11-5          Constructive payment

11-1   Object of this Part

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

                     (a)  income tax; and

                     (b)  * Medicare levy; and

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

                   (cb)  amounts of liabilities to the Commonwealth under Chapter 2AA of the Social Security Act 1991 ; and

                    (cc)  amounts of liabilities to the Commonwealth under Part 2 of the Student Assistance Act 1973 ; and

                   (cd)  amounts of liabilities to the Commonwealth under Chapter 3 of the Trade Support Loans Act 2014 ; and

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

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

                     (d)  * withholding tax; and

                     (e)  * mining withholding tax; and

                      (f)  * TFN withholding tax; and

                     (h)  * petroleum resource rent tax.

11-5   Constructive payment

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

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

Division 12 -- Payments from which amounts must be withheld

Table of Subdivisions

12-A     General rules

12-B      Payments for work and services

12-C      Payments for retirement or because of termination of employment

12-D     Benefit and compensation payments

12-E      Payments where TFN or ABN not quoted

12-F      Dividend, interest and royalty payments

12-FA   Departing Australia superannuation payments

12-FAA Excess untaxed roll-over amount

12-FB    Payments to foreign residents etc.

12-FC    Seasonal Labour Mobility Program

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

12-H     Distributions of withholding MIT income

Subdivision 12 - A -- General rules

Table of sections

12-1          General exceptions

12-5          What to do if more than one provision requires a withholding

12-7          Division does not apply to alienated personal services payments

12-10        Division does not apply to non-cash benefits

12-20        Application of Division and regulations to non-share dividends

12-1   General exceptions

Exempt income of recipient

             (1)  An entity need not withhold an amount under section 12-35, 12-40, 12-45, 12-47, 12-50, 12-55, 12-60, 12-80, 12-85, 12-90, 12-120 or 12-190 from a payment if the whole of the payment is * exempt income of the entity receiving the payment.

Non-assessable non-exempt income of recipient

          (1A)  An entity need not withhold an amount under Subdivision 12-B, Subdivision 12-C or section 12-120 or 12-190 from a payment if the whole of the payment is not assessable income and is not * exempt income of the entity receiving the payment.

Living-away-from-home allowance benefit

             (2)  In working out how much to withhold under section 12-35, 12-40, 12-45, 12-47, 12-115, 12-120, 12-315 or 12-317 from a payment, disregard so much of the payment as is a living-away-from-home allowance benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986 .

Expense payment benefit

             (3)  In working out how much to withhold under section 12-35, 12-40, 12-45, 12-47, 12-115, 12-120, 12-315 or 12-317 from a payment, disregard so much of the payment as:

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

                     (b)  is not an exempt benefit under section 22 of that Act (about reimbursement of car expenses on the basis of distance travelled).

Capped defined benefit income stream

             (4)  This section does not apply in relation to a payment if the whole of the payment is a * superannuation income stream benefit that is paid from a * capped defined benefit income stream.

Note:          For withholding amounts from a superannuation income stream, see section 12-80.

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 * withholding MITs

each other withholding provision

1

section 12-35, 12-40, 12-45, 12-47 or 12-50

a payment for work or services

section 12-60 (payment under a labour hire arrangement or specified by regulations); or

section 12-190 (payment for a supply where recipient does not quote its ABN)

1A

section 12-35 or 12-45

a payment for work or services

section 12-47 (a payment to a * religious practitioner)

2

section 12-80, 12-85 or 12-90

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

section 12-60 (payment under a labour hire arrangement or specified by regulations); or

section 12-190 (payment for a supply where recipient does not quote its ABN)

3

section 12-110, 12-115 or 12-120

a payment of benefit or compensation

section 12-60 (payment under a labour hire arrangement or specified by regulations); or

section 12-190 (payment for a supply where recipient does not quote its ABN)

4

section 12-60

a payment under a labour hire arrangement or specified by regulations

section 12-190 (payment for a supply where recipient does not quote its ABN)

5

section 12-140 or 12-145

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

section 12-175 or 12-180 (Payment of income of closely held trust where TFN not quoted) or section 12-210, 12-215, 12-245, 12-250 or 12-255 (payment of a dividend or interest)

6

section 12-280 or 12-285

a payment of royalty

section 12-325 (natural resource payment)

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

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

*          Section 12-55 (about voluntary agreements) covers a payment only if no other provision requires the payer to withhold an amount from the payment.

12-7   Division does not apply to alienated personal services payments

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

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

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

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

             (2)  The provisions are:

                     (a)  Subdivision 12-FB; and

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

12-10   Division does not apply to non-cash benefits

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

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

12-20   Application of Division and regulations to non-share dividends

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

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

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

                     (c)  apply to a non-share dividend in the same way as it applies to a dividend.

Subdivision 12 - B -- Payments for work and services

Table of sections

12-35        Payment to employee

12-40        Payment to company director

12-45        Payment to office holder

12-47        Payment to religious practitioners

12-50        Return to work payment

12-55        Voluntary agreement to withhold

12-60        Payment under labour hire arrangement, or specified by regulations

12-35   Payment to employee

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

For exceptions, see section 12-1.

12-40   Payment to company director

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

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

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

For exceptions, see section 12-1.

12-45   Payment to office holder

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

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

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

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

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

                     (e)  a member of a * local governing body where there is in effect, in accordance with section 446-5, a unanimous resolution by the body that the remuneration of members of the body be subject to withholding under this Part.

For exceptions, see section 12-1.

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

12-47   Payment to religious practitioners

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

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

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

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

12-50   Return to work payment

                   An entity must withhold an amount from a payment it makes to an individual if the payment is included in the individual's assessable income under section 15-3 of the Income Tax Assessment Act 1997 (return to work payments).

For exceptions, see section 12-1.

12-55   Voluntary agreement to withhold

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

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

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

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

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

For exceptions, see section 12-1.

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

Penalty:  30 penalty units.

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

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

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

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

12-60   Payment under labour hire arrangement, or specified by regulations

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

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

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

For exceptions, see section 12-1.

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

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

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

For exceptions, see section 12-1.

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

12-80   Superannuation income streams and annuities

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

                     (a)  a * superannuation income stream;

                     (b)  an * annuity.

For exceptions, see section 12-1.

12-85   Superannuation lump sums and payments for termination of employment

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

                     (a)  a * superannuation lump sum;

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

For exceptions, see section 12-1.

12-90   Unused leave payments

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

                     (a)  an * unused annual leave payment;

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

For exceptions, see section 12-1.

Subdivision 12 - D -- Benefit and compensation payments

Table of sections

12-110      Social Security or other benefit payment

12-115      Commonwealth education or training payment

12-120      Compensation, sickness or accident payment

12-110   Social Security or other benefit payment

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

                     (a)  specified in an item of the table in section 52-10 of the Income Tax Assessment Act 1997 (Social Security payments); or

                     (b)  specified in an item of the table in section 52-65 of that Act (Veterans' Affairs payments); or

                   (ba)  specified in an item of the table in section 52-114 of that Act (Military Rehabilitation and Compensation Act payments); or

                     (c)  specified in section 52-105, 53-10, 55-5 or 55-10 of that Act; or

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

                    (ca)  * parental leave pay; or

                   (cb)  * dad and partner pay; or

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

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

12-115   Commonwealth education or training payment

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

For exceptions, see subsection (2) and section 12-1.

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

12-120   Compensation, sickness or accident payment

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

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

                     (b)  is calculated at a periodical rate; and

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

For exceptions, see section 12-1.

Subdivision 12 - E -- Payments where TFN or ABN not quoted

Table of sections

Payment in respect of investment

12-140      Recipient does not quote tax file number

12-145      Investor becoming presently entitled to income of a unit trust

12-150      Limited application of section 12-140 to payment under financial arrangement

12-155      When investor may quote ABN as alternative

12-160      Investment body unaware that exemption from quoting TFN has stopped applying

12-165      Exception for fully franked dividend

12-170      Exception for payments below thresholds set by regulations

Payment of income of closely held trust where TFN not quoted

12-175      Trustee distributes income of closely held trust

12-180      Beneficiary becomes presently entitled to income of closely held trust

12-185       Exception for payments below thresholds set by regulations

Payment for a supply

12-190      Recipient does not quote ABN

Payment in respect of investme n t

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 quot e d

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 supp l y

12-190   Recipient does not quote ABN

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

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

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

ABN correctly quoted

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

No need to quote ABN

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

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

                     (b)  the payment (disregarding so much of it as relates to * GST payable on the * supply) or, if the payer has also made, or proposes to make, one or more other payments to the other entity for the supply, the total of all the payments (disregarding so much of them as relates to * GST payable on the supply) does not exceed $50 or such higher amount as is specified in regulations in force for the purposes of subsection 29-80(1) of the * GST Act; or

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

                     (d)  the supply is wholly * input taxed.

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

                     (a)  is covered by section 12-140 or 12-145 (about not quoting * tax file number in respect of an investment in respect of which the payment is made); or

                     (b)  would be covered by section 12-140 or 12-145 if the other entity had not quoted as mentioned in subsection 12-140(1) or section 12-155; or

                     (c)  would be covered by section 12-140 or 12-145 apart from section 12-160, 12-165 or 12-170 (which are exceptions to sections 12-140 and 12-145); or

                     (d)  is covered by section 12-175 or 12-180 (Payment of income of closely held trust where TFN not quoted); or

                     (e)  would be covered by section 12-175 or 12-180 if the other entity had not quoted as mentioned in paragraph 12-175(2)(a) or 12-180(2)(a); or

                      (f)  would be covered by section 12-175 or 12-180 apart from section 12-185 (which is an exception to sections 12-175 and 12-180).

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

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

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

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

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

             (7)  In working out, for the purposes of this section, whether an enterprise is * carried on in Australia, ignore any part of Australia that is not in the indirect tax zone (within the meaning of the * GST Act).

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

Subdivision 12 - F -- Dividend, interest and royalty payments

Table of sections

Dividends

12-210      Dividend payment to overseas person

12-215      Dividend payment received for foreign resident

12-220      Application to part of a dividend

12-225      Application to distribution by a liquidator or other person

Interest

12-245      Interest payment to overseas person

12-250      Interest payment received for foreign resident

12-255      Interest payment derived by lender in carrying on business through overseas permanent establishment

12-255      Interest payment derived by lender in carrying on business through overseas permanent establishment

12-260      Lender to notify borrower if interest derived through overseas permanent establishment

Royalties

12-280      Royalty payment to overseas person

12-285      Royalty payment received for foreign resident

General

12-300      Limits on amount withheld under this Subdivision

Dividen d s

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.

Intere s t

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.

Royalti e s

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.

Gener a l

12-300   Limits on amount withheld under this Subdivision

                   This Subdivision does not require an entity:

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

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

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

Subdivision 12 - FA -- Departing Australia superannuation payments

Table of sections

12-305      Departing Australia superannuation payment

12-310      Limits on amount withheld under this Subdivision

12-305   Departing Australia superannuation payment

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

12-310   Limits on amount withheld under this Subdivision

                   This Subdivision does not require an entity:

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

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

Note:          Section 301-175 of the Income Tax Assessment Act 1997 deals with the withholding tax liability.

Subdivision 12-FAA -- Excess untaxed roll-over amount

Table of sections

12-312      Untaxed roll-over superannuation benefits

12-313      Limits on amount withheld under this Subdivision

12-312   Untaxed roll-over superannuation benefits

                   An entity must withhold an amount from an * excess untaxed roll-over amount it pays to an entity.

Note:          An excess untaxed roll-over amount is an amount that may form part of a roll-over superannuation benefit that includes an element untaxed in the fund: see section 306-15 of the Income Tax Assessment Act 1997 .

12-313   Limits on amount withheld under this Subdivision

                   This Subdivision does not require an entity:

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

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

Note:          Section 306-15 of the Income Tax Assessment Act 1997 deals with liability to this form of withholding tax.

Subdivision 12-FB -- Payments to foreign residents etc.

Table of sections

12-315      Payment to foreign resident etc.

12-317      Payment received for foreign resident etc.

12-319      Exemptions from withholding obligations under this Subdivision

12-315   Payment to foreign resident etc.

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

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

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

                     (c)  the payment is not:

                              (i)  a * dividend of a company; or

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

                            (iii)  a * royalty; or

                            (iv)  a * departing Australia superannuation payment; or

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

                            (vi)  a * mining payment; or

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

                     (d)  the entity receiving the payment is not covered by an exemption in force under subsection 12-319(1), or at least one of the entities receiving the payment is not covered by an exemption in force under that subsection.

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

                     (a)  the entity is a foreign resident;

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

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

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

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

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

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

12-317   Payment received for foreign resident etc.

             (1)  An entity (the intermediary ) that receives a payment meeting the requirements set out in paragraphs 12-315(1)(b) and (c) must withhold an amount from the payment if:

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

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

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

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

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

                     (d)  the likely foreign recipient is not covered by an exemption in force under subsection 12-319(1).

             (2)  The intermediary must withhold the amount:

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

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

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

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

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

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

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

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

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

12-319   Exemptions from withholding obligations under this Subdivision

             (1)  The Commissioner may grant an entity an exemption in writing for the purposes of paragraphs 12-315(1)(d) and 12-317(1)(d) if the Commissioner is satisfied that:

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

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

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

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

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

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

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

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

                             (ii)  the previous 2 income years;

                     (b)  the amount (if any) of the entity's * tax-related liabilities that are currently due and payable;

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

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

                             (ii)  the previous 2 income years.

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

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

Subdivision 12 - FC -- Seasonal Labour Mobility Program

Table of sections

12-319A   Payment to employee

12-319A   Payment to employee

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

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

                     (b)  at a time when:

                              (i)  the employee is a foreign resident; and

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

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

Table of sections

Mining on Aboriginal land

12-320      Mining payment

Natural resources

12-325      Natural resource payment

12-330      Payer must ask Commissioner how much to withhold

12-335      Commissioner may exempt from section 12-330, subject to conditions

Mining on Aboriginal la n d

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 resourc e s

12-325   Natural resource payment

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

             (2)  The amount to be withheld is:

                     (a)  the amount notified by the Commissioner under section 12-330; or

                     (b)  the amount worked out under a certificate in force under section 12-335 that covers the payment;

as appropriate.

Exception

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

                     (a)  the Commissioner has notified the entity under section 12-330 that the entity does not need to withhold an amount from the payment; or

                     (b)  a certificate in force under section 12-335 covers the payment and does not require the entity to withhold an amount from it.

12-330   Payer must ask Commissioner how much to withhold

             (1)  An entity must not intentionally make a payment from which section 12-325 requires it to withhold an amount, unless:

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

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

or the payment is covered by a certificate in force under section 12-335.

Penalty:  20 penalty units.

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

Failure to notify not an offence against section 8C

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

12-335   Commissioner may exempt from section 12-330, subject to conditions

             (1)  The Commissioner may give an entity a written certificate exempting the entity from complying with section 12-330 for specified payments.

             (2)  A certificate is subject to:

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

                     (b)  such other conditions as the certificate specifies.

However, the entity does not contravene subsection 12-330(1) because it contravenes a condition.

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

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

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

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

Subdivision 12-H -- Distributions of withholding MIT income

Guide to Subdivision 12 - H

12-375   What this Subdivision is about

A withholding MIT 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 withholding MIT 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

12-383      Meaning of withholding MIT

12-385      Withholding by withholding MITs

12-390      Withholding by custodians and other entities

12-395      Requirement to give notice or make information available

12-405      Meaning of fund payment --general case

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 provisio n s

12-383   Meaning of withholding MIT

                   A trust is a withholding MIT in relation to an income year if:

                     (a)  it is a * managed investment trust in relation to that income year because of paragraph 275-10(1)(a) or (2)(b) of the Income Tax Assessment Act 1997 ; and

                     (b)  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.

12-385   Withholding by withholding MITs

             (1)  A trustee of a trust that is a * withholding MIT 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 * withholding MIT 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 withholding MIT, or 2 or more fund payments made by one or more withholding MITs. One or more of those withholding MITs may be AMITs.

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 * withholding MIT 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 1:       The covered part referred to in paragraph (4)(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. One or more of those managed investment trusts may be AMITs.

Note 2:       If the recipient is not a foreign resident, the entity is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12-395.

             (5)  The amount the entity must withhold is:

             (6)  The rate is:

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

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

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

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

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

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

                     (b)  otherwise--30%.

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

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

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

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

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

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

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

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

Meaning of custodian

             (9)  An entity is a custodian if:

                     (a)  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; or

                     (b)  the entity is acting on behalf of an entity that is carrying on such a business pursuant to such a 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

Withholding MITs and custodians

             (1)  An entity that is a * withholding MIT 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 * withholding MIT 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 * withholding MIT 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 * withholding MIT 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.

12-405   Meaning of fund payment --general case

             (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.

          (1A)  This section applies to a trust that is not an * AMIT for an income year.

Note:          For the definition of fund payment in respect of a trust that is an AMIT for an income year, see section 12A-110.

             (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 * withholding MIT 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 12A -- Distributions by AMITs (including deemed payments)

Table of Subdivisions

             Guide to Division 12A

12A-A   Distributions by AMITs relating to dividend, interest and royalties

12A-B   Distributions by AMITs relating to Subdivision 12-H fund payments

12A-C   Deemed payments by AMITs etc.

Guide to Division 12A

12A-1   What this Division is about

When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member.

The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments.

Withholding liabilities under Subdivisions 12-F and 12-H do not apply in relation to deemed payments (although analogous liabilities may arise under Subdivision 12A-C).

AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.

Subdivision 12A-A -- Distributions by AMITs relating to dividend, interest and royalties

Guide to Subdivision 12A-A

12A-5   What this Subdivision is about

Withholding liabilities under Subdivision 12-F do not apply in relation to deemed payments arising under Subdivision 12A-C relating to dividends, interest or royalties (although analogous liabilities may arise under Subdivision 12A-C).

AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.

Table of sections

Operative provisions

12A-10     Deemed payments--no obligation to withhold under Subdivision 12-F (dividend, interest and royalty payments)

12A-15     Dividend, interest or royalty payments relating to AMIT--requirement to give notice or make information available

12A-20     Failure to give notice or make information available under section 12A-15: administrative penalty

12A-25     Meaning of AMIT DIR payment

12A-30     Meaning of AMIT dividend payment

12A-35     Meaning of AMIT interest payment

12A-40     Meaning of AMIT royalty payment

Operative provisions

12A-10   Deemed payments--no obligation to withhold under Subdivision 12-F (dividend, interest and royalty payments)

             (1)  If the entity that receives a payment as mentioned in subsection 12-215(1), 12-250(1) or 12-285(1) is the trustee of an * AMIT, the entity need not withhold an amount under that subsection from the payment if the payment arises because of the operation of section 12A-205 (deemed payments).

Note:          The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A-C).

             (2)  Subsection (3) applies if:

                     (a)  the entity that receives a payment as mentioned in subsection 12-215(1), 12-250(1) or 12-285(1) is a * custodian; and

                     (b)  it received the payment from an * AMIT.

             (3)  The entity need not withhold an amount under that subsection from the payment mentioned in that subsection if:

                     (a)  the payment arises because of the operation of section 12A-205 (deemed payments); or

                     (b)  the payment is a * post-AMMA actual payment in respect of a payment that so arises.

Note:          Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A-C).

             (4)  Disregard this section for the purposes of section 12A-15.

12A-15   Dividend, interest or royalty payments relating to AMIT--requirement to give notice or make information available

AMITs and custodians

             (1)  An entity that is an * AMIT 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 Subdivision 12-F if:

                              (i)  the entity were a company; and

                             (ii)  the payment had been made to a foreign resident; and

                            (iii)  the condition in either or both of paragraphs 12-210(a) or (b), of paragraphs 12-245(a) or (b) or of paragraphs 12-280(a) or (b) (as the case requires) were satisfied; and

                     (b)  an amount is not required to be withheld from the payment because:

                              (i)  the recipient is not a foreign resident; or

                             (ii)  the recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936 ) of the recipient in Australia, and the payment is attributable to the permanent establishment; and

                     (c)  the payment is any of the following:

                              (i)  a payment that arises because of the operation of section 12A-205 (deemed payments);

                             (ii)  a * pre-AMMA actual payment in respect of a payment that so arises.

             (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

                     (b)  must specify the income year of the * AMIT 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 12A-20.

Other entities

             (4)  An entity that is not an * AMIT or a * custodian must comply with subsection (5) if:

                     (a)  the entity receives a payment; and

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

                              (i)  to receive from the entity; or

                             (ii)  to have the entity credit to the subsequent recipient, or otherwise deal with on the subsequent recipient's behalf or as the subsequent 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 12-215(1), 12-250(1) or 12-285(1) if the subsequent recipient had been a foreign resident; and

                     (d)  an amount is not required to be withheld from the payment because:

                              (i)  the subsequent recipient is not a foreign resident; or

                             (ii)  the subsequent recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936 ) of the subsequent recipient in Australia, and the payment is attributable to the permanent establishment; and

                     (e)  the payment is any of the following:

                              (i)  a payment that arises because of the operation of section 12A-205 (deemed payments);

                             (ii)  a * pre-AMMA actual payment in respect of a payment that so arises.

             (5)  The entity must:

                     (a)  give to the subsequent 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 subsequent 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 subsequent recipient, or is dealt with on the subsequent recipient's behalf or as the subsequent 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

                     (b)  must specify the income year of the * AMIT 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 12A-20.

12A-20   Failure to give notice or make information available under section 12A-15: administrative penalty

                   An entity that:

                     (a)  is required to give a notice, or make details available on a website, under section 12A-15 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 section 12-300) 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.

12A-25   Meaning of AMIT DIR payment

                   An AMIT DIR payment means any of the following:

                     (a)  an * AMIT dividend payment;

                     (b)  an * AMIT interest payment;

                     (c)  an * AMIT royalty payment.

12A-30   Meaning of AMIT dividend payment

             (1)  This section applies to a trust that is an * AMIT for an income year.

             (2)  The object of this section is to ensure that the total of the * AMIT dividend payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).

             (3)  The amount is the total of the * determined member components for the * AMIT for the income year of the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F.

             (4)  A payment (the actual or deemed payment ) that the trustee of a trust makes in relation to an income year is an AMIT dividend payment in relation to that year. However, the amount of the AMIT dividend payment is worked out under the following method statement, and may be:

                     (a)   the amount of the actual or deemed payment; or

                     (b)  the amount of the actual or deemed payment, increased or reduced as a result of the method statement.

Note:          The payment by the trustee may be an actual payment, or a deemed payment under section 12A-205.

Method statement

Step 1.   Work out what it is reasonable to expect will be the amount mentioned in subsection (3).

Step 2.   The AMIT dividend payment is so much of the step 1 amount as is reasonable having regard to:

               (a)     the object of this section; and

              (b)     the amounts of any earlier AMIT dividend payments made by the trustee in relation to the income year; and

               (c)     the expected amounts of any later AMIT dividend payments the trustee expects to make in relation to the income year.

             (5)  The amount mentioned in subsection (3) and the expected amounts of any later * AMIT dividend payments are to be worked out on the basis of the trustee's knowledge when the payment is made.

             (6)  Subsection (5) does not apply if the payment is a payment arising because of the operation of section 12A-205 (deemed payments).

             (7)  However, the payment is not an AMIT dividend payment in relation to the income year if:

                     (a)  the payment is a * post-AMMA actual payment in respect of another payment; and

                     (b)  the other payment arises because of the operation of section 12A-205; and

                     (c)  the other payment is an AMIT dividend payment .

12A-35   Meaning of AMIT interest payment

             (1)  This section applies to a trust that is an * AMIT for an income year.

             (2)  The object of this section is to ensure that the total of the * AMIT interest payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).

             (3)  The amount is the total of the * determined member components for the * AMIT for the income year of the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F.

             (4)  To work out the amount of an AMIT interest payment , apply subsections 12A-30(4), (5), (6) and (7). For this purpose:

                     (a)  treat references in those subsections to AMIT dividend payments as instead being references to AMIT interest payments; and

                     (b)  treat the reference in subsection 12A-30(4) to "the amount mentioned in subsection (3)" as instead being a reference to "the amount mentioned in subsection 12A-35(3)".

12A-40   Meaning of AMIT royalty payment

             (1)  This section applies to a trust that is an * AMIT for an income year.

             (2)  The object of this section is to ensure that the total of the * AMIT royalty payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).

             (3)  The amount is the total of the * determined member components for the * AMIT for the income year of the character of a * royalty that is subject to a requirement to withhold under Subdivision 12-F.

             (4)  To work out the amount of an AMIT royalty payment , apply subsections 12A-30(4), (5), (6) and (7). For this purpose:

                     (a)  treat references in those subsections to AMIT dividend payments as instead being references to AMIT royalty payments; and

                     (b)  treat the reference in subsection 12A-30(4) to "the amount mentioned in subsection (3)" as instead being a reference to "the amount mentioned in subsection 12A-40(3)".

Subdivision 12A-B -- Distributions by AMITs relating to Subdivision 12-H fund payments

Guide to Subdivision 12A-B

12A-100   What this Subdivision is about

Withholding liabilities under Subdivision 12-H do not apply in relation to deemed payments arising under Subdivision 12A-C analogous to fund payments under Subdivision 12-H (although analogous liabilities may arise under Subdivision 12A-C).

AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.

Table of sections

Operative provisions

12A-105   Deemed payments--no obligation to withhold under Subdivision 12-H

12A-110   Meaning of fund payment --AMITs

Operative provisions

12A-105   Deemed payments--no obligation to withhold under Subdivision 12-H

             (1)  The trustee mentioned in subsection 12-385(1) need not withhold an amount under that subsection from the payment mentioned in that subsection if the payment arises because of the operation of section 12A-205 (deemed payments).

Note:          The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A-C).

             (2)  The * custodian mentioned in subsection 12-390(1) need not withhold an amount under that subsection from the later payment mentioned in that subsection if:

                     (a)  the later payment arises because of the operation of section 12A-205 (deemed payments); or

                     (b)  the later payment is a * post-AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a).

Note:          Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A-C).

             (3)  The entity mentioned in subsection 12-390(4) need not withhold an amount under that subsection from the payment mentioned in that subsection if:

                     (a)  the payment arises because of the operation of section 12A-205 (deemed payments); or

                     (b)  the payment is a * post-AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a).

Note:          The entity may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A-C).

             (4)  Disregard this section for the purposes of section 12-395.

12A-110   Meaning of fund payment --AMITs

             (1)  This section applies to a trust that is an * AMIT for an income year.

             (2)  The object of this section is to ensure that the total of the * fund payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).

             (3)  The amount is the sum of the following amounts:

                     (a)  total of the * determined member components for the * AMIT for the income year of a character relating to assessable income, disregarding determined member components (the excluded components ) of any of the following characters:

                              (i)  the character of a * discount capital gain from a * CGT asset that is not * taxable Australian property;

                             (ii)  the character of a * capital gain (other than a discount capital gain) from a CGT asset that is not taxable Australian property;

                            (iii)  the character of 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;

                            (iv)  the character of interest (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;

                             (v)  the character of a * royalty that is subject to, or exempted from, a requirement to withhold under Subdivision 12-F;

                            (vi)  the character of * ordinary income, or * statutory income, from a source other than an * Australian source;

                           (vii)  if a legislative instrument under subsection (4) specifies a character--that character;

                     (b)  the total of each * capital loss of the AMIT from a * CGT event that happened in the income year to a CGT asset that is not taxable Australian property.

             (4)  The Commissioner may, by legislative instrument, specify one or more characters for the purposes of subparagraph (3)(a)(vii).

             (5)  A payment (the actual or deemed payment ) that the trustee of a trust makes in relation to an income year is a fund payment in relation to that year. However, the amount of the fund payment is worked out under the following method statement, and may be:

                     (a)   the amount of the actual or deemed payment; or

                     (b)  the amount of the actual or deemed payment, increased or reduced as a result of the method statement.

Note:          The payment by the trustee may be an actual payment, or a deemed payment under section 12A-205.

Method statement

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

Step 2.   Work out what it is reasonable to expect will be the amount mentioned in subsection (3).

              Do so 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.

             (6)  The amount mentioned in subsection (3) and the expected amounts of any later * fund payments are to be worked out on the basis of the trustee's knowledge when the payment is made.

             (7)  Subsection (6) does not apply if the payment is a payment arising because of the operation of section 12A-205 (deemed payments).

             (8)  However, the payment is not a fund payment in relation to the income year if:

                     (a)  the payment (the actual payment ) is a * post-AMMA actual payment in respect of another payment; and

                     (b)  the other payment arises because of the operation of section 12A-205; and

                     (c)  the other payment is a fund payment.

             (9)  An amount is also 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 years) allowed by the Commissioner.

           (10)  The Commissioner may allow a longer period as mentioned in paragraph (9)(c) only if the Commissioner is of the opinion that:

                     (a)  if the other payment arises at a time because of the operation of section 12A-205 (deemed payments)--the * AMIT complied with subsection 276-455(1) of the Income Tax Assessment Act 1997 in respect of the income year (requirement to give AMMA statements within 3 months); or

                     (b)  otherwise--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.

Subdivision 12A-C -- Deemed payments by AMITs etc.

Guide to Subdivision 12A-C

12A-200   What this Subdivision is about

When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member.

The payment is generally the sum of the determined member components reflected in the statement that are of a character relating to assessable income, reduced by any previous actual payments related to those components.

The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments.

Table of sections

Operative provisions

12A-205   Issue of AMMA statement etc. deemed to be payment

12A-210   Post-AMMA actual payment and pre-AMMA actual payment in respect of deemed payment

12A-215   AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc.

12A-220   Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc.

Operative provisions

12A-205   Issue of AMMA statement etc. deemed to be payment

             (1)  This section applies if:

                     (a)  an entity (the first recipient ) is or was a * member of a * withholding MIT in respect of an income year; and

                     (b)  the withholding MIT is an * AMIT for the income year; and

                     (c)  the AMIT gives the first recipient an * AMMA statement for the income year.

             (2)  For the purposes of this Part, Subdivision 840-M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936 :

                     (a)  treat the trustee of the * AMIT as having made a payment (the first deemed payment ) of an amount to the first recipient at the time the AMIT gave the first recipient the * AMMA statement; and

                     (b)  treat the amount of the first deemed payment as being the amount worked out as follows:

                              (i)  first, work out the total of all the * determined member components of all the * members of the AMIT of a character relating to assessable income for the income year;

                             (ii)  next, identify each of the * pre-AMMA actual payments (if any) made to those members in respect of all payments by the trustee to those members that arise from the operation of paragraph (a);

                            (iii)  next, identify every * AMIT DIR payment (if any) and each * fund payment (if any) that arises from each such pre-AMMA actual payment;

                            (iv)  next, reduce the result of subparagraph (i) by the sum of each such AMIT DIR payment and fund payment;

                             (v)  next, work out how much of the result of subparagraph (iv) is referable to the first recipient.

             (3)  Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936 , treat the first recipient as having derived the first deemed payment just before the end of the income year to which the * AMMA statement relates.

             (4)  Subsection (5) applies if:

                     (a)  the first recipient is a * custodian; and

                     (b)  another entity (the subsequent recipient ):

                              (i)  starts to have, at a time, an entitlement to an amount that is reasonably attributable to all or part of the first deemed payment; or

                             (ii)  would start to have, at a time, such an entitlement if the first deemed payment were an actual payment of an amount.

             (5)  For the purposes of this Part, Subdivision 840-M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936 :

                     (a)  treat the first recipient as having made a payment (the subsequent deemed payment ) of an amount to the subsequent recipient at that time; and

                     (b)  treat the amount of the subsequent deemed payment as being the amount of the entitlement mentioned in subparagraph (4)(b)(i) or (ii); and

                     (c)  treat the amount of the subsequent deemed payment as being attributable to the first deemed payment.

             (6)  Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936 , treat the subsequent recipient as having derived the subsequent deemed payment at the time the subsequent deemed payment arises.

             (7)  If:

                     (a)  an entity is a subsequent recipient mentioned in subsection (4) (including as a result of a previous operation of this subsection); and

                     (b)  subsection (5) applies with the result that a payment is treated as having been made to the entity; and

                     (c)  the entity is a * custodian;

apply subsections (4), (5) and (6) again as if the entity were the first recipient mentioned in subsection (4).

Note:          This means that the entity is treated under subsection (5) as having made a payment to another entity if the other entity has (or would have) an entitlement as mentioned in paragraph (4)(b).

12A-210   Post-AMMA actual payment and pre-AMMA actual payment in respect of deemed payment

             (1)  A payment that does not arise because of the operation of section 12A-205 is a post-AMMA actual payment in respect of a payment (the deemed payment ) that does arise because of the operation of that section if:

                     (a)  the payment and the deemed payment are both attributable to the same * member component for the * AMIT mentioned in that section; and

                     (b)  the actual payment is made at or after the time the deemed payment arises.

             (2)  A payment that does not arise because of the operation of section 12A-205 is a pre-AMMA actual payment in respect of a payment (the deemed payment ) that does arise because of the operation of that section if:

                     (a)  the payment and the deemed payment are both attributable to the same * member component for the * AMIT mentioned in that section; and

                     (b)  the actual payment is made before the time the deemed payment arises.

12A-215   AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc.

             (1)  A trustee of a trust that is an * AMIT for an income year must pay an amount to the Commissioner if:

                     (a)  the trust is a * withholding MIT in relation to the income year; and

                     (b)  the trustee makes a payment (the deemed payment ) that arises because of the operation of section 12A-205; and

                     (c)  the payment is made to an entity (the recipient ) that is:

                              (i)  if the payment is a * fund payment--an entity covered by section 12-410; or

                             (ii)  if the payment is an * AMIT DIR payment--an entity that is not an Australian resident.

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 subparagraph (c)(i) or (ii), 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 sections 12-395 and 12A-15.

             (2)  The amount that the trustee must pay is equal to the amount that the trustee would, if the assumptions in subsection (3) were made, have had to withhold under:

                     (a)  if the deemed payment is a * fund payment--section 12-385; or

                     (b)  if the deemed payment is an * AMIT DIR payment--section 12-210, 12-245 or 12-280.

             (3)  The assumptions are that:

                     (a)  the deemed payment had not arisen because of the operation of section 12A-205; and

                     (b)  the deemed payment had instead been an actual payment; and

                     (c)  if the deemed payment is an * AMIT DIR payment:

                              (i)  where it corresponds to the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F--the trust had been a company, and it had paid it as a dividend; or

                             (ii)  where it corresponds to the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F--it were the payment of interest; or

                            (iii)  where it corresponds to the character of a * royalty that is subject to a requirement to withhold under Subdivision 12-F--it were the payment of a royalty; and

                     (d)  if the deemed payment is an AMIT DIR payment--the condition in either or both of paragraphs 12-210(a) or (b), of paragraphs 12-245(a) or (b) or of paragraphs 12-280(a) or (b) (as the case requires) were satisfied.

             (4)  The trustee may recover from the recipient as a debt an amount that the trustee has paid to the Commissioner under subsection (1).

             (5)  The trustee is entitled to set off an amount that the trustee can recover from the recipient under subsection (4) against debts due by the trustee to the recipient.

12A-220  Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc.

             (1)  A * custodian must pay an amount to the Commissioner if:

                     (a)  the trustee of a trust that was an * AMIT for an income year and was a * withholding MIT in relation to the income year made a payment (the first deemed payment ) that:

                              (i)  arose because of the operation of section 12A-205; and

                             (ii)  was a * fund payment or an * AMIT DIR payment; and

                     (b)  the custodian makes a payment (the subsequent deemed payment ) that arises because of the operation of section 12A-205; and

                     (c)  the first deemed payment gave rise to the subsequent deemed payment, because of one or more operations of section 12A-205; and

                     (d)  the subsequent deemed payment or part of it (the covered part ) was covered by a notice or information under:

                              (i)  if the first deemed payment was a fund payment--section 12-395; or

                             (ii)  if the first deemed payment was an AMIT DIR payment--section 12A-15; and

                     (e)  the subsequent deemed payment is made to an entity (the recipient ) that is:

                              (i)  if the first deemed payment was a fund payment--covered by section 12-410; or

                             (ii)  if the first deemed payment was an AMIT DIR payment-- not an Australian resident.

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 subparagraph (e)(i) or (ii), 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 sections 12-395 and 12A-15.

             (2)  The amount that the * custodian must pay is the amount that the custodian would, if the assumptions in subsection (3) were made, have had to withhold under:

                     (a)  if the first deemed payment was a * fund payment--subsection 12-390(1); or

                     (b)  if the first deemed payment was an * AMIT DIR payment--section 12-210, 12-245 or 12-280.

             (3)  The assumptions are that:

                     (a)  the subsequent deemed payment had not arisen because of the operation of section 12A-205; and

                     (b)  the subsequent deemed payment had instead been an actual payment; and

                     (c)  if the first deemed payment was an * AMIT DIR payment:

                              (i)  where the first deemed payment corresponded to the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F--the * custodian had been a company, and it had paid the subsequent deemed payment as a dividend; or

                             (ii)  where the first deemed payment corresponded to the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12-F--the subsequent deemed payment were the payment of interest; or

                            (iii)  where the first deemed payment corresponded to the character of a * royalty that is subject to a requirement to withhold under Subdivision 12-F--the subsequent deemed payment were the payment of a royalty; and

                     (d)  if the first deemed payment was an AMIT DIR payment--the condition in either or both of paragraphs 12-210(a) or (b), of paragraphs 12-245(a) or (b) or of paragraphs 12-280(a) or (b) (as the case requires) were satisfied.

             (4)  The * custodian may recover from the recipient as a debt an amount that the custodian has paid to the Commissioner under subsection (1).

             (5)  The * custodian is entitled to set off an amount that the custodian can recover from the recipient under subsection (4) against debts due by the custodian to the recipient.

Division 13 -- Alienated personal services payments

Table of sections

13-1          Object of this Division

13-5          Payment to the Commissioner in respect of alienated personal services payments

13-10        Alienated personal services payments

13-15        Personal services payment remitters

13-20        Time for payments to Commissioner for alienated personal services payments made during 2000-01

13-1   Object of this Division

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

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

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

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

13-5   Payment to the Commissioner in respect of alienated personal services payments

Obligation to pay amounts

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

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

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

Working out the amounts

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

Method statement

Step 1.    Identify the payments that the * personal services entity makes to the individual during the period mentioned in paragraph (1)(b) that are * withholding payments covered by section 12-35.

Step 2.    Identify the amounts that:

               (a)     are included in the individual's assessable income under section 86-15 of the Income Tax Assessment Act 1997 ; and

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

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

               (a)     the payments identified in step 1; and

              (b)     the amounts identified in step 2, as if they were payments of salary covered by section 12-35.

Step 4.    Work out the sum of all the amounts withheld under section 12-35 from the payments identified in step 1.

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

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

                   During the period, NewIT paid Ron $3,000 in salary. This is a withholding payment covered by section 12-35 (step 1).

                   $15,000 of the amount NewIT received is included in Ron's assessable income under section 86-15 of the Income Tax Assessment Act 1997 (step 2).

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

                   NewIT withheld $500 from the salary payment of $3,000, as required by section 12-35 (step 4).

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

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

Note:          A different rule applies for alienated personal services payments that large withholders and medium withholders make during the 2000-01 income year. See section 13-20.

             (4)  If:

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

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

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

 

Payments by * deferred BAS payers

Item

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

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

1

30 September

the following 28 October

2

31 December

the following 28 February

3

31 March

the following 28 April

4

30 June

the following 28 July

             (5)  If:

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

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

the entity must pay that amount to the Commissioner:

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

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

13-10   Alienated personal services payments

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

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

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

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

13-15   Personal services payment remitters

General

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

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

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

Businesses not previously receiving personal services income

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

                     (a)  the entity's * ordinary income or * statutory income did not include an individual's * personal services income in any income year preceding that period; and

                     (b)  it is reasonable to expect that, in the income year during which the period occurs, the entity's income will include a person's * personal services income that the entity will not have received in the course of conducting a * personal services business.

             (3)  It is not reasonable to expect that the * personal services entity will receive a person's * personal services income in the course of conducting a * personal services business if it is reasonable to expect that:

                     (a)  the entity will receive at least 80% of that income from the same entity (or one entity and its * associates) ; and

                     (b)  the entity will not meet the results test under section 87-18 of the Income Tax Assessment Act 1997 .

Personal services business determinations taking effect

             (4)  However, a * personal services entity is not a personal services payment remitter for a * PAYG payment period if, during that period or an earlier PAYG payment period in the same income year, a * personal services business determination relating to the entity takes effect.

13-20   Time for payments to Commissioner for alienated personal services payments made during 2000-01

             (1)  Subject to subsection (2), if:

                     (a)  a * personal services entity must, under section 13-5, pay an amount for * alienated personal services payments it received during a particular * PAYG payment period; and

                     (b)  the period ends in a * quarter in the * financial year starting on 1 July 2000;

the payment must be paid to the Commissioner by the end of the 21st day after the end of the quarter.

             (2)  If:

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

                     (b)  the quarter ends on 31st March or 30th June of 2001;

the payment must be paid to the Commissioner by the end of the 28th day after the end of that quarter.

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

Table of sections

14-1          Object of this Subdivision

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

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

14-15        Payer can recover amount paid to the Commissioner

14-50        Object of this Subdivision

14-55        Liability for TFN withholding tax

14-60        Investment body may recover TFN withholding tax from investor

14-65        Application of rules in Division 18

14-75        Overpayment of TFN withholding tax

14-85        Other laws do not exempt from TFN withholding tax

Subdivision 14-A -- Non-cash benefits

14-1   Object of this Subdivision

                   The object of this Subdivision is:

                     (a)  to put entities that provide * non-cash benefits, and entities that receive them, in a position similar to their position under Division 12 if payments of money had been made instead of the non-cash benefits being provided; and

                     (b)  in that way, to prevent entities from avoiding their obligations under Division 12 by providing non-cash benefits.

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

             (1)  An entity (the payer ) must pay an amount to the Commissioner before providing a * non-cash benefit to another entity (the recipient ) if Division 12 would require the payer to withhold an amount (the notionally withheld amount ) if, instead of providing the benefit to the recipient, the payer made a payment to the recipient in money equal to the * market value of the benefit when the benefit is provided.

             (2)  The amount to be paid to the Commissioner is equal to the notionally withheld amount.

Example:    Nick is a building contractor who has entered into a voluntary agreement with Mike for the purposes of section 12-55. Nick proposes to give Mike his old utility van (whose market value is $1,000) as payment for work Mike has done for him over a fortnight.

                   If Nick were instead to pay Mike $1,000, Nick would have had to withhold $203 under Division 12 (in accordance with withholding rates current at the time).

                   This section requires Nick to pay $203 to the Commissioner before giving the van to Mike.

             (3)  This section does not apply to providing:

                     (a)  a * fringe benefit; or

                     (b)  a benefit that is an exempt benefit under the Fringe Benefits Tax Assessment Act 1986 ; or

                     (c)  a benefit that would be an exempt benefit under that Act if paragraphs (d) and (e) of the definition of employer in subsection 136(1) of that Act were omitted; or

                     (d)  a benefit constituted by the acquisition of an * ESS interest * under an employee share scheme to which Subdivision 83A-B or 83A-C of the Income Tax Assessment Act 1997 applies.

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

                   If:

                     (a)  an entity (the payer ) receives in the form of a * non-cash benefit:

                              (i)  a * dividend of a company; or

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

                            (iii)  a * royalty; and

                     (b)  section 12-215, 12-250 or 12-285 would have required the payer to withhold an amount if the dividend, interest or royalty had been a payment in money;

the payer must pay that amount to the Commissioner before providing the benefit (or part of it) to another entity.

14-15   Payer can recover amount paid to the Commissioner

             (1)  The payer may recover from the recipient as a debt an amount that the payer has paid to the Commissioner under section 14-5.

             (2)  If the payer has paid an amount to the Commissioner under section 14-10, the payer may:

                     (a)  if the payer has provided all of the benefit to another entity--recover the amount from that other entity as a debt; or

                     (b)  if the payer has provided a part of the benefit to another entity--recover from that other entity as a debt the corresponding proportion of the amount paid to the Commissioner.

             (3)  If the payer can recover an amount from another entity under this section, the payer is entitled to set the amount off against debts due by the payer to the other entity.

Subdivision 14-B -- Accruing gains

14-50   Object of this Subdivision

                   The object of this Subdivision is to put the parties to a * Part VA investment with an accruing gain in a position similar to what would have been their position under Subdivision 12-E (Payments where TFN or ABN not quoted) if the * investment body had paid the gain in money to the * investor at the end of the income year.

14-55   Liability for TFN withholding tax

             (1)  * TFN withholding tax is payable if:

                     (a)  in relation to a * Part VA investment, an amount (the accrued gain ) is included in the * investor's assessable income for an income year under section 159GQ of the Income Tax Assessment Act 1936 (about gains accruing on securities); and

                     (b)  the investment:

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

                             (ii)  is of a kind mentioned in item 3 of that table and is non-transferable; and

                     (c)  the term of the investment does not end during the income year; and

                     (d)  section 12-140 would have required the * investment body to withhold an amount (the TFN withholding amount ) from a payment of the accrued gain to the investor, if the investment body had made the payment at the end of the income year and section 12-150 had not been enacted.

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

             (2)  The amount of * TFN withholding tax is equal to the TFN withholding amount.

             (3)  The * TFN withholding tax is payable jointly and severally by the * investor and the * investment body.

             (4)  However, if the * investment body is the Commonwealth or an * untaxable Commonwealth entity:

                     (a)  the * TFN withholding tax is payable by the * investor; and

                     (b)  the investor is taken to have authorised the investment body to pay the TFN withholding tax on the investor's behalf.

             (5)  The * TFN withholding tax is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(a).

Note 1:       When it is due and payable, the TFN withholding tax is payable to the Commissioner: see paragraph 255-5(1)(b).

Note 2:       An entity by whom it is payable must pay it to the Commissioner in accordance with Subdivision 16-B: see subsection 16-70(3). If any of it remains unpaid, the entity is liable to pay general interest charge: see section 16-80.

Note 3:       The Commissioner may defer the time at which TFN withholding tax becomes due and payable: see section 255-10.

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

                     (a)  this section; and

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

14-60   Investment body may recover TFN withholding tax from investor

             (1)  The * investment body may recover from the * investor as a debt any of the * TFN withholding tax that it pays.

             (2)  The * investment body is entitled to set off an amount that it can recover from the * investor under this section against:

                     (a)  a debt due by it to the investor; or

                     (b)  an amount that is accruing to the investor, or stands to the investor's credit, in respect of the * Part VA investment, even if the amount is not yet due.

14-65   Application of rules in Division 18

                   These provisions:

                     (a)  subsection 18-15(1) and sections 18-20 and 18-25 (about credits for amounts withheld from withholding payments); and

                     (b)  section 18-80 (about refunds when exemption declaration not given);

apply as if any of the * TFN withholding tax that has been paid were an amount withheld under subsection 12-140(1) from a * withholding payment covered by that subsection and made to the * investor during:

                     (c)  unless the * investor has adopted (under section 18 of the Income Tax Assessment Act 1936 ) an accounting period ending on a day other than 30 June--the income year referred to in paragraph 14-55(1)(a); or

                     (d)  if the investor has adopted such an accounting period--the income year in which the TFN withholding tax is paid.

Note:          Unless the investor has adopted such an accounting period, the credit under section 18-15, 18-20 or 18-25 will be in respect of the income year before the one in which the TFN withholding tax is paid.

14-75   Overpayment of TFN withholding tax

                   If * TFN withholding tax has been overpaid:

                     (a)  the Commissioner must refund the amount overpaid; and

                     (b)  the * investor is not entitled to a credit under section 18-15, 18-20 or 18-25 in respect of the amount overpaid.

14-85   Other laws do not exempt from TFN withholding tax

             (1)  A provision of a law passed before the commencement of this section that purports to exempt an entity from liability to pay * TFN withholding tax, or to pay taxes that include TFN withholding tax, does not exempt that entity from liability to pay TFN withholding tax.

             (2)  A provision of a law passed at or after the commencement of this section that purports to exempt an entity from liability to pay taxes under the laws of the Commonwealth, or to pay certain taxes under those laws that include * TFN withholding tax, is not to be interpreted as exempting the entity from liability to pay TFN withholding tax, unless it specifically mentions TFN withholding tax.

Subdivision 14-C -- Shares and rights under employee share schemes

Table of sections

14-155      Liability for TFN withholding tax (ESS)

14-160      Employer may give individual tax file numbers to provider

14-165      Provider may recover TFN withholding tax (ESS) from individual

14-170      Application of rules in Division 18

14-175      Overpayment of TFN withholding tax (ESS)

14-180      Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

14-155   Liability for TFN withholding tax (ESS)

             (1)  Tax ( TFN withholding tax (ESS) ) imposed by the Income Tax (TFN Withholding Tax (ESS)) Act 2009 is payable if:

                     (a)  a company (the provider ) provides one or more * ESS interests to an individual under an * employee share scheme; and

                     (b)  as a result, an amount is included in the individual's assessable income under Division 83A of the Income Tax Assessment Act 1997 for an income year (taking into account subsection (2) of this section); and

                     (c)  the individual has quoted neither of the following to the provider before the end of the income year:

                              (i)  if the individual acquired the interests in relation to any services provided to the provider, or to a * subsidiary of the provider, in the course or furtherance of an * enterprise * carried on by the individual--the individual's * ABN;

                             (ii)  in any case--the individual's * tax file number.

             (2)  For the purposes of paragraph (1)(b), disregard sections 83A-33 and 83A-35 of the Income Tax Assessment Act 1997 (about reducing the amount included in the individual's assessable income).

Note:          Disregard the 30 day rule in subsections 83A-115(3) and 83A-120(3) of the Income Tax Assessment Act 1997 for the purposes of this Subdivision: see subsection 392-5(6) in this Schedule.

             (3)  The * TFN withholding tax (ESS) is payable by the provider.

             (4)  The * TFN withholding tax (ESS) is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(b).

Note 1:       When it is due and payable, the TFN withholding tax (ESS) is payable to the Commissioner: see paragraph 255-5(1)(b).

Note 2:       The provider must pay the TFN withholding tax (ESS) to the Commissioner in accordance with Subdivision 16-B: see subsection 16-70(4). If any of it remains unpaid, the provider is liable to pay general interest charge: see section 16-80.

Note 3:       The Commissioner may defer the time at which TFN withholding tax (ESS) becomes due and payable: see section 255-10.

14-160   Employer may give individual tax file numbers to provider

             (1)  The individual is taken to have authorised a * subsidiary (the employer ) of the provider to inform the provider of the individual's * tax file number if:

                     (a)  the individual has made a * TFN declaration in relation to the employer; and

                     (b)  some or all of the * ESS interests mentioned in paragraph 14-155(1)(a) were provided to the individual in relation to the individual's employment by the employer.

             (2)  If the employer does so, the individual is taken, for the purposes of this Subdivision and Division 392 (Employee share scheme reporting), to have quoted his or her * tax file number to the provider.

14-165   Provider may recover TFN withholding tax (ESS) from individual

             (1)  The provider may recover from the individual as a debt any of the * TFN withholding tax (ESS) the provider pays.

             (2)  The provider is entitled to set off an amount that the provider can recover from the individual under this section against a debt due by the provider to the individual.

14-170   Application of rules in Division 18

                   These provisions:

                     (a)  subsection 18-15(1) (about credits for amounts withheld from withholding payments); and

                     (b)  sections 18-65 and 18-70 (about refunds of amounts withheld in error);

apply as if any of the * TFN withholding tax (ESS) that has been paid were an amount withheld under section 12-35 from a * withholding payment made to the individual and covered by that section.

14-175   Overpayment of TFN withholding tax (ESS)

                   If * TFN withholding tax (ESS) has been overpaid:

                     (a)  the Commissioner must refund the amount overpaid; and

                     (b)  the individual is not entitled to a credit under section 18-15 in respect of the amount overpaid.

14-180   Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997

                   The following provisions of the Income Tax Assessment Act 1997 have effect for the purposes of this Subdivision in the same way as they have for the purposes of Division 83A of that Act:

                     (a)  section 83A-130 (about takeovers and restructures);

                     (b)  section 83A-305 (about associates);

                     (c)  section 83A-320 (about trusts);

                     (d)  section 83A-325 (about relationships similar to employment);

                     (e)  section 83A-335 (about stapled securities);

                      (f)  section 83A-340 (about indeterminate rights).

Subdivision 14-D -- Capital proceeds involving foreign residents and taxable Australian property

Table of sections

14-200      Certain acquisitions of taxable Australian property from foreign residents

14-205      Effect of look-through earnout rights

14-210      Whether an entity is a relevant foreign resident

14-215      Excluded transactions

14-220      Commissioner clearance certificates

14-225      Entity declarations

14-230      Administrative penalties for false or misleading declarations

14-235      Varying amounts to be paid to the Commissioner

14-200   Certain acquisitions of taxable Australian property from foreign residents

             (1)  You must pay to the Commissioner an amount if:

                     (a)  you become the owner of a * CGT asset as a result of * acquiring it from one or more entities under one or more transactions; and

                     (b)  subsection 14-210(1) (about foreign residents) applies to at least one of those entities at the time one of those transactions is entered into; and

                     (c)  at that time, the CGT asset is:

                              (i)  * taxable Australian real property; or

                             (ii)  an * indirect Australian real property interest; or

                            (iii)  an option or right to acquire such property or such an interest;

unless a transaction referred to in paragraph (a) is excluded under section 14-215.

Note:          You must pay the amount on account of income tax possibly payable by the entities on their capital proceeds resulting from your acquisition of the CGT asset.

             (2)  You must pay the amount to the Commissioner on or before the day you became the * CGT asset's owner.

Note:          There are penalties for failing to pay the amount (see Division 16).

             (3)  The amount to be paid to the Commissioner is:

                     (a)  unless paragraph (b) applies--an amount equal to 12.5% of:

                              (i)  the first element of the * CGT asset's * cost base just after the * acquisition, ignoring paragraphs 112-36(1)(b) and (c) of the Income Tax Assessment Act 1997 (about the effect of look-through earnout rights); less

                             (ii)  if the acquisition is the result of you exercising an option--any payment you made, and the * market value of any property you gave, for the option (or to renew or extend it); or

                     (b)  the varied amount applying under section 14-235.

             (4)  This section does not apply if the amount that would otherwise be payable is nil.

14-205   Effect of look-through earnout rights

Acquisitions of taxable Australian property from foreign residents

             (1)  You must pay to the Commissioner an amount if:

                     (a)  you are required under section 14-200 to pay an amount to the Commissioner in relation to your * acquisition of a * CGT asset; and

                     (b)  under a * look-through earnout right relating to the CGT asset and the acquisition, you provide a * financial benefit to one or more entities; and

                     (c)  subsection 14-210(1) (about foreign residents) would apply to at least one of those entities at the time you provide the financial benefit if section 14-210 were modified as described in subsection (2) of this section; and

                     (d)  an amount is not already required to be withheld from a * withholding payment relating to the financial benefit.

Note 1:       To work out the amount payable, see subsection (4).

Note 2:       You must pay the amount on account of income tax possibly payable by the entities on their increased capital proceeds from receiving the financial benefit.

Modifications of the relevant foreign residents test

             (2)  The modifications of section 14-210 are as follows:

 

Modifications to section 14-210 for the purposes of this section

 

Column 1

Column 2

Item

For a reference in that section to:

substitute a reference to:

1

transaction is entered into

* financial benefit is provided

2

transaction (other than a reference covered by item 1)

* financial benefit

3

14-200

14-205

When you must pay the amount

             (3)  You must pay the amount to the Commissioner on or before the day you provide the * financial benefit.

Note:          There are penalties for failing to pay the amount (see Division 16).

             (4)  The amount to be paid to the Commissioner is:

                     (a)  unless paragraph (b) applies--an amount equal to 12.5% of the * market value of the * financial benefit; or

                     (b)  the varied amount applying under section 14-235.

14-210   Whether an entity is a relevant foreign resident

Is the entity a foreign resident at the time of the transaction?

             (1)  This subsection applies to an entity at the time a transaction is entered into if, at that time:

                     (a)  you know that the entity is a foreign resident; or

                     (b)  you reasonably believe that the entity is a foreign resident; or

                     (c)  you do not reasonably 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 your possession, or is kept or maintained on your behalf, about the transaction); or

                             (ii)  you are authorised to provide a related financial benefit to a place outside Australia (whether to the entity or to anyone else); or

                     (d)  the entity has a connection outside Australia of a kind specified in the regulations; or

                     (e)  the * CGT asset to which the transaction relates is:

                              (i)  * taxable Australian real property; or

                             (ii)  an * indirect Australian real property interest, the holding of which causes a company title interest (within the meaning of Part X of the Income Tax Assessment Act 1936 ) to arise.

Note:          This subsection is relevant to whether you must pay an amount to the Commissioner under section 14-200.

Exception--the entity gives you a clearance certificate

             (2)  Despite subsection (1), that subsection does not apply to the entity in relation to the transaction if:

                     (a)  before you pay the Commissioner under section 14-200 in relation to the * CGT asset to which the transaction relates, the entity gives you a certificate about the entity that:

                              (i)  was issued under subsection 14-220(1); and

                             (ii)  is for a period covering the time the transaction is entered into; and

                     (b)  the CGT asset is of a kind described in paragraph (1)(e) of this section.

Exception--the entity gives you a residency or interests declaration

             (3)  Despite subsection (1), that subsection does not apply to the entity in relation to the transaction if:

                     (a)  before you pay the Commissioner under section 14-200 in relation to the * CGT asset to which the transaction relates, the entity gives you a declaration that:

                              (i)  is about the entity or the CGT asset; and

                             (ii)  was given under subsection 14-225(1) or (2); and

                            (iii)  is for a period covering the time the transaction is entered into; and

                     (b)  when you are given the declaration, you do not know the declaration to be false; and

                     (c)  for a declaration given under subsection 14-225(1)--the CGT asset is not of a kind described in paragraph (1)(e) of this section.

14-215   Excluded transactions

Kinds of excluded transactions

             (1)  A transaction that results in the * acquisition of a * CGT asset is excluded under this section if:

                     (a)  just after the transaction, the CGT asset:

                              (i)  is * taxable Australian real property; or

                             (ii)  is an * indirect Australian real property interest, the holding of which causes a company title interest (within the meaning of Part X of the Income Tax Assessment Act 1936 ) to arise;

                            and the * market value of the CGT asset is less than $750,000; or

                     (b)  the transaction is on an * approved stock exchange; or

                     (c)  the transaction is conducted using a crossing system (within the meaning of the * market integrity rules); or

                     (d)  an amount is already required to be withheld from a * withholding payment relating to the transaction; or

                     (e)  subsection 26BC(3) of the Income Tax Assessment Act 1936 (about securities lending arrangements) applies in relation to the transaction as a result of the transaction being covered by subparagraph (a)(ii) of that subsection; or

                      (f)  any of the entities to which subsection 14-210(1) (about foreign residents) applies at the time of the transaction:

                              (i)  is a company for which any of the conditions in paragraph 161A(1)(a) of the Corporations Act 2001 (about insolvency and external administration) is satisfied; or

                             (ii)  is, under a * foreign law, in the same or a similar position to a company covered by subparagraph (i); or

                     (g)  the transaction arises from any of the following:

                              (i)  the administration of the estate of a bankrupt;

                             (ii)  a composition or scheme of arrangement accepted under Division 6 of Part IV of the Bankruptcy Act 1966 ;

                            (iii)  a debt agreement under Part IX of that Act;

                            (iv)  a personal insolvency agreement under Part X of that Act;

                             (v)  circumstances that are, under a foreign law, the same or similar to those in any of the above subparagraphs.

Note:          This section is relevant to whether you must pay an amount to the Commissioner under section 14-200.

Dealing with joint ownership etc. of certain CGT assets

             (2)  For the purposes of paragraph (1)(a), if:

                     (a)  the * CGT asset is an interest in real property, or an interest in a * mining, quarrying or prospecting right; and

                     (b)  just after the transaction, there are one or more similar interests in the same real property or right;

treat the * market value of the CGT asset just after the transaction as including the market value of each of those similar interests.

             (3)  Without limiting subsection (2):

                     (a)  treat an interest as being similar to the * CGT asset if it is specified in regulations made for the purposes of this paragraph in relation to CGT assets of that kind; and

                     (b)  treat an interest as not being similar to the CGT asset if it is specified in regulations made for the purposes of this paragraph in relation to CGT assets of that kind.

14-220   Commissioner clearance certificates

             (1)  The Commissioner may certify that, based on information before the Commissioner, there is nothing to suggest that an entity is or will be a foreign resident during a specified period.

Note:          Such a certificate could result in you not being required to pay an amount under this Subdivision (see subsection 14-210(2)).

             (2)  A certificate under subsection (1):

                     (a)  may be issued on application to the Commissioner in the * approved form; and

                     (b)  is to be in writing; and

                     (c)  applies only for the purposes of this Subdivision.

             (3)  For the purposes of (but without limiting) paragraph 388-50(1)(c), the Commissioner may require an application for a certificate under subsection (1) to state:

                     (a)  whether the applicant holds or will hold specified * CGT assets on behalf of another entity during any part of the period for which the certificate is sought; and

                     (b)  whether the applicant knows or reasonably believes that the other entity is or will be a foreign resident during that period.

Note:          Section 388-50 sets out when an application is in the approved form.

             (4)  A certificate issued under subsection (1) is not a legislative instrument.

14-225   Entity declarations

Declaration that an entity is an Australian resident

             (1)  An entity may, in writing, declare that, for a specified period, the entity is and will be an Australian resident.

Note:          Such a declaration could result in you not being required to pay an amount under this Subdivision (see subsection 14-210(3)).

Declaration that asset not an indirect Australian real property interest

             (2)  An entity may, in writing, declare that, for a specified period, specified * CGT assets are * membership interests but not * indirect Australian real property interests.

Note:          Such a declaration could result in you not being required to pay an amount under this Subdivision (see subsection 14-210(3)).

Limit on the periods for which declarations have effect

             (3)  A period specified in a declaration under this section is of no effect to the extent that it includes days later than 6 months after the day the declaration is made.

Declarations are not legislative instruments

             (4)  A declaration under this section is not a legislative instrument.

14-230   Administrative penalties for false or misleading declarations

Knowingly making false or misleading declarations

             (1)  You are liable to pay the Commissioner a penalty of 120 penalty units if:

                     (a)  you make a statement; and

                     (b)  the statement is, or purports to be, a declaration under section 14-225; and

                     (c)  the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and

                     (d)  you know, at the time of making the statement, that it is so false or misleading.

Note:          Division 298 contains machinery provisions for administrative penalties.

Recklessly making false or misleading declarations

             (2)  You are liable to pay the Commissioner a penalty of 80 penalty units if:

                     (a)  you make a statement; and

                     (b)  the statement is, or purports to be, a declaration under section 14-225; and

                     (c)  the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and

                     (d)  you were reckless in connection with the making of the statement.

Note:          Division 298 contains machinery provisions for administrative penalties.

Not taking reasonable care in making declarations

             (3)  You are liable to pay the Commissioner a penalty of 40 penalty units if:

                     (a)  you make a statement; and

                     (b)  the statement is, or purports to be, a declaration under section 14-225; and

                     (c)  the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and

                     (d)  you did not take reasonable care in connection with the making of the statement.

Note:          Division 298 contains machinery provisions for administrative penalties.

14-235   Varying amounts to be paid to the Commissioner

Policies relevant to varying amounts

             (1)  In exercising a power under this section to vary an amount, the Commissioner must have regard to the need to protect a creditor's right to recover a debt.

Varying particular amounts

             (2)  The Commissioner may, in writing, vary a particular amount payable by you to the Commissioner under this Subdivision. The variation takes effect when you become aware of it.

Note:          Decisions to vary, or not to vary, are reviewable (see section 20-80).

             (3)  Any of the following entities may apply to the Commissioner in the * approved form for a variation under subsection (2):

                     (a)  you;

                     (b)  an entity from which you * acquire, or could acquire, the * CGT asset;

                     (c)  an entity that is owed a debt by an entity covered by paragraph (b).

             (4)  A variation made under subsection (2) is not a legislative instrument.

Varying classes of amounts

             (5)  The Commissioner may, by legislative instrument, vary classes of amounts payable to the Commissioner under this Subdivision.

Amounts may be reduced to nil

             (6)  The Commissioner's power under subsection (2) or (5) to vary an amount includes the power to reduce the amount to nil.

Division 15 -- Working out the amount to withhold

Table of Subdivisions

             Guide to Division 15

15-A     Working out how much to withhold

15-B      Withholding schedules and regulations

15-C      Declarations

Guide to Division 15

15-1   What this Division is about

This Division is mainly about how to work out how much an entity must withhold under Division 12.

In most cases, the entity will need to use either the Commissioner's withholding schedules or the regulations.

The entity will also need to take into account a TFN declaration or declaration under section 15-50 it has been given because, under the schedules and regulations, the declaration may affect how to calculate the amount to withhold.

This Division also deals with when an individual can make such a declaration (other than a TFN declaration) so as to change the amount that must be withheld from payments to the individual.

Subdivision 15-A -- Working out how much to withhold

Table of sections

15-10        How much to withhold

15-15        Variation of amounts required to be withheld

15-10   How much to withhold

             (1)  The amount that Subdivision 12-B, 12-C or 12-D requires to be withheld from a payment is to be worked out under the withholding schedules made under section 15-25. However, if the regulations prescribe how the amount is to be worked out, then it is to be worked out under the regulations.

Note 1:       A TFN declaration, declaration under section 15-50 or voluntary agreement may affect how much is required to be withheld under the withholding schedules or regulations.

Note 2:       The Commissioner may vary an amount required to be withheld. See section 15-15.

             (2)  The amount that Subdivision 12-E, 12-F, 12-FA, 12-FAA, 12-FB, 12-FC or 12-G (except one covered by section 12-325) requires to be withheld from a payment is to be worked out under the regulations.

Note 1:       The amount that section 12-325 requires to be withheld is worked out under that section.

Note 2:       The Commissioner may vary an amount required to be withheld. See section 15-15.

             (3)  The amount that Subdivision 12-H requires to be withheld from a payment or receipt is worked out under subsection 12-385(2), 12-390(2) or 12-390(5).

15-15   Variation of amounts required to be withheld

             (1)  The Commissioner may, for the purposes of meeting the special circumstances of a particular case or class of cases, vary the * amount required to be withheld by an entity from a * withholding payment (except a withholding payment covered by section 12-140, 12-145, 12-175 or 12-180 or Subdivision 12-FC or 12-H). If the Commissioner does so, the amount is varied accordingly.

Note 1:       Section 12-140 is about a payment arising from an investment where the recipient does not quote its tax file number (or, in some cases, its ABN).

Note 2:       Sections 12-175 and 12-180 are about a payment of the income of a closely held trust to a beneficiary, where the beneficiary does not quote the beneficiary's tax file number.

Note 3:       Section 12-145 is about an investor becoming presently entitled to income of a unit trust.

Note 3A:    Subdivision 12-FC is about the Seasonal Labour Mobility Program.

Note 4:       Subdivision 12-H is about distributions of withholding MIT income.

             (2)  The Commissioner's power to vary an amount includes the power to reduce the amount to nil.

             (3)  A variation must be made by a written notice:

                     (a)  if it applies to a particular entity--that is given to that entity; or

                     (b)  if it applies to a class of entities--that is given to each of the entities, or a copy of which is published in the Gazette .

Subdivision 15-B -- Withholding schedules and regulations

Table of sections

15-25        Commissioner's power to make withholding schedules

15-30        Matters to be considered when making withholding schedules

15-35        Regulations about withholding

15-25   Commissioner's power to make withholding schedules

             (1)  For the purposes of collecting income tax and the other liabilities referred to in paragraphs 11-1(b), (ca), (cb), (cc), (cd), (da) and (db), the Commissioner may make one or more withholding schedules specifying the amounts, formulas and procedures to be used for working out the * amount required to be withheld by an entity:

                     (a)  from a * withholding payment covered by Subdivision 12-B, 12-C or 12-D; or

                     (b)  an * alienated personal services payment to which Division 13 applies.

             (2)  A withholding schedule may deal differently with:

                     (a)  different payments; and

                     (b)  different circumstances of the recipients of those payments; and

                     (c)  different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901 .

             (3)  The Commissioner may withdraw a withholding schedule.

             (4)  A withholding schedule, or the withdrawal of a withholding schedule:

                     (a)  only applies if a notice of it is published in the Gazette ; and

                     (b)  only applies in relation to payments made after the day the notice is published, or after such later day as is specified by the Commissioner in the notice.

             (5)  The Commissioner must make each withholding schedule publicly available.

15-30   Matters to be considered when making withholding schedules

                   The Commissioner must have regard to the following matters when making a withholding schedule:

                     (a)  the rates of income tax as specified in the Income Tax Rates Act 1986 ;

                     (b)  the rates of * Medicare levy as specified in the Medicare Levy Act 1986 ;

                    (ca)  the percentages specified in section 154-20 (about repayments of accumulated HELP debt) of the Higher Education Support Act 2003 for any financial year starting on or after 1 July 2005;

                   (cb)  the percentage referred to in the definition of applicable percentage of HELP repayment income in subsection 1061ZVHA(1) (about repayments of accumulated SSL debt) of the Social Security Act 1991 for any financial year starting after the commencement of this paragraph;

                    (cc)  the percentage referred to in the definition of applicable percentage of HELP repayment income in subsection 10F(1) (about repayments of accumulated ABSTUDY SSL debt) of the Student Assistance Act 1973 for any financial year starting after the commencement of this paragraph;

                   (cd)  the percentage referred to in the definition of applicable percentage of repayment income in subsection 46(1) (about repayments of accumulated TSL debt) of the Trade Support Loans Act 2014 for any financial year starting on or after 1 July 2014;

                   (da)  the percentages specified in section 1061ZZFD (about repayments of accumulated FS debts) of the Social Security Act 1991 for any financial year starting on or after 1 July 2006;

                   (db)  the percentages specified in section 12ZLC (about repayments of accumulated FS debts) of the Student Assistance Act 1973 for any financial year starting on or after 1 July 2006;

                     (d)  any * tax offsets;

                     (e)  the family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999 );

                      (f)  the periods in respect of which * withholding payments are made;

                    (fa)  in relation to withholding payments that are * working holiday taxable income--whether an entity is registered under section 16-147;

                     (g)  any other prescribed matter.

15-35   Regulations about withholding

             (1)  For the purposes of collecting income tax and the other liabilities referred to in section 11-1, the regulations may specify the amounts, formulas and procedures to be used for working out the * amount required to be withheld by an entity from a * withholding payment covered by Division 12 (except one covered by section 12-325).

             (2)  The regulations may deal differently with:

                     (a)  different payments; and

                     (b)  different circumstances of the recipients of those payments; and

                     (c)  different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901 .

Subdivision 15-C -- Declarations

Table of sections

15-50        Declarations

15-50   Declarations

Declarations about matters

             (1)  An individual who:

                     (a)  expects to receive a * withholding payment covered by Subdivision 12-B, 12-C or 12-D, or an * alienated personal services payment to which Division 13 applies, from an entity; and

                     (b)  wishes to have a matter relating to the individual's income tax or other liability referred to in paragraph 11-1(b), (ca), (cb), (cc), (cd), (da) or (db) taken into account by the entity in working out the * amount required to be withheld from the payment;

may give the entity a declaration about the matter in the * approved form.

When declarations under subsection (1) can't be given

             (2)  The individual cannot give a declaration under subsection (1) unless:

                     (a)  a * TFN declaration is in effect between the individual and the entity, or a * voluntary agreement covers the payment; and

                     (b)  if the individual has given another entity a declaration on any matter--that declaration is not in effect.

Declarations changing information given in TFN declaration

             (3)  If:

                     (a)  an individual has given a * TFN declaration to an entity; and

                     (b)  the individual made a statement about a matter in the TFN declaration; and

                     (c)  the individual's circumstances change in relation to the matter;

the individual may give the entity a declaration about the matter in the * approved form.

Regulations

             (4)  The regulations may prescribe:

                     (b)  when a declaration under subsection (1) or (3) starts or ceases to be in effect; and

                     (c)  when a declaration under subsection (1) or (3) is taken to have been given.

             (5)  If:

                     (a)  an individual gives an entity a declaration under subsection (1) or (3) about a matter; and

                     (b)  the individual's circumstances change in relation to the matter;

the regulations may also prescribe when the individual must give the entity a new declaration about the matter.

Division 16 -- Payer's obligations and rights

Table of Subdivisions

             Guide to Division 16

16-A     To withhold

16-B      To pay withheld amounts to the Commissioner

16-BA   To be registered

16-C      To provide information

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

Guide to Division  1 6

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 12A, 13 or 14.

                   Note:             The entity may also have obligations under other legislation. See, for example, the obligation to keep records under section 262A of the Income Tax Assessment Act 1936 .

Subdivision 16-A -- To withhold

Table of sections

When to withhold

16-5          When to withhold an amount

16-7          Treat entity obliged to pay under Subdivision 12A-C as having withheld amount under Division 12

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 withho l d

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.

16-7   Treat entity obliged to pay under Subdivision 12A-C as having withheld amount under Division 12

                   For the purposes of this Division:

                     (a)  if an entity must pay an amount to the Commissioner under Subdivision 12A-C, treat the entity as being obliged to withhold the amount under Division 12; and

                     (b)  if an entity has paid an amount to the Commissioner under Subdivision 12A-C, treat the entity as having withheld the amount under Division 12.

16-20   Payer discharged from liability to recipient for amount withheld

             (1)  An entity that:

                     (a)  withholds an amount as required by Division 12; or

                     (b)  pays to the Commissioner an amount as required by Division 12A, 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.

             (2)  An entity is discharged from all liability to pay so much of the total amount payable to * acquire a * CGT asset as is equal to any amount the entity pays to the Commissioner under Subdivision 14-D in relation to the acquisition.

Penalties for not withholdi n g

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 12A, 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 12A, 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 12A, 13 or 14;

is liable to pay to the Commissioner a penalty equal to that amount.

Note 1:       An entity may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner's determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).

Note 2:       Division 298 in this Schedule contains machinery provisions for administrative penalties.

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

             (1)  An * exempt Australian government agency that:

                     (a)  fails to withhold an amount as required by Division 12; or

                     (b)  fails to pay to the Commissioner an amount as required by Division 14;

is liable to pay to the Commissioner a penalty of 20 penalty units.

Note 1:       See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Note 2:       Division 298 in this Schedule contains machinery provisions for administrative and civil penalties.

Exception

             (4)  This section does not apply in relation to an * amount required to be withheld from a * withholding payment covered by Subdivision 12-F (about dividend, interest or royalty payment) or by Subdivision 12-FB (about payments to foreign residents).

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

                   An * exempt Australian government agency that:

                     (a)  fails to withhold an amount as required by Division 12 from a * withholding payment covered by Subdivision 12-F (about dividend, interest or royalty payment); or

                     (b)  fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;

is liable to pay to the Commissioner a penalty equal to that amount.

Note 1:       An exempt Australian government agency may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner's determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).

Note 2:       Division 298 in this Schedule contains machinery provisions for administrative penalties.

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

                   An * exempt Australian government agency that:

                     (a)  fails to withhold an amount as required by Division 12 from a * withholding payment covered by Subdivision 12-FB (about payments to foreign residents); or

                     (b)  fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;

is liable to pay to the Commissioner a penalty equal to that amount.

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

Subdivision 16-B -- To pay withheld amounts to the Commissioner

Table of sections

When and how to pay amounts to the Commissioner

16-70        Entity to pay amounts to Commissioner

16-75        When amounts must be paid to Commissioner

16-80        Penalty for failure to pay within time

16-85        How amounts are to be paid

Who is a large, medium or small withholder

16-95        Meaning of large withholder

16-100      Meaning of medium withholder

16-105      Meaning of small withholder

16-110      Commissioner may vary withholder's status downwards

16-115      Commissioner may vary withholder's status upwards

When and how to pay amounts to the Commission e r

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, 14-C or 14-D must do so in accordance with sections 16-80 and 16-85.

Note:          For provisions about the 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) or (3) 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 withhold e r

16-95   Meaning of large withholder

             (1)  An entity is a large withholder for a particular month (the current month ) in a * financial year starting on or after 1 July 2001 if:

                     (a)  it was a * large withholder for June 2001; or

                     (b)  the * amounts withheld by the entity during a financial year ending at least 2 months before the current month exceeded $1 million; or

                     (c)  both of the following apply:

                              (i)  at the end of a financial year (the threshold year ) ending at least 2 months before the current month, the entity was one of a number of companies that were at that time all members of the same * wholly-owned group;

                             (ii)  the amounts withheld by those companies during the threshold year exceeded $1 million; or

                     (d)  the Commissioner determines under section 16-115 that the entity is a large withholder for the current month.

Note:          Different rules apply for working out who is a large withholder for a month in 2000-01. See section 16-125.

Exception

             (2)  However, the entity is not a * large withholder if the Commissioner determines under section 16-110 that it is a * medium withholder or a * small withholder for the current month.

16-100   Meaning of medium withholder

             (1)  An entity is a medium withholder for a particular month (the current month ) in a * financial year starting on or after 1 July 2001 if it is not a * large withholder for that month and:

                     (a)  it was a * medium withholder for June 2001; or

                     (b)  the * amounts withheld by the entity during a financial year ending before the current month exceeded $25,000; or

                     (c)  the Commissioner determines under section 16-110 or 16-115 that the entity is a medium withholder for the current month.

Note:          Different rules apply for working out who is a large withholder for a month in 2000-01. See section 16-125.

             (2)  However, the entity is not a * medium withholder if the Commissioner determines under section 16-110 or 16-115 that the entity is a * large withholder or a * small withholder for the current month.

16-105   Meaning of small withholder

                   An entity is a small withholder for a particular month if:

                     (a)  there is at least one * amount withheld by the entity during that month; and

                     (b)  the entity is neither a * large withholder nor a * medium withholder for that month.

16-110   Commissioner may vary withholder's status downwards

             (1)  The Commissioner may, by giving written notice to a * withholder:

                     (a)  make the following determinations:

                              (i)  a determination that a * large withholder is a * medium withholder or a * small withholder;

                             (ii)  a determination that a medium withholder is a small withholder; or

                     (b)  revoke or vary any such determination.

             (2)  The notice must state that the determination applies:

                     (a)  for specified months; or

                     (b)  for all months from and including a specified month.

             (3)  The determination has no effect for a particular month unless the notice is given before that month.

             (4)  An entity that would otherwise be a * large withholder or a * medium withholder for a particular month may apply in writing to the Commissioner for a determination under this section.

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

16-115   Commissioner may vary withholder's status upwards

             (1)  The Commissioner may, by giving written notice to a * withholder:

                     (a)  make the following determinations:

                              (i)  a determination that a * small withholder is a * medium withholder or a * large withholder;

                             (ii)  a determination that a medium withholder is a large withholder; or

                     (b)  revoke or vary any such determination.

             (2)  The notice must state that the determination applies:

                     (a)  for specified months; or

                     (b)  for all months from and including a specified month.

             (3)  A determination that a * small withholder is a * medium withholder has no effect for a particular month unless the notice is given before that month.

             (4)  Any other determination under this section has no effect for a month that is earlier than the second month after the month in which the notice is given.

             (5)  The Commissioner may, in making a determination under this section, have regard to the following:

                     (a)  the sum of the amounts that the Commissioner considers to be likely to be the * amounts required to be withheld by the entity in the following 12 months;

                     (b)  the extent (if any) to which the entity makes or receives * withholding payments that were previously made or received by another entity;

                     (c)  any failure by the entity to comply with its obligations under this Part;

                     (d)  any * arrangement that was entered into or carried out for the purpose of lengthening the intervals at which the entity is required to pay to the Commissioner amounts withheld from withholding payments;

                     (e)  such other matters as the Commissioner considers relevant.

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

Subdivision 16-BA -- To be registered

Table of sections

Registration of withholders

16-140      Withholders must be registered

16-141      Registration and cancellation

Branch registration

16-142      Branches may be registered

16-143      Separate amounts for entities and branches

16-144      Cancellation of branch registration

16-145      Effect on branches of cancelling the entity's registration

Registration of employers of working holiday makers

16-146      Employers of working holiday makers must be registered

16-147      Registering employers of working holiday makers

16-148      Cancelling the registration of employers of working holiday makers

Registration of withholde r s

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

                  (aaa)  Division 12A (about deemed payments by AMITs); 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 or capital proceeds);

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 12A, 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 registrati o n

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 or * capital proceeds 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.

Registration of employers of working holiday makers

16-146   Employers of working holiday makers must be registered

             (1)  An entity must apply to the Commissioner to register under section 16-147 if:

                     (a)  the entity must pay an amount to the Commissioner under subsection 16-70(1) from salary, wages, commission, bonuses or allowances it pays to an individual as the individual's * working holiday taxable income; and

                     (b)  in a case where a period has been determined under subsection 16-148(5) during which the entity cannot apply under this section--the period has ended.

             (2)  The entity must apply in the * approved form by the day on which the entity is first required to withhold an amount under Division 12 from salary, wages, commission, bonuses or allowances it pays to an individual as the individual's * working holiday taxable income.

             (3)  However, the Commissioner may allow a longer period for applying.

             (4)  An entity that contravenes this section is liable to an administrative 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 contains machinery provisions for administrative and civil penalties.

             (5)  This section does not affect an obligation that an entity has under section 16-140.

16-147   Registering employers of working holiday makers

             (1)  The Commissioner must register an entity under this section if, and only if, the entity:

                     (a)  has applied under section 16-146 for registration; and

                     (b)  has made a declaration to the Commissioner, in the * approved form, that states that the entity:

                              (i)  has a genuine business requirement to employ one or more * working holiday makers; and

                             (ii)  agrees to comply with the Fair Work Act 2009 in relation to its employment of any individual who is a working holiday maker; and

                            (iii)  agrees to check that any individual it employs as a working holiday maker holds a visa that causes that person to be a working holiday maker; and

                     (c)  has given to the Commissioner, in the approved form, information relating to its employment, or proposed employment, of working holiday makers.

             (2)  Subparagraph (1)(b)(i) does not apply if the entity is not carrying on a * business.

             (3)  The registration takes effect on the day determined by the Commissioner.

Notification of the Commissioner's decision

             (4)  The Commissioner must notify the entity of:

                     (a)  the Commissioner's decision on the application; and

                     (b)  if the Commissioner decides to register the entity--the day on which the registration takes effect;

within 30 days after the making of the application.

Note:          The decision on the application is reviewable (see section 20-80).

             (5)  If the Commissioner decides to register the entity, the * Australian Business Registrar must enter in the * Australian Business Register a statement that the entity is registered under this section. The statement must specify the day on which the registration takes effect.

             (6)  Entry of the statement in the * Australian Business Register under subsection (5) is taken to be a notification of the entity for the purposes of subsection (4).

             (7)  A failure to comply with subsection (4) or (5) does not affect the validity of the Commissioner's decision.

Basis of registration

             (8)  A registration under this section is granted on the basis that:

                     (a)  the registration may be cancelled under section 16-148; and

                     (b)  the registration may be cancelled, suspended, varied or made subject to conditions by or under later legislation; and

                     (c)  no compensation is payable if the registration is cancelled, suspended, varied or made subject to conditions as mentioned in any of the above paragraphs.

16-148   Cancelling the registration of employers of working holiday makers

             (1)  The Commissioner may cancel an entity's registration under section 16-147 if:

                     (a)  the entity advises the Commissioner, in the * approved form, that the entity does not employ, and does not intend to employ, any individual who is a * working holiday maker; or

                     (b)  the Commissioner is satisfied that:

                              (i)  the entity; or

                             (ii)  if the entity is a partnership--any of the partners; or

                            (iii)  if the entity is a company--any director, shareholder or employee of the company who participates in the management or control of the company; or

                            (iv)  if the entity is a trustee of a trust--any appointer of trustees of the trust, or any person who participates in the control of the trust;

                            is not a fit and proper person.

             (2)  The cancellation takes effect on the day determined by the Commissioner. The day must not be earlier than the day on which notice of the cancellation is given under subsection (6).

             (3)  If the Commissioner is considering whether the entity, or another person mentioned in subparagraph (1)(b)(ii), (iii) or (iv), is a fit and proper person, the Commissioner must give the entity a notice that:

                     (a)  informs the entity accordingly; and

                     (b)  invites the entity to make submissions to the Commissioner on the matter within 28 days after the Commissioner gives the notice.

             (4)  Without limiting the matters to which the Commissioner may have regard in considering whether the entity, or another person mentioned in subparagraph (1)(b)(ii), (iii) or (iv), is a fit and proper person, the Commissioner must have regard to:

                     (a)  whether a court has made a finding, in proceedings commenced by the Fair Work Ombudsman, that the entity has contravened the Fair Work Act 2009 ; and

                     (b)  whether the entity has failed to withhold amounts as required by Division 12; and

                     (c)  any relevant information the entity has provided in submissions to the Commissioner within the period specified in paragraph (3)(b).

             (5)  The Commissioner must, having regard to the reasons for the cancellation, determine a period, starting when the cancellation takes effect, during which the entity cannot apply under section 16-146 for registration.

Notification of the cancellation

             (6)  The Commissioner must notify the entity of:

                     (a)  the cancellation; and

                     (b)  the day on which the cancellation takes effect; and

                     (c)  the period determined under subsection (5) for the cancellation.

Note:          A decision to cancel, including a determination under subsection (5), is reviewable (see section 20-80).

             (7)  The * Australian Business Registrar must enter in the * Australian Business Register a statement that the entity's registration under section 16-147 has been cancelled. The statement must specify the day on which the cancellation takes effect.

             (8)  A failure to comply with subsection (6) or (7) does not affect the validity of the Commissioner's decision.

Subdivision 16-C -- To provide information

Table of sections

To the Commissioner

16-150      Commissioner must be notified of amounts

16-152      Annual reports--Withholding payments covered by section 12-175

16-153      Annual reports--other payments

To recipients of withholding payments

16-155      Annual payment summary

16-156      Annual payment summary for sections 12-175 and 12-180

16-157      Payment summary for Subdivision 12-H

16-160      Part-year payment summary

16-165      Payment summaries for superannuation lump sums and payments for termination of employment

16-166      Payment summary for a departing Australia superannuation payment

16-167      Payment summary for payment to recipient who does not quote ABN

16-170      Form and content of payment summary

16-175      Penalty for not providing payment summary

16-180      Commissioner may exempt entity from giving payment summary

16-182      Definition of reportable employer superannuation contribution

To the Commission e r

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 or capital proceeds);

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.

Note:          This section does not apply to amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

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.

Note:          A report under this subsection will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

             (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.

Note:          A report under this subsection will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

             (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 * withholding MIT (the paying trust ) in relation to an income year of that trust.

Note:          The entity may be the withholding MIT 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 * withholding MIT 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 paymen t s

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.

Note:          A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

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 * withholding MIT (the paying trust ) in relation to an income year of that trust.

Note:          The entity may be the withholding MIT 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 * withholding MIT 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 ;

other than a payment covered by a previous payment summary (and a copy of it) given under this section.

Note:          A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

             (2)  The payer must comply with the request within 14 days after receiving it, unless:

                     (a)  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

                     (b)  the payer has made * reportable employer superannuation contributions, in respect of the recipient's employment, during the financial year.

             (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 .

Note:          A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389-20.

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 * withholding MIT to which it relates.

          (1A)  For any of the * withholding payments to which paragraph 16-155(2)(aa) applies, paragraph (1)(d) is taken to refer to the * financial year preceding the financial year in which the withholding payments were received.

             (2)  The Commissioner may, in writing, require particular information to be included in a * payment summary or a class of payment summaries.

             (3)  A * payment summary may consist of 2 or more statements that each complies with subsection (1) and together cover what section 16-155, 16-156, 16-160, 16-165, 16-166 or 16-167 (as appropriate) requires the payment summary to cover.

             (4)  The Commissioner may vary any requirements under subsection (1), (1AAA), (2) or (3) by written notice given to an entity. The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.

16-175   Penalty for not providing payment summary

             (1)  An entity must not fail to comply with any requirements under section 16-155, 16-156, 16-157, 16-160, 16-165, 16-166 or 16-167, or subsection 16-170(1), (1AAA), (1AA), (2) or (3) (including any requirements varied by the Commissioner under subsection 16-170(4)).

Penalty:  20 penalty units.

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

             (2)  An offence under subsection (1) is an offence of strict liability.

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

16-180   Commissioner may exempt entity from giving payment summary

             (1)  The Commissioner may, having regard to the circumstances of a particular case or class of cases, exempt an entity from specified requirements of any of sections 16-155 to 16-167. If the Commissioner does so, the exemption has effect accordingly.

             (2)  An exemption must be made by a written notice:

                     (a)  if it applies to a particular entity--that is given to that entity; or

                     (b)  if it applies to a class of entities--that is given to each of the entities, or a copy of which is published in the Gazette .

16-182   Definition of reportable employer superannuation contribution

             (1)  A reportable employer superannuation contribution , for an individual for an income year, is an amount that has been, is, or will be contributed in respect of the income year:

                     (a)  by an employer of the individual, or an * associate of the employer, for the individual's benefit; and

                     (b)  to a * superannuation fund or an * RSA;

to the extent that either or both of the following paragraphs apply:

                     (c)  the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the size of the amount;

                     (d)  the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the way the amount was, is or will be contributed so that his or her assessable income is reduced.

             (2)  However, an amount is not a reportable employer superannuation contribution to the extent that it is included in the individual's assessable income for the income year.

             (3)  For the purposes of this section, employer has the expanded meaning given by section 12 of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).

             (4)  For the purposes of this section, disregard whether any * superannuation benefits arising from a contribution are payable to a * SIS dependant of the individual if the individual dies before or after becoming entitled to receive the benefits.

             (5)  For the purposes of paragraph (1)(c), treat the individual as neither having, nor being able reasonably to be expected to have, the capacity to influence the size of the amount if:

                     (a)  the employer or * associate is required to contribute the amount by:

                              (i)  an * industrial instrument; or

                             (ii)  the rules of a * superannuation fund; and

                     (b)  the individual does not and did not have, and is not able reasonably to be expected to have or have had, the capacity to influence the content of that instrument or those rules, to the extent that the instrument or rules relate to:

                              (i)  the requirement to contribute the amount; or

                             (ii)  the size of the amount.

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

Table of sections

16-195      Payer's right to recover amounts of penalty: certain withholding taxes

16-195   Payer's right to recover amounts of penalty: certain withholding taxes

             (1)  An entity that has paid an amount of penalty under section 16-30, 16-35 or 16-40 for a * withholding payment covered by:

                     (a)  Subdivision 12-F (about a dividend, interest or royalty payment); or

                    (aa)  section 12-305 (about a departing Australia superannuation payment); or

                   (ab)  Subdivision 12-FC (Seasonal Labour Mobility Program); or

                     (b)  section 12-320 (about a mining payment); or

                     (c)  Subdivision 12-H (about distributions of withholding MIT income);

may recover an amount equal to the amount of penalty from the person liable to pay the * withholding tax, or * mining withholding tax, for the withholding payment.

Note           Sections 16-30, 16-35 and 16-40 provide for an administrative penalty for failing to comply with Division 12 or 14.

             (2)  Subsection (3) applies if an entity has paid an amount of penalty under section 12-415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12-395 in relation to an amount (the relevant amount ).

             (3)  The entity may recover from another entity that is liable to pay * managed investment trust withholding tax in relation to an amount attributable to the relevant amount the lesser of:

                     (a)  an amount equal to the amount of that tax that the other entity is liable to pay; and

                     (b)  the amount of the penalty.

Division 18 -- Recipient's entitlements and obligations

Table of Subdivisions

18-A     Crediting withheld amounts

18-B      Refund of certain withheld amounts

18-C      Recipient's obligations

18-D     Directors etc. of non-complying companies

Subdivision 18-A -- Crediting withheld amounts

Guide to Subdivision 18 - A

18-1   What this Subdivision is about

In general, an entity:

•       that receives a withholding payment (except one covered by section 12-215, 12-250 or 12-285, Subdivision 12-FC, or subsection 12-390(4)); or

•       that is the foreign resident for which a withholding payment covered by section 12-215, 12-250 or 12-285, Subdivision 12-FC, or subsection 12-390(4), (or a part of it) is received;

is entitled to a credit for the amount withheld from the withholding payment.

However, if that entity is a partnership or trust, a partner, beneficiary or trustee may be entitled to the credit.

This Subdivision tells you:

•       who is entitled to a credit; and

•       how to work out the amount of the credit.

How a credit is applied is set out in Division 3 of Part IIB.

Table of sections

General exception

18-5          No credit for refunded amount

Entitlement to credits: income tax liability

18-10        Application of sections 18-15, 18-20 and 18-25

18-15        Tax credit for recipient of withholding payments

18-20        Tax credit where recipient is a partnership

18-25        Tax credit where recipient is a trust

18-27        Tax credit for alienated personal services payments

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

18-30        Credit: dividend, interest or royalty

18-32        Credit: amount attributable to fund payment

18-33         Credit: Seasonal Labour Mobility Program

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

18-40        Credit: liability under Part 4-25

Entitlement to credit: departing Australia superannuation payment

18-42        Credit--departing Australia superannuation payment

Entitlement to credit: mining payment

18-45        Credit--mining payment

Entitlement to credit: Petroleum resource rent tax

18-55        Credit--Natural resource payments

General excepti o n

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 liabili t y

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 withholding MIT income) or Division 13 (about alienated personal services payments).

             (2)  If an entity withholds an amount from a * withholding payment as required by section 12-317, apply sections 18-15, 18-20 and 18-25 in relation to the payment as if the payment had been made to the likely foreign recipient mentioned in section 12-317 (instead of to the intermediary mentioned in that section).

             (3)  If an entity withholds an amount from a * withholding payment as required by section 12-325 (natural resource payments), apply sections 18-15, 18-20 and 18-25 to the payment as if the entity had withheld only so much of that amount as was withheld in respect of tax.

Note:          Section 18-55 provides a credit for amounts withheld in respect of petroleum resource rent tax.

18-15   Tax credit for recipient of withholding payments

             (1)  An entity is entitled to a credit equal to the total of the * amounts withheld from * withholding payments made to the entity during an income year if an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

             (2)  To the extent that the entitlement to a credit is in respect of an * amount withheld from a * withholding payment to which paragraph 16-155(2)(aa) applies, the entitlement is treated as arising for the income year preceding the income year in which the withholding payment is made.

18-20   Tax credit where recipient is a partnership

             (1)  An entity is entitled to a credit in respect of * amounts withheld from * withholding payments made to a partnership during an income year if:

                     (a)  the entity has an individual interest in the net income or partnership loss of the partnership for that income year that is wholly or partly attributable to those withholding payments; and

                     (b)  the * income tax return of the partnership for the income year has been lodged with the Commissioner; and

                     (c)  an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

             (2)  The amount of the credit is worked out using the formula:

where:

"amounts withheld " means the sum of the * amounts withheld from the * withholding payments.

"individual interest " means so much of the individual interest of the partner as is attributable to the * withholding payments.

"net income/partnership loss " means so much of the net income or partnership loss for that income year as is attributable to the * withholding payments.

18-25   Tax credit where recipient is a trust

             (1)  An entity is entitled under subsection (2), (4), (6) or (8) to a credit in respect of * amounts withheld (the amounts withheld ) from * withholding payments made to the trustee of a trust during an income year.

Trust--section 97

             (2)  A beneficiary of the trust is entitled to a credit if:

                     (a)  an amount is included in the assessable income of the beneficiary under section 97 of the Income Tax Assessment Act 1936 in respect of a share of the net income of the trust; and

                     (b)  the share is wholly or partly attributable to the * withholding payments; and

                     (c)  an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the beneficiary for the income year.

             (3)  The amount of the credit is worked out using the formula:

                   where:

"net income " means so much of the net income as is attributable to the * withholding payments.

"share of net income " means so much of that share of the net income as is attributable to the * withholding payments.

Trust--section 98

             (4)  The trustee of the trust is entitled to a credit if:

                     (a)  under section 98 of the Income Tax Assessment Act 1936 the trustee is liable to be assessed, and to pay income tax, on an amount in respect of a share of the net income of the trust to which a beneficiary is presently entitled; and

                     (b)  the share is wholly or partly attributable to the * withholding payments; and

                     (c)  an assessment has been made of that income tax or an assessment has been made that no income tax is payable.

             (5)  The amount of the credit is worked out using the formula:

where:

"net income " means so much of the net income as is attributable to the * withholding payments.

"share of net income " means so much of that share of the net income as is attributable to the * withholding payments.

Trust--section 99 or 99A

             (6)  The trustee of the trust is entitled to a credit under this subsection if:

                     (a)  under section 99 or 99A of the Income Tax Assessment Act 1936 , the trustee is liable to be assessed, and to pay income tax, on the net income of the trust, or on part of it; and

                     (b)  the net income or that part of it is wholly or partly attributable to the * withholding payments; and

                     (c)  an assessment has been made of that income tax or an assessment has been made that no income tax is payable.

             (7)  The amount of the credit is worked out using the formula:

where:

"net income " means so much of the net income as is attributable to the * withholding payments.

"part of net income " means so much of the net income, or of that part of it, as is attributable to the * withholding payments.

Trust--no net income

             (8)  If there is no net income of the trust for the income year, the trustee is entitled to a credit equal to the sum of the * amounts withheld from the * withholding payments.

18-27   Tax credit for alienated personal services payments

                   An entity is entitled to a credit equal to the total of the amounts paid under Division 13 in respect of amounts included in the entity's assessable income for an income year under section 86-15 of the Income Tax Assessment Act 1997 if an assessment has been made of the income tax payable, or an assessment has been made that no income tax is payable, by the entity for the income year.

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

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 any of the following:

                              (i)  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;

                             (ii)  an amount that is represented by or reasonably attributable to an * AMIT DIR payment; and

                     (b)  if subparagraph (a)(i) applies--if the entity has borne all or part of an * amount withheld from the dividend, interest or royalty; and

                     (c)  if subparagraph (a)(ii) applies--if the entity has borne all or part of an amount paid under Division 12A in respect of the AMIT DIR payment.

             (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:

                              (i)  an * amount withheld from the payment under Subdivision 12-H; or

                             (ii)  an amount paid under Division 12A in respect of the fund payment.

             (2)  The amount of the credit is that amount or part.

             (3)  Subsection (4) applies if:

                     (a)  all or part of an amount (the fund payment part ) is represented by a payment that is a * fund payment; and

                     (b)  under subsection 840-805(4A) of the Income Tax Assessment Act 1997 , a * foreign pension fund is taken, in respect of the fund payment part, to be a beneficiary in its own right, and not a beneficiary in the capacity of the trustee of another trust; and

                     (c)  there is an * amount withheld from the fund payment under Subdivision 12-H.

             (4)  For the purposes of paragraph (1)(b):

                     (a)  treat the * foreign pension fund as having borne all or part of the amount withheld; and

                     (b)  treat a beneficiary of the foreign pension fund as not having borne all or part of the amount withheld.

18-33   Credit: Seasonal Labour Mobility Program

             (1)  An individual is entitled to a credit if:

                     (a)  the individual's * ordinary income or * statutory income includes salary, wages, commission, bonuses or allowances; and

                     (b)  an amount is withheld from the salary, wages, commission, bonuses or allowances under Subdivision 12-FC (about the Seasonal Labour Mobility Program).

             (2)  The amount of the credit is the * amount withheld.

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

             (1)  If an entity has paid:

                     (a)  an amount of penalty under section 16-30 or 16-40 to the Commissioner for a * withholding payment covered by Subdivision 12-F or 12-H; or

                     (b)  an amount of * general interest charge under section 298-25 for the penalty;

the entity liable to pay the * withholding tax for the withholding payment is entitled to a credit equal to the amount of penalty, or general interest charge, as appropriate.

       (1AA)  If an entity has paid:

                     (a)  an amount of penalty under section 16-30 or 16-35 to the Commissioner for a * withholding payment covered by Subdivision 12-FC (Seasonal Labour Mobility Program); or

                     (b)  an amount of * general interest charge under section 298-25 for the penalty;

the entity liable to pay the * Seasonal Labour Mobility Program withholding tax for the withholding payment is entitled to a credit equal to the lesser of:

                     (c)  the amount of the penalty, or general interest charge, as appropriate; and

                     (d)  the amount of Seasonal Labour Mobility Program withholding tax (and any general interest charge under section 840-910 of the Income Tax Assessment Act 1997 ) in relation to the withholding payment, reduced by:

                              (i)  any credits from an application of section 18-33 in relation to the withholding payment; and

                             (ii)  any credits from a previous application of this subsection in relation to the withholding payment.

          (1A)  If an entity has paid:

                     (a)  an amount of penalty under section 12-415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12-395; or

                     (b)  an amount of * general interest charge under section 298-25 for the penalty;

the entity liable to pay the * managed investment trust withholding tax in relation to the amount (the relevant amount ) giving rise to the penalty is entitled to a credit equal to the lesser of:

                     (d)  the amount of penalty, or general interest charge, as appropriate; and

                     (e)  the amount of managed investment trust withholding tax (and any general interest charge under section 840-810 of the Income Tax Assessment Act 1997 ) in relation to the relevant amount.

Remission

             (2)  If:

                     (a)  an entity has paid to the Commissioner an amount of penalty mentioned in paragraph (1)(a), (1AA)(a) or (1A)(a); and

                     (b)  the Commissioner remits the whole or a part of the amount of the penalty under section 298-20;

then:

                     (c)  any credit under subsection (1), (1AA) or (1A) relating to the amount paid to the Commissioner is reduced by the amount that is remitted; and

                     (d)  the Commissioner must pay to the entity an amount equal to the amount that is remitted.

             (3)  If:

                     (a)  an entity has paid to the Commissioner an amount of * general interest charge mentioned in paragraph (1)(b), (1AA)(b) or (1A)(b); and

                     (b)  the Commissioner remits the whole or a part of the amount of the charge under section 8AAG;

then:

                     (c)  any credit under subsection (1), (1AA) or (1A) relating to the amount is reduced by the amount that is remitted; and

                     (d)  the Commissioner must pay to the entity an amount equal to the amount that is remitted.

18-40   Credit: liability under Part 4-25

             (1)  If an entity has paid to the Commissioner:

                     (a)  an amount of penalty under Subdivision 284-C in relation to a * scheme to which paragraph 177C(1)(bc) of the Income Tax Assessment Act 1936 applies for a * withholding payment; or

                     (b)  an amount of * general interest charge under section 298-25 in relation to that amount;

the entity liable to pay the * withholding tax for that withholding payment is entitled to a credit equal to the amount paid by the entity.

Remission

             (2)  If:

                     (a)  an entity has paid an amount under Subdivision 284-C in relation to a penalty mentioned in paragraph (1)(a); and

                     (b)  the Commissioner remits the whole or a part of the amount of the penalty under section 298-20;

then:

                     (c)  any credit under subsection (1) relating to the amount paid by the entity is reduced by the amount that is remitted; and

                     (d)  the Commissioner must pay to the entity an amount equal to the amount that is remitted.

             (3)  If:

                     (a)  an entity has paid to the Commissioner an amount of * general interest charge mentioned in paragraph (1)(b); and

                     (b)  the Commissioner remits the whole or a part of the amount of the charge under section 8AAG;

then:

                     (c)  any credit under subsection (1) relating to the amount is reduced by the amount that is remitted; and

                     (d)  the Commissioner must pay to the entity an amount equal to the amount that is remitted.

Entitlement to credit: departing Australia superannuation payme n t

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 payme n t

18-45   Credit--mining payment

Credit--amount withheld

             (1)  If there is an * amount withheld from a * withholding payment that is covered by section 12-320 (mining payment):

                     (a)  if paragraph (b) does not apply--the entity liable to pay * mining withholding tax under section 128V of the Income Tax Assessment Act 1936 on the payment is entitled to a credit of an amount equal to the amount withheld; or

                     (b)  if, under subsection 128U(4) of that Act, separate mining payments are taken to have been made to, or applied for the benefit of, 2 or more entities because of that payment--each of those entities is entitled to a credit equal to the amount worked out using the formula:

Credit--penalty amount

             (2)  If an entity has paid to the Commissioner a penalty amount under section 16-30 or 16-35 in relation to an * amount required to be withheld under section 12-320 (mining payment):

                     (a)  if paragraph (1)(a) applies--the entity mentioned in that paragraph is entitled to a credit equal to the penalty amount; or

                     (b)  if paragraph (1)(b) applies--each of the entities mentioned in that paragraph is entitled to a credit of an amount worked out using the formula:

Remission

             (3)  If the Commissioner remits the whole or a part of the amount of penalty under section 298-20 that has been paid to the Commissioner by the entity:

                     (a)  any credit that relates to the amount is reduced by the amount that is remitted; and

                     (b)  the Commissioner must pay to the entity an amount equal to the amount that is remitted.

Entitlement to credit: Petroleum resource rent t a x

18-55   Credit--Natural resource payments

             (1)  An entity is entitled to a credit in a year of tax (within the meaning of the Petroleum Resource Rent Tax Assessment Act 1987 ) if:

                     (a)  one or more * withholding payments covered by section 12-325 (natural resource payments) from which there are * amounts withheld in respect of * petroleum resource rent tax are made to the entity during the year of tax; and

                     (b)  an assessment has been made of the petroleum resource rent tax payable, or an assessment has been made that no petroleum resource rent tax is payable, by the entity for the year of tax.

             (2)  The amount of the credit is so much of the total of the * amounts withheld as is withheld in respect of * petroleum resource rent tax.

Subdivision 18-B -- Refund of certain withheld amounts

Table of sections

18-65        Refund of withheld amounts by the payer to the recipient

18-70        Refund of withheld amounts by the Commissioner to the recipient

18-80        Refund by Commissioner of amount withheld from payment in respect of investment

18-65   Refund of withheld amounts by the payer to the recipient

             (1)  An entity (the payer ) must refund to another entity (the recipient ) an amount if:

                     (a)  the payer:

                              (i)  withheld the amount purportedly under Division 12 from a payment made to, or received for, the recipient (whether the amount has been paid to the Commissioner or not); or

                            (ia)  paid the amount to the Commissioner purportedly under Division 13 for an * alienated personal services payment in relation to which an amount is included in the recipient's assessable income year under section 86-15 of the Income Tax Assessment Act 1997 ; or

                             (ii)  paid the amount to the Commissioner purportedly under Division 14 (other than Subdivision 14-D) 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.

          (1A)  For the purposes of this section, if an entity has paid an amount to the Commissioner purportedly under Subdivision 12A-C (about deemed payments by AMITs), treat the entity as having withheld the amount purportedly under Division 12.

             (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 (other than Subdivision 14-D) 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; or

                            (iii)  paid to the Commissioner an amount purportedly under Subdivision 14-D for * capital proceeds provided to, or applied on behalf of, 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)  if subparagraph (a)(i), (ia) or (ii) applies--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.

          (1A)  For the purposes of this section, if an entity has paid an amount to the Commissioner purportedly under Subdivision 12A-C (about deemed payments by AMITs), treat the entity as having withheld the amount purportedly under Division 12.

             (2)  The Commissioner must refund the amount if the application sets out:

                     (a)  if the recipient has a * tax file number--that tax file number; or

                     (b)  if the recipient does not have a tax file number but was taken to have quoted a tax file number to the payer before the amount was withheld or paid to the Commissioner--the basis on which the recipient was taken to have quoted the tax file number; or

                     (c)  if the payment or * non-cash benefit was in respect of a * Part VA investment made by the recipient in the course or furtherance of an * enterprise carried on by it--the recipient's * ABN;

and the Commissioner is satisfied that it would be fair and reasonable to refund the amount, having regard to:

                     (d)  the circumstances that gave rise to the withholding obligation (if any); and

                     (e)  the nature of the matter mentioned in paragraph (1)(b); and

                      (f)  any other matter the Commissioner considers relevant.

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

18-80   Refund by Commissioner of amount withheld from payment in respect of investment

                   The Commissioner must refund to an entity all or part of an * amount withheld from a * withholding payment covered by section 12-140 or 12-145 that was made to that entity if:

                     (a)  the entity applies in writing for the refund; and

                     (b)  the Commissioner is satisfied that the entity was entitled to give * the investment body a declaration under Division 5 of Part VA of the Income Tax Assessment Act 1936 in relation to the * Part VA investment in respect of which the withholding payment was made, but did not do so; and

                     (c)  the Commissioner is also satisfied it is fair and reasonable to make the refund, having regard to the purposes of this Part and any other matters that the Commissioner considers appropriate.

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

Subdivision 18-C -- Recipient's obligations

18-100   Obligation to keep payment summary

             (1)  An entity that is given a * payment summary and a copy of it in any financial year under this Part must retain the copy for:

                     (a)  5 years after the end of that financial year; or

                     (b)  a shorter period determined by the Commissioner in writing for the entity; or

                     (c)  a shorter period determined by the Commissioner by legislative instrument for a class of entities that includes the entity.

       (1AA)  A determination under paragraph (1)(c) may specify different periods for different classes of entities.

          (1A)  An offence under subsection (1) is an offence of strict liability.

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

Subdivision 18-D -- Directors etc. of non-complying companies

Table of sections

Object of Subdivision

18-120      Object of Subdivision

PAYG withholding non-compliance tax

18-125      Directors of non-complying companies

18-130      Directors of non-complying companies--tax reduced in certain circumstances

18-135      Associates of directors of non-complying companies

18-140      Notices

18-145      When PAYG withholding non-compliance tax must be paid

18-150      General interest charge payable on unpaid PAYG withholding non-compliance tax

18-155      Validity of decisions and evidence

18-160      Rights of indemnity and contribution

Credits for later compliance

18-165      Credits for later compliance--scope

18-170      Credits for later compliance--Commissioner must give notice in certain circumstances

18-175      Credits for later compliance--Commissioner may give notice

18-180      Effect of earlier credits

Other provisions

18-185      When Commissioner may give notice

18-190      Review of decisions

Object of Subdivisi o n

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 t a x

18-125   Directors of non-complying companies

Liability to pay PAYG withholding non-compliance tax

             (1)  An individual must pay * PAYG withholding non-compliance tax in relation to a company for an income year of the individual if:

                     (a)  the individual is or has been a director (within the meaning of the Corporations Act 2001 ) of the company; and

                     (b)  the company was required to pay to the Commissioner under subsection 16-70(1) in this Schedule amounts:

                              (i)  the company withheld from * withholding payments the company made to any entities during the income year of the individual; and

                             (ii)  to which subsection (2) applies; and

                     (c)  the company did not pay the total of those amounts to the Commissioner on or before the last day (the non-compliance day ) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16-70(1); and

                     (d)  a credit to which the individual is entitled under section 18-15 is attributable to an extent to * amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.

Note:       For the purposes of paragraph (1)(d), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 16-70(1).

             (2)  This subsection applies to * amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day ) under subsection 16-70(1), if:

                     (a)  both of the following subparagraphs apply:

                              (i)  the individual was a director (within the meaning of the Corporations Act 2001 ) of the company on the payment day;

                             (ii)  the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the payment day; or

                     (b)  all of the following subparagraphs apply:

                              (i)  the individual became a director of the company after the payment day;

                             (ii)  the individual was still a director of the company 30 days after becoming a director;

                            (iii)  the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the last of those 30 days.

Amount of tax

             (3)  The amount of the * PAYG withholding non-compliance tax the individual must pay is the lesser of:

                     (a)  the extent of the credit mentioned in paragraph (1)(d); and

                     (b)  the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).

18-130   Directors of non-complying companies--tax reduced in certain circumstances

             (1)  The amount of the * PAYG withholding non-compliance tax the individual must pay as mentioned in section 18-125 is reduced if the Commissioner gives a notice to the individual under this section.

Notice

             (2)  The Commissioner must give a written notice to the individual on a day (the reduction notice day ) (whether before, on or after the day (if any) the Commissioner gives the individual the relevant notice under section 18-140), if the Commissioner is satisfied that:

                     (a)  because of illness or for some other good reason, it would have been unreasonable to expect the individual to take part, and the individual did not take part, in the management of the company at any time during the period:

                              (i)  starting on a day on or by which the company was required to pay any of the total mentioned in paragraph 18-125(1)(c) to the Commissioner under subsection 16-70(1); and

                             (ii)  ending on the reduction notice day; or

                     (b)  the individual took all reasonable steps to ensure that one of the following happened:

                              (i)  the directors (within the meaning of the Corporations Act 2001 ) of the company caused the company to pay the total of the amounts mentioned in paragraph 18-125(1)(c) to the Commissioner;

                             (ii)  the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001 ;

                            (iii)  the directors caused the company to begin to be wound up (within the meaning of that Act);

                            or there were no reasonable steps the individual could have taken to ensure that any of those things happened.

             (3)  In determining what are reasonable steps for the purposes of paragraph (2)(b), the Commissioner must have regard to:

                     (a)  when, and for how long, the individual was a director and took part in the management of the company; and

                     (b)  all other relevant circumstances.

Amount of reduction

             (4)  The amount of the reduction is the amount stated in the notice.

             (5)  In determining the amount to state in the notice, the Commissioner must have regard to:

                     (a)  in a case to which paragraph (2)(a) applies--when, and for how long, the individual could not have been expected to take part, and did not take part, in the management of the company; and

                     (b)  in a case to which paragraph (2)(b) applies--when, and for how long, the individual was a director and took part in the management of the company; and

                     (c)  in either case--what is fair and reasonable in the circumstances.

Effect of reduction

             (6)  The amount of the * PAYG withholding non-compliance tax the individual must pay is treated as always having been that amount as reduced under this section.

18-135   Associates of directors of non-complying companies

Liability to pay PAYG withholding non-compliance tax

             (1)  An individual must pay * PAYG withholding non-compliance tax in relation to a company for an income year of the individual if:

                     (a)  at a time when another individual (the director ) was a director (within the meaning of the Corporations Act 2001 ) of the company, the first individual was an * associate of the director; and

                     (b)  the company was required to pay to the Commissioner under subsection 16-70(1) in this Schedule amounts:

                              (i)  the company withheld from * withholding payments the company made to any entities during the income year of the individual; and

                             (ii)  to which subsection (2) of this section applies; and

                     (c)  the company did not pay the total of those amounts to the Commissioner on or before the last day (the non-compliance day ) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16-70(1); and

                     (d)  subsection (3) or (6) of this section applies; and

                     (e)  a credit to which the individual is entitled under section 18-15 is attributable to an extent to * amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.

Note:       For the purposes of paragraph (1)(e), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 16-70(1).

             (2)  This subsection applies to * amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day ) under subsection 16-70(1), if:

                     (a)  all of the following subparagraphs apply:

                              (i)  the director was a director (within the meaning of the Corporations Act 2001 ) of the company on the payment day;

                             (ii)  the individual was an * associate of the director on the payment day;

                            (iii)  the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the payment day; or

                     (b)  all of the following subparagraphs apply:

                              (i)  the director became a director of the company after the payment day;

                             (ii)  the director was still a director of the company 30 days after becoming a director;

                            (iii)  the individual was an * associate of the director throughout that 30 day period;

                            (iv)  the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the last of those 30 days.

             (3)  This subsection applies if the Commissioner is satisfied that:

                     (a)  because of:

                              (i)  the individual's relationship with the director; or

                             (ii)  a relationship of the individual with the company;

                            the individual knew, or could reasonably have been expected to know, of the company's failure to pay the total of the amounts mentioned in paragraph (1)(c) to the Commissioner; and

                     (b)  none of the following subparagraphs applies:

                              (i)  the individual took all reasonable steps to influence the director to cause the company to notify the Commissioner under Subdivision 18-C of the relevant * amounts withheld;

                             (ii)  the individual took all reasonable steps to influence the director to cause one of the events mentioned in subsection (4) to happen, or there were no reasonable steps the individual could have taken to influence the director to cause any of those events to happen;

                            (iii)  the individual reported the company's non-payment to the Commissioner or to another authority with responsibilities relevant to the operation of the company.

Example: Other authorities with responsibilities relevant to the operation of the company could include the Minister, the police, the Australian Securities and Investments Commission or the Building and Construction Industry Commissioner.

             (4)  The following are the events:

                     (a)  the company pays the total of the amounts mentioned in paragraph (1)(c) to the Commissioner;

                     (b)  an administrator of the company is appointed under section 436A, 436B or 436C of the Corporations Act 2001 ;

                     (c)  the company begins to be wound up (within the meaning of that Act).

             (5)  In determining what are reasonable steps for the purposes of paragraph (3)(b), have regard to:

                     (a)  when, and for how long, the individual was an * associate of the director; and

                     (b)  when, and for how long, the director was a director and took part in the management of the company; and

                     (c)  all other relevant circumstances.

             (6)  This subsection applies if:

                     (a)  the individual was an employee of the company; and

                     (b)  the Commissioner is satisfied that the company treated the individual more favourably than it treated other employees of the company.

Amount of tax

             (7)  The amount of the * PAYG withholding non-compliance tax the individual must pay is the lesser of:

                     (a)  the extent of the credit mentioned in paragraph (1)(e); and

                     (b)  the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).

18-140   Notices

Notices

             (1)  The Commissioner must not commence proceedings to recover:

                     (a)  the * PAYG withholding non-compliance tax an individual must pay for an income year in relation to a company as mentioned in section 18-125 or 18-135; or

                     (b)  any related * general interest charge payable under section 18-150;

unless, after the non-compliance day mentioned in section 18-125 or 18-135, the Commissioner gives a written notice to the individual under this section.

             (2)  The Commissioner may only give the notice if the Commissioner is satisfied, on the basis of information available to the Commissioner, that it is fair and reasonable for the individual to pay * PAYG withholding non-compliance tax in relation to the company for the income year.

             (3)  The Commissioner must not give the notice on a day if, on that day:

                     (a)  the individual; or

                     (b)  in a case to which section 18-135 applies--the director mentioned in that section;

is liable to pay to the Commissioner a penalty under Division 269 because the company has not complied with the obligation mentioned in item 1 of the table in subsection 269-10(1) to pay to the Commissioner an * amount withheld to which paragraph 18-125(1)(b) or 18-135(1)(b) applies.

             (4)  The notice must specify:

                     (a)  the company; and

                     (b)  the income year; and

                     (c)  the amount of the * PAYG withholding non-compliance tax the individual must pay.

Effect of compliance between non-compliance day and notice day

             (5)  Subsections (6) and (7) apply if:

                     (a)  the company's liability to pay the total of the amounts mentioned in paragraph 18-125(1)(c) or 18-135(1)(c) to the Commissioner is discharged to any extent during the period:

                              (i)  starting on the day after the non-compliance day; and

                             (ii)  ending on the day before the day the Commissioner gives the notice under this section to the individual; and

                     (b)  had all discharges of the company's liability occurring during that period occurred before the non-compliance day:

                              (i)  the individual would not have been required to pay the * PAYG withholding non-compliance tax in relation to the company for the income year; or

                             (ii)  the amount of PAYG withholding non-compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non-compliance tax.

             (6)  The amount of the * PAYG withholding non-compliance tax the individual must pay is reduced:

                     (a)  in a case to which subparagraph (5)(b)(i) applies--to nil; or

                     (b)  otherwise--to the amount of PAYG withholding non-compliance tax the individual would have been required to pay as mentioned in subparagraph (5)(b)(ii).

             (7)  The amount of the * PAYG withholding non-compliance tax the individual must pay is treated as always having been that amount as reduced under subsection (6).

18-145   When PAYG withholding non-compliance tax must be paid

             (1)  The * PAYG withholding non-compliance tax an individual must pay for an income year is due and payable at the earliest time any of the income tax the individual must pay for the * financial year to which the income year relates is due and payable.

Note:          Division 5 of the Income Tax Assessment Act 1997 explains how to work out when to pay your income tax.

             (2)  For the purposes of subsection (1), if the individual is not required to pay income tax for the * financial year:

                     (a)  treat the individual as being required to pay income tax for the financial year; and

                     (b)  if the Commissioner has made an assessment that the income tax the individual is required to pay is nil--treat that assessment as being for an amount greater than nil.

Note:          See Part 4-15 in this Schedule for collection and recovery provisions.

18-150   General interest charge payable on unpaid PAYG withholding non-compliance tax

                   If an amount of * PAYG withholding non-compliance tax that an individual must pay to the Commissioner remains unpaid after the time by which it is due to be paid, the individual is liable to pay * general interest charge on the unpaid amount of tax for each day in the period that:

                     (a)  started at the beginning of the day by which the unpaid amount of tax was due to be paid; and

                     (b)  finishes at the end of the last day, at the end of which, any of the following remains unpaid:

                              (i)  the unpaid amount of tax;

                             (ii)  general interest charge on any of the unpaid amount of tax.

18-155   Validity of decisions and evidence

                   Section 175 of the Income Tax Assessment Act 1936 (validity) applies to a decision of the Commissioner under section 18-140 in this Schedule in the same way as it applies to an assessment.

18-160   Rights of indemnity and contribution

             (1)  This section applies if an individual must pay * PAYG withholding non-compliance tax as mentioned in section 18-125 or 18-135 because a company did not pay an amount to the Commissioner as mentioned in paragraph 18-125(1)(c) or 18-135(1)(c).

             (2)  The individual has the same rights (whether by way of indemnity, subrogation, contribution or otherwise) against the company or anyone else as if:

                     (a)  the individual had made a payment equal to the amount of the * PAYG withholding non-compliance tax under a guarantee of the liability of the company to pay the amount to the Commissioner; and

                     (b)  under the guarantee:

                              (i)  the individual; and

                             (ii)  every individual to whom subsection (3) applies;

                            were jointly and severally liable as guarantors (but only, in the case of an individual to whom subparagraph (ii) of this paragraph applies, to the extent to which subsection (3) applies to the individual); and

                     (c)  any credit to which the individual mentioned in subsection (1) is entitled under section 18-170 or 18-175 in relation to the amount of PAYG withholding non-compliance tax were a repayment of the payment mentioned in paragraph (a) of this subsection.

             (3)  This subsection applies to an individual to the extent that:

                     (a)  the individual was a director (within the meaning of the Corporations Act 2001 ) of the company on the day (the payment day ) on or by which the company was required to pay the amount mentioned in subsection (1) to the Commissioner; or

                     (b)  both of the following subparagraphs apply:

                              (i)  the individual became a director of the company after the payment day;

                             (ii)  the individual was still a director of the company 30 days after becoming a director.

             (4)  However, subsection (3) does not apply to an individual to the extent that the amount of the * PAYG withholding non-compliance tax the individual must pay in relation to the company for the income year as mentioned in section 18-125 is reduced under section 18-130.

Credits for later complian c e

18-165   Credits for later compliance--scope

                   Sections 18-170, 18-175 and 18-180 apply if:

                     (a)  an individual must pay * PAYG withholding non-compliance tax in relation to a company for an income year because the company did not pay to the Commissioner the total of the amounts mentioned in paragraph 18-125(1)(c) or 18-135(1)(c); and

                     (b)  the Commissioner gives to the individual a notice under section 18-140 on a particular day (the tax notice day ) in relation to the PAYG withholding non-compliance tax the individual must pay; and

                     (c)  on or after the tax notice day, the company's liability to pay the total of the amounts to the Commissioner is discharged to any extent.

18-170   Credits for later compliance--Commissioner must give notice in certain circumstances

Commissioner must give notice to director or associate in certain circumstances

             (1)  The Commissioner must give a written notice to the individual on a particular day (the credit notice day ) if, had the discharge mentioned in paragraph 18-165(c) (and all previous discharges of the company's liability mentioned in that paragraph) occurred before the tax notice day:

                     (a)  the individual would not have been required to pay the * PAYG withholding non-compliance tax in relation to the company for the income year; or

                     (b)  the amount of PAYG withholding non-compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non-compliance tax.

Note 1:       Subsection 18-180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.

Note 2:       The amount of PAYG withholding non-compliance tax may be limited by:

(a)    the conditions in subsections 18-125(1) and (2) or 18-135(1) to (6); or

(b)   the limits on the amount of the tax in subsection 18-125(3) or 18-135(7).

Note 3:       In working out the actual amount of the tax for the purposes of paragraph (1)(b), have regard to other credits to which the individual is entitled under this section or section 18-175. See subsection 18-180(1).

Director or associate entitled to credit if Commissioner gives notice

             (2)  The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).

             (3)  The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.

Amount of credit

             (4)  The amount of the credit is the amount stated in the notice.

             (5)  In a case to which paragraph (1)(a) applies, the amount stated must be the amount of the * PAYG withholding non-compliance tax.

             (6)  In any other case, the amount stated:

                     (a)  must not exceed the amount of the * PAYG withholding non-compliance tax; and

                     (b)  must not exceed the amount of the discharge mentioned in paragraph 18-165(c); and

                     (c)  must not be less than the amount by which:

                              (i)  the amount of the PAYG withholding non-compliance tax; exceeds

                             (ii)  the amount that would have been the amount of the PAYG withholding non-compliance tax had the discharge mentioned in paragraph 18-165(c) (and all previous discharges of the company's liability mentioned in that paragraph) occurred before the tax notice day.

             (7)  In determining the amount to state in the notice in a case to which paragraph (1)(a) does not apply, the Commissioner must have regard to what is fair and reasonable in the circumstances.

18-175   Credits for later compliance--Commissioner may give notice

Commissioner may give notice to director or associate

             (1)  The Commissioner may give a written notice to the individual on a particular day (the credit notice day ).

Note:          Subsection 18-180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.

Director or associate entitled to credit if Commissioner gives notice

             (2)  The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).

             (3)  The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.

Amount of credit

             (4)  The amount of the credit is the amount stated in the notice.

             (5)  The amount stated:

                     (a)  must not exceed the amount of the * PAYG withholding non-compliance tax; and

Note:       In working out the amount of the tax for the purposes of paragraph (5)(a), have regard to other credits to which the individual is entitled under section 18-170 or this section. See subsection 18-180(1).

                     (b)  must not exceed the amount of the discharge mentioned in paragraph 18-165(c).

Commissioner's discretion

             (6)  In determining:

                     (a)  whether to give a notice under this section; or

                     (b)  the amount to state in the notice;

the Commissioner must have regard to what is fair and reasonable in the circumstances.

18-180   Effect of earlier credits

             (1)  A reference in section 18-170 or 18-175, or subsection (2) of this section, to the amount of the * PAYG withholding non-compliance tax is treated as being a reference to:

                     (a)  the amount of the PAYG withholding non-compliance tax; less

Note:       The amount of the PAYG withholding non-compliance tax may, in a case to which section 18-125 applies, be affected by reductions under section 18-130.

                     (b)  the total of any credits to which the individual is entitled in relation to the amount of PAYG withholding non-compliance tax because of notices given to the individual under section 18-170 or 18-175 before the credit notice day.

             (2)  The Commissioner must not give a written notice to the individual under section 18-170 or 18-175 if, on the day before the credit notice day, the amount of the * PAYG withholding non-compliance tax is nil.

Other provisio n s

18-185   When Commissioner may give notice

                   The Commissioner may give a notice to the individual on a day (the notice day ) under section 18-130, 18-140, 18-170 or 18-175 if:

                     (a)  on the notice day, the Commissioner has not given a notice of assessment to the individual for the income year mentioned in section 18-125 or 18-135; or

                     (b)  if the notice would:

                              (i)  in the case of a notice under section 18-130--result in the individual being liable to pay * PAYG withholding non-compliance tax or an increased amount of PAYG withholding non-compliance tax; or

                             (ii)  in the case of a notice under section 18-140--result in the Commissioner being able to commence proceedings to recover PAYG withholding non-compliance tax, or an increased amount of PAYG withholding non-compliance tax, from the individual; or

                            (iii)  in the case of a notice under section 18-170 or 18-175--reduce the amount of a credit or disentitle the individual to a credit;

                            the Commissioner gives the notice no later than 2 years after first giving a notice of assessment to the individual for the income year mentioned in section 18-125 or 18-135; or

                     (c)  if the notice would:

                              (i)  in the case of a notice under section 18-130--result in the individual being liable to pay no PAYG withholding non-compliance tax, or a reduced amount of PAYG withholding non-compliance tax; or

                             (ii)  in the case of a notice under section 18-140--result in the Commissioner no longer being able to commence proceedings to recover PAYG withholding non-compliance tax, or result in the Commissioner being able to commence proceedings to recover a reduced amount of PAYG withholding non-compliance tax, from the individual; or

                            (iii)  in the case of a notice under section 18-170 or 18-175--increase the amount of a credit or entitle the individual to a credit;

                            the Commissioner gives the notice no later than 4 years after first giving a notice of assessment to the individual for the income year mentioned in section 18-125 or 18-135; or

                     (d)  in any case--the Commissioner gives the notice:

                              (i)  to give effect to a decision on a review or appeal; or

                             (ii)  as a result of an objection made by the individual or pending a review or appeal.

18-190   Review of decisions

                   An individual to whom the Commissioner gives a notice under section 18-140 in relation to an amount of * PAYG withholding non-compliance tax may object, under Part IVC of this Act, against a decision of the Commissioner under section 18-130, 18-140, 18-170 or 18-175 in relation to the PAYG withholding non-compliance tax if the individual is dissatisfied with the decision.

Division 20 -- Other matters

Table of Subdivisions

20-B      Offences

20-D     Review of decisions

Subdivision 20-B -- Offences

Table of sections

20-35        Offences

20-40        Joining of charges

20-45        Offences that would otherwise be committed by a partnership or unincorporated company

20-35   Offences

             (1)  A person must not:

                     (a)  present a document issued by the Commissioner that specifies a person (the specified person ); and

                     (b)  falsely pretend to be the specified person with the intention of obtaining under this Part a credit for, or a payment of, an * amount withheld from a * withholding payment.

             (2)  A person must not attempt to obtain for the person a credit under this Part for an * amount withheld from a * withholding payment if:

                     (a)  the payment is not covered by section 12-215, 12-250, 12-285 or 12-317, or subsection 12-390(4), and was made to another person; or

                     (b)  the payment is covered by section 12-215, 12-250, 12-285 or 12-317, or subsection 12-390(4), and the person is not the foreign resident in respect of which all or a part of the payment is received as mentioned in that provision.

             (3)  A person must not, with the intention of obtaining a credit, a payment or any other benefit, present:

                     (a)  a copy of a * payment summary (except one relating to Subdivision 12-H); or

                     (b)  a document purporting to be a copy of such a payment summary;

which is not a copy duly given to the person.

Penalty:  60 penalty units, or imprisonment for 12 months, or both.

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

             (4)  A person must not, with the intention of obtaining a credit, a payment or any other benefit, present:

                     (a)  a * payment summary relating to Subdivision 12-H, or a copy of such a payment summary; or

                     (b)  a document purporting to be such a payment summary or a copy of such a payment summary;

which is not a payment summary, or a copy of a payment summary, duly given to the person.

Penalty:  60 penalty units, or imprisonment for 12 months, or both.

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

20-40   Joining of charges

             (1)  Charges against the same person for a number of offences against this Part may be joined in one complaint, information or summons if those charges:

                     (a)  are founded on the same facts; or

                     (b)  form a series of offences of the same or a similar character; or

                     (c)  are part of a series of offences of the same or similar character.

             (2)  Particulars of each offence charged must be set out in a separate paragraph if 2 or more of the charges are included in the same complaint, information or summons.

             (3)  If the charges are joined, the charges must be tried together unless the court:

                     (a)  considers it just that any of the charges should be tried separately; and

                     (b)  makes an order to that effect.

             (4)  If a person is convicted of 2 or more of the offences:

                     (a)  the court may impose one penalty for both or all of those offences; but

                     (b)  the penalty must not exceed the sum of the maximum penalties that could be imposed in respect of each offence separately.

20-45   Offences that would otherwise be committed by a partnership or unincorporated company

             (1)  An offence against this Part that would otherwise be committed by a partnership is taken to have been committed by each partner who:

                     (a)  aided, abetted, counselled or procured the relevant act or omission; or

                     (b)  was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly, and whether by any act or omission of the partner).

             (2)  An offence against this Part that would otherwise be committed by a company that is not incorporated is taken to have been committed by each member of the company's committee of management who:

                     (a)  aided, abetted, counselled or procured the relevant act or omission; or

                     (b)  was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly, and whether by any act or omission of the member).

Subdivision 20-D -- Review of decisions

20-80   Reviewable decisions

                   A person who is dissatisfied with any of the following decisions of the Commissioner may object against the decision in the manner set out in Part IVC.

 

Reviewable decisions

Item

Description

1A

Decision not to grant an exemption under subsection 12-319(1) from withholding obligations in relation to sections 12-315 and 12-317

1

Decision not to give a certificate under subsection 12-335(1) exempting an entity from notifying the Commissioner about a natural resource payment

5

Decision to revoke a certificate under subsection 12-335(3)

10

Decision to vary a certificate under subsection 12-335(3)

14

Decision under subsection 14-220(1) not to issue a certificate on application under subsection 14-220(2)

15

Decision under subsection 14-220(1) to issue a certificate

16

Decision under subsection 14-235(2) not to vary an amount on application under subsection 14-235(3)

17

Decision under subsection 14-235(2) to vary an amount

25

Refusal to determine under subsection 16-110(1) that a large withholder is a * medium withholder or a * small withholder for a particular month or particular months

30

Refusal to determine under subsection 16-110(1) that a medium withholder is a small withholder for a particular month or particular months

35

Decision to revoke a determination made under subsection 16-110(1)

40

Decision to vary a determination made under subsection 16-110(1) for a particular month or particular months

45

Determination under subsection 16-115(1) that a small withholder is a medium withholder or a large withholder for a particular month or particular months

50

Determination under subsection 16-115(1) that a medium withholder is a large withholder

55

Decision not to revoke a determination made under subsection 16-115(1)

60

Decision not to vary a determination made under subsection 16-115(1) for a particular month or particular months

62

Decision under section 16-147 not to register an entity that has applied to be registered

63

Decision under section 16-148 to cancel a registration (including making a determination under subsection 16-148(5))

65

Decision not to refund an amount under section 18-70

70

Decision not to refund an amount under section 18-80

Note:          Division 298 also provides review rights about remission of administrative penalties.

Division 21 -- Entitlements relating to insolvent ADIs and general insurers

Table of Subdivisions

             Guide to Division 21

21-A     Treatment of some payments by APRA

Guide to Division  2 1

21-1   What this Division is about

This Part applies in relation to a payment by APRA under:

               (a)     Division 2AA of Part II of the Banking Act 1959 applying in relation to an account with an ADI; or

              (b)     Part VC of the Insurance Act 1973 applying in relation to a general insurance policy issued by a general insurance company;

in a way corresponding to the way this Part would have applied if the payment had been made by the ADI or company in connection with the account or policy.

Subdivision 21-A -- Treatment of some payments by APRA

Table of sections

21-5          APRA treated like ADI or general insurance company

21-5   APRA treated like ADI or general insurance company

             (1)  This section applies if:

                     (a)  an entity's entitlement under Division 2AA of Part II of the Banking Act 1959 to be paid an amount by * APRA in connection with the entity's account with an * ADI is met wholly or partly; or

                     (b)  an entity's entitlement under Part VC of the Insurance Act 1973 to be paid an amount in connection with a * general insurance policy issued by a * general insurance company is met wholly or partly.

Note 1:       Division 2AA of Part II of the Banking Act 1959 entitles entities that have certain accounts with certain insolvent ADIs to be paid amounts by APRA worked out by reference to the balance of those accounts.

Note 2:       Part VC of the Insurance Act 1973 entitles entities with valid claims against certain insolvent general insurance companies under certain general insurance policies issued by those companies to be paid amounts by APRA.

             (2)  This Part applies in relation to * APRA and the meeting of the entitlement in a way corresponding to the way in which this Part would have applied in relation to the * ADI or * general insurance company doing, in connection with the account or policy, whatever was done in meeting the entitlement.

Example:    APRA (or APRA's agent or delegate) pays an entity an amount of the entity's entitlement relating to an account with an ADI. This Part applies in relation to APRA and the payment in a way corresponding to the way in which this Part would have applied in relation to the ADI had the ADI made a payment at that time of that amount under the arrangements for keeping the account.


Part 2-10 -- Pay as you go (PAYG) instalments

Division 45 -- Instalment payments

Table of Subdivisions

             Guide to Division 45

45-A     Basic rules

45-B      When instalments are due

45-C      Working out instalment amounts

45-D     Quarterly payers

45-E      Annual payers

45-F      Varying the instalment rate for quarterly payers who pay on the basis of instalment income

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

45-H     Partnership income

45-I       Trust income included in instalment income of beneficiary

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

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

45-L      How Commissioner works out amount of quarterly instalment on basis of GDP-adjusted notional tax

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

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

45-P      Anti-avoidance rules

45-Q     General rules for consolidated groups

45-R      Special rules for consolidated groups

45-S      MEC groups


Guide to Division 45

45-1   What this Division is about

If you have business or investment income, you must pay instalments towards your income tax liability. However, you do not have to do so unless the Commissioner has given you an instalment rate. Generally, instalments are payable for each quarter of your income year. Alternatively, instalments could be payable monthly or annually.

Your instalments may be based on your previous year's income tax liability and notified to you by the Commissioner, or on your estimate of your income tax liability for the current income year. (In this case, you are a quarterly payer who pays on the basis of GDP adjusted notional tax). Generally, four quarterly instalments are payable annually on this basis, but you may only be required to pay two.

If you are not eligible to pay instalments on that basis, or if you are so eligible but choose not to do so, you must work out the amount of your quarterly instalment by multiplying your instalment income for an instalment quarter by the rate the Commissioner gave you, or by a rate you choose yourself. (In this case, you are a quarterly payer who pays on the basis of instalment income).

If your business or investment income exceeds a certain limit, you may have to pay an instalment after the end of each month. (In this case, you are a monthly payer).

If you are not required to be registered for GST purposes, you may be able to choose to pay an annual instalment after the end of the income year. (In this case, you are an annual payer).

The amount of annual instalment can be your instalment income for the income year multiplied by the rate the Commissioner gave you, or an amount based on your previous year's income tax liability and notified to you by the Commissioner, or your own estimate of your income tax liability for the income year.

Subdivision 45-A -- Basic rules

Table of sections

45-5          Object of this Part

45-10        Application of Part

45-15        Liability for instalments

45-20        Information to be given to the Commissioner by certain payers

45-25        Penalty for failure to notify Commissioner

45-30        Credit for instalments payable

45-5   Object of this Part

             (1)  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

                   (cb)  amounts of liabilities to the Commonwealth under Chapter 2AA of the Social Security Act 1991 ; and

                    (cc)  amounts of liabilities to the Commonwealth under Part 2 of the Student Assistance Act 1973 ; and

                   (cd)  amounts of liabilities to the Commonwealth under Chapter 3 of the Trade Support Loans Act 2014 ; and

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

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

through the application of the principles set out in the rest of this section.

             (2)  As you earn * instalment income, you pay instalments after the end of each * instalment quarter worked out on the basis of your instalment income for that quarter if you are required or choose to work out your instalment on this basis. However, you may be able to pay an amount notified by the Commissioner. (There are exceptions to this).

          (2A)  Alternatively:

                     (a)  you may be required to pay instalments after the end of each * instalment month worked out on the basis of your instalment income for that month; or

                     (b)  you may be able to choose to pay an annual instalment for the income year.

             (3)  The total of your instalments for an income year is as close as possible to the total of your liabilities for the income year that are covered by subsection (1), except so far as the amounts of those liabilities are attributable to a * net capital gain. (The exception does not apply to the entities listed in subsections 45-120(2) and (2A) or the net capital gains specified in subsection 45-120(2B).)

             (4)  Consequently, the additional amounts you have to pay to discharge those liabilities, after an assessment of your income tax for the income year is made, are as low as possible.

             (5)  If you are a * quarterly payer who pays on the basis of instalment income, the amount of each of your instalments for an income year is the same proportion (as nearly as possible, subject to the principles in subsections (3) and (4)) of the total of those instalments as your * instalment income for that * instalment quarter is of your total instalment income for the income year.

          (5A)  If you are a * monthly payer, the amount of each of your instalments for an income year is the same proportion (as nearly as possible, subject to the principles in subsections (3) and (4)) of the total of those instalments as your * instalment income for that * instalment month is of your total instalment income for the income year.

             (6)  When instalments are payable, and how their amount is calculated, are the same for different kinds of entities, except as expressly provided.

Note:          Subdivision 45-P penalises an entity whose tax position, so far as it relates to PAYG instalments and related matters, is altered by a scheme that is inconsistent with the object of this Part.

45-10   Application of Part

                   This Part applies to individuals, companies, and the entities listed in items 4 to 10, and 12 and 13, of the table in section 9-1 of the Income Tax Assessment Act 1997 (which lists the entities that must pay income tax).

Note 1:       Section 45-450 provides for how this Part applies to a trustee covered by any of items 4 to 8, and 12 and 13, of the table in section 9-1 of the Income Tax Assessment Act 1997 . In most respects, the trust is treated like a company.

Note 2:       This Part also applies to a trustee covered by item 11 of the table in section 9-1 of the Income Tax Assessment Act 1997 , but only to the extent set out in section 45-455, and the rest of Subdivision 45-N, in this Schedule.

45-15   Liability for instalments

             (1)  The Commissioner may give you an instalment rate from time to time, by giving you written notice of the rate.

             (2)  You are liable to pay instalments under this Division if the Commissioner has given you an instalment rate.

Note 1:       The instalment rate that the Commissioner gives you is worked out under section 45-320 or 45-775.

Note 2:       If your assessable income has always consisted wholly of withholding payments (other than non-quotation withholding payments), the Commissioner will not give you an instalment rate.

Note 3:       Work out the amount of your instalments under Subdivision 45-C.

Note 4:       If the Commissioner withdraws the rate under section 45-90, you are not liable to pay further instalments.

Note 5:       For provisions about collection and recovery of amounts you are liable to pay under this Part, see Part 4-15.

45-20   Information to be given to the Commissioner by certain payers

             (1)  If you are liable to pay an instalment for a period (even if it is a nil amount), you must notify the Commissioner of the amount of your * instalment income for the period.

             (2)  You must notify the Commissioner in the * approved form and on or before the day when the instalment is due (regardless of whether it is paid).

          (2A)  If you are a * monthly payer for the period, you must give the notification electronically, unless the Commissioner otherwise approves.

Note:          A penalty applies if you fail to give the notification electronically as required--see section 288-10.

          (2B)  The notification is given electronically if it is transmitted to the Commissioner in an electronic format approved by the Commissioner.

Exceptions

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

                     (a)  a quarterly instalment worked out under section 45-112 (on the basis of GDP-adjusted notional tax or estimated benchmark tax); or

                     (b)  an annual instalment, unless it is worked out under paragraph 45-115(1)(a) (based on the Commissioner's rate and your instalment income for the income year).

45-25   Penalty for failure to notify Commissioner

             (1)  If you fail to notify the Commissioner of an amount as required by section 45-20, or you notify an amount that is less than the correct amount, you are liable to pay the * failure to notify penalty on the amount, or on the shortfall, multiplied by the instalment rate that you are required to use to work out the instalment for the period, for each day in the period that:

                     (a)  started at the beginning of the day by which the amount was due to be paid; and

                     (b)  finishes at the end of the day before you notify the Commissioner of the correct amount, or he or she otherwise becomes aware of it.

             (2)  This section does not apply to a notification required to be lodged on or after 1 July 2000.

Note:          See instead Division 286 in Schedule 1 to the Taxation Administration Act 1953 .

45-30   Credit for instalments payable

             (1)  You are entitled to a credit when the Commissioner makes an assessment of the income tax you are liable to pay for an income year or an assessment that no income tax is payable by you for an income year.

             (2)  The credit is equal to:

                        •   the total of each instalment payable by you for the income year (even if you have not yet paid it);

reduced by:

                        •   the total of each credit that you have claimed under section 45-215 or 45-420 in respect of such an instalment.

             (3)  The making of the assessment, and the resulting credit entitlement, do not affect the liability to pay an instalment.

Note:          How the credit is applied is set out in Division 3 of Part IIB.

             (4)  If:

                     (a)  you are a * subsidiary member of a * consolidated group at any time during a * consolidation transitional year for you; and

                     (b)  an amount of instalment payable by you, or an amount of credit claimed by you under section 45-215 or 45-420, is taken into account in working out a credit to which the * head company of that consolidated group is entitled under section 45-865 for a consolidation transitional year for the head company;

that amount, to the extent to which it is so taken into account under that section, is not to be taken into account in working out any credit to which you are entitled under this section for any year.

Subdivision 45-B -- When instalments are due

Table of sections

45-50        Liability to pay instalments

45-60        Meaning of instalment quarter

45-61        When quarterly instalments are due--payers of quarterly instalments

45-65        Meaning of instalment month

45-67        When monthly instalments are due--payers of monthly instalments

45-70        When annual instalments are due

45-72        Means of payment of instalment

45-75        Instalments recoverable in same way as income tax

45-80        General interest charge on late payment

45-90        Commissioner may withdraw instalment rate

45-50   Liability to pay instalments

             (1)  Subject to subsection (4), you are liable to pay an instalment for an * instalment quarter in an income year if, at the end of that instalment quarter, you are:

                     (a)  a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax; or

                     (b)  a * quarterly payer who pays on the basis of instalment income.

             (2)  Subject to subsection (4), you are liable to pay an instalment for an * instalment quarter that is the third or fourth instalment quarter in an income year if, at the end of that quarter, you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax.

          (2A)  Subject to subsection (4), you are liable to pay an instalment for an * instalment month if, at the end of that month, you are a * monthly payer.

             (3)  Subject to subsection (4), you are liable to pay an instalment for an income year if, at the end of the * starting instalment quarter in that year, you are an * annual payer.

             (4)  You are only liable to pay an instalment for an * instalment quarter, an * instalment month or an income year if:

                     (a)  the Commissioner has given you an instalment rate; and

                     (b)  the Commissioner has not withdrawn your instalment rate before the end of that quarter, month or year.

45-60   Meaning of instalment quarter

                   For an income year (whether it ends on 30 June or not), the following are the instalment quarters :

                     (a)  your first instalment quarter consists of the first 3 months of the income year; and

                     (b)  your second instalment quarter consists of the fourth, fifth and sixth months of the income year; and

                     (c)  your third instalment quarter consists of the seventh, eighth and ninth months of the income year; and

                     (d)  your fourth instalment quarter consists of the tenth, 11th and 12th months of the income year.

45-61   When quarterly instalments are due--payers of quarterly instalments

You are not a deferred BAS payer

             (1)  Subject to subsection (2), if you are:

                     (a)  a * quarterly payer who pays on the basis of instalment income; or

                     (b)  a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax; or

                     (c)  a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax;

the instalment for an * instalment quarter that you are liable to pay is due on or before the 21st day of the month after the end of that quarter.

Note:          You are only liable to pay instalments for the third and fourth instalment quarters in an income year if you are a quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax. See section 45-50.

You are a deferred BAS payer

             (2)  If:

                     (a)  subsection (1) would, but for this subsection, have applied to you in relation to an * instalment quarter; but

                     (b)  you are a * deferred BAS payer on the 21st day of the month after the end of that quarter;

the instalment for that quarter is instead due on or before:

                     (c)  the 28th day of the month after the end of that quarter unless all or a part of a December falls within the last month of that quarter; or

                     (d)  if all or a part of a December falls within the last month of that quarter--the next 28 February.

Note 1:       You are only liable to pay instalments for the third and fourth instalment quarters in an income year if you are a quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax. See section 45-50.

Note 2:       If you are the head company of a consolidated group to which Subdivision 45-Q applies, the instalment is due on or before the 21st day of the month after the end of the quarter: see section 45-715.

45-65   Meaning of instalment month

                   For an income year (whether it ends on 30 June or not), the following are instalment months :

                     (a)  the month that starts on the first day of the income year;

                     (b)  each subsequent month.

Note:          For the meaning of month , see section 2G of the Acts Interpretation Act 1901 .

45-67   When monthly instalments are due--payers of monthly instalments

You are not a deferred BAS payer

             (1)  If you are a * monthly payer, the instalment for an * instalment month that you are liable to pay is due on or before the 21st day of the next instalment month.

             (2)  If:

                     (a)  subsection (1) would, but for this subsection, have applied to you in relation to an * instalment month; but

                     (b)  you are a * deferred BAS payer on the 21st day of the next instalment month;

the instalment for the month mentioned in paragraph (a) is instead due on or before:

                     (c)  the 28th day of that next instalment month unless that next instalment month is January; or

                     (d)  if that next instalment month is January--the next 28 February.

Note:          If you are the head company of a consolidated group to which Subdivision 45-Q applies, the instalment is due on or before the 21st day of that next month: see section 45-715 (as it has effect because of section 45-703).

45-70   When annual instalments are due

             (1)  This section applies if you are liable to pay an annual instalment for the 2002-03 income year or a later income year.

             (2)  If the income year ends on 30 June, the instalment is due on or before the next 21 October.

             (3)  If the income year ends on a day other than 30 June, the instalment is due on or before the 21st day of the fourth month after the end of the income year.

45-72   Means of payment of instalment

                   You must pay an instalment by * electronic payment, or any other means approved in writing by the Commissioner.

45-75   Instalments recoverable in same way as income tax

                   Instalments are to be treated as income tax for the purposes of sections 254 and 255 of the Income Tax Assessment Act 1936 .

45-80   General interest charge on late payment

                   If you fail to pay some or all of an instalment by the time by which the instalment is due to be paid, you are liable to pay the * 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 instalment was due to be paid; and

                     (b)  finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

                              (i)  the instalment;

                             (ii)  general interest charge on any of the instalment.

45-90   Commissioner may withdraw instalment rate

             (1)  The Commissioner may:

                     (a)  by giving you written notice, withdraw your instalment rate; or

                     (b)  by notice published in the Gazette , withdraw the instalment rate of a class of entities that includes you.

Note:          If the Commissioner does so, you cease to be liable to pay instalments (even if you have chosen a rate under section 45-205). See subsection 45-50(4).

             (2)  If the Commissioner withdraws your instalment rate and later gives you another one:

                     (a)  you are again liable to pay instalments in accordance with section 45-50; and

                     (b)  this Division has effect as if the Commissioner has given you an instalment rate for the first time.

Subdivision 45-C -- Working out instalment amounts

Table of sections

45-110      How to work out amount of quarterly instalment on instalment income basis

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

45-114      How to work out amount of monthly instalment

45-115      How to work out amount of annual instalment

45-120      Meaning of instalment income

45-110   How to work out amount of quarterly instalment on instalment income basis

             (1)  Work out the amount of an instalment you are liable to pay for an * instalment quarter as follows if, at the end of that instalment quarter, you are a * quarterly payer who pays on the basis of instalment income:

             (2)  For the purposes of the formula in subsection (1):

"Applicable instalment rate " means:

                     (a)  unless paragraph (b) or (c) applies--the most recent instalment rate given to you by the Commissioner under section 45-15 before the end of that quarter; or

                     (b)  if you have chosen an instalment rate for that quarter under section 45-205--that rate; or

                     (c)  if you have chosen an instalment rate under section 45-205 for an earlier * instalment quarter in that income year (and paragraph (b) does not apply)--that rate.

Note:          If you believe the Commissioner's rate is not appropriate for the current income year, you may choose a different instalment rate under Subdivision 45-F.

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

             (1)  If, at the end of an * instalment quarter in an income year, you are a * quarterly payer who pays on the basis of GDP-adjusted notional tax who is liable to pay an instalment for that quarter, the amount of your instalment for that quarter is:

                     (a)  unless paragraph (b) or (c) applies--the amount that the Commissioner works out under Subdivision 45-L, and notifies to you, as the amount of the instalment; or

                     (b)  if you choose to work out the amount of the instalment on the basis of your estimate of your * benchmark tax for that income year, and you notify the Commissioner in accordance with subsection (2)--the amount worked out under Subdivision 45-M; or

                     (c)  if paragraph (b) applied to your instalment for an earlier * instalment quarter in that income year--the amount that the Commissioner works out under Subdivision 45-M, and notifies to you, as the amount of the instalment.

             (2)  If the amount of the instalment is worked out under paragraph (1)(b) on the basis of your estimate of your * benchmark tax for the income year, you must notify the Commissioner in the * approved form, on or before the day when the instalment is due (disregarding subsection (3)), of the amount of that estimate.

             (3)  If:

                     (a)  after the end of an * instalment quarter the Commissioner notifies you of an amount as the amount of your instalment for that quarter; and

                     (b)  the amount of your instalment for that quarter is not worked out under paragraph (1)(b);

the instalment is due on or before the 21st day after the day on which the notice is given.

45-114   How to work out amount of monthly instalment

             (1)  Work out the amount of an instalment you are liable to pay for an * instalment month as follows if, at the end of that instalment month, you are a * monthly payer:

                  

             (2)  For the purposes of the formula in subsection (1):

"applicable instalment rate " means:

                     (a)  unless paragraph (b) or (c) applies--the most recent instalment rate given to you by the Commissioner under section 45-15 before the end of that month; or

                     (b)  if you have chosen an instalment rate for that month under section 45-205--that rate; or

                     (c)  if you have chosen an instalment rate under section 45-205 for an earlier * instalment month in that income year (and paragraph (b) does not apply)--that rate.

Note:          If you believe the Commissioner's rate is not appropriate for the current income year, you may choose a different instalment rate under Subdivision 45-F.

             (3)  The Commissioner may, by legislative instrument, determine one or more specified additional methods by which a specified class of entity that is a * monthly payer at the end of an * instalment month may work out, in specified circumstances, the amount of an instalment that it is liable to pay for the instalment month.

Note:          For specification by class, see subsection 13(3) of the Legislation Act 2003 .

             (4)  You may choose a method specified in the determination:

                     (a)  unless paragraph (b) applies--for any * instalment month; or

                     (b)  if the determination provides that that method can be chosen only for the first instalment month in an * instalment quarter--for the first instalment month in an instalment quarter.

             (5)  The determination may provide that an entity that chooses a method in accordance with paragraph (4)(b) for the first * instalment month in an * instalment quarter is taken to have chosen that method under subsection (4) for the other instalment months in that quarter. The determination has effect accordingly.

             (6)  Subsection (7) applies if:

                     (a)  the Commissioner has made a determination under subsection (3); and

                     (b)  at the end of an * instalment month, you are a * monthly payer; and

                     (c)  you choose under subsection (4), for that month:

                              (i)  if the determination specifies one additional method to work out that amount--that method; or

                             (ii)  if the determination specifies more than one additional method to work out that amount--one of those methods.

             (7)  Despite subsection (1), work out the amount of an instalment you are liable to pay for that * instalment month in accordance with the method that you chose for that month under subsection (4).

45-115   How to work out amount of annual instalment

             (1)  The amount of an instalment you are liable to pay for the 2002-03 income year or a later income year is whichever of the following you choose:

                     (a)  the amount worked out using the formula:

                     (b)  your most recent * notional tax notified by the Commissioner before the end of the income year;

                     (c)  the amount that you estimate will be your * benchmark tax for the income year.

Note 1:       You cannot choose a different instalment rate under Subdivision 45-F if you are an annual payer. Instead you can work out the amount of your instalment under paragraph (c).

Note 2:       You may be liable to general interest charge under section 45-235 if working out your instalment under paragraph (c) leads you to pay an instalment that is less than 85% of your benchmark tax for the income year (worked out by the Commissioner under section 45-365).

             (2)  Commissioner's instalment rate for an income year means the most recent instalment rate given to you by the Commissioner before the end of the income year.

             (3)  If you choose to work out your instalment under paragraph (1)(c), you must notify the Commissioner, in the * approved form, of the amount of the instalment on or before the day when it is due.

45-120   Meaning of instalment income

General rule

             (1)  Your instalment income for a period includes your * ordinary income * derived during that period, but only to the extent that it is assessable income of the income year that is or includes that period.

Note 1:       No other amount is instalment income unless it is covered by another provision of this section or by Subdivision 45-H or 45-I.

Note 1A:    The operation of this section and other provisions relating to instalment income is affected by sections 45-855 and 45-860 (about a member of a consolidated group during a period before the members of the group are treated as a single entity for the purposes of this Part.)

Note 2:       If during that period you are a partner in a partnership, or a beneficiary of a trust, your instalment income also includes some of the partnership's or trust's instalment income for the period (except in some cases). See Subdivision 45-H or 45-I.

Statutory income included for some entities

             (2)  The instalment income of:

                     (a)  a * complying approved deposit fund or a * non-complying approved deposit fund; or

                     (b)  a * complying superannuation fund or a * non-complying superannuation fund; or

                     (c)  a * pooled superannuation trust;

for a period also includes the entity's * statutory income, to the extent that:

                     (d)  it is reasonably attributable to that period; and

                     (e)  it is assessable income of the income year that is or includes that period.

          (2A)  The instalment income of a * life insurance company for a period also includes any part of its * statutory income that:

                     (a)  is reasonably attributable to that period; and

                     (b)  is included in the * complying superannuation class of its taxable income for the income year that is or includes that period.

Net gains under Subdivision 250-E of the Income Tax Assessment Act 1997 included in instalment income

          (2B)  Your instalment income for a period also includes the difference between:

                     (a)  a gain (or gains) you make from a * financial arrangement to the extent to which it is (or they are):

                              (i)  assessable under Subdivision 250-E of the Income Tax Assessment Act 1997 ; and

                             (ii)  reasonably attributable to that period; and

                     (b)  a loss (or losses) you make from a financial arrangement to the extent to which it is (or they are):

                              (i)  allowable to you as a deduction under Subdivision 250-E of the Income Tax Assessment Act 1997 ; and

                             (ii)  reasonably attributable to that period.

This is so only if the gain (or gains) referred to in paragraph (a) exceeds the loss (or losses) referred to in paragraph (b).

Effect of Division 230 of the Income Tax Assessment Act 1997 on instalment income

          (2C)  Your instalment income for a period also includes the difference between:

                     (a)  a gain (or gains) you make from a * financial arrangement to the extent to which it is (or they are):

                              (i)  assessable under Division 230 of the Income Tax Assessment Act 1997 ; and

                             (ii)  reasonably attributable to that period; and

                     (b)  a loss (or losses) you make from a financial arrangement to the extent to which it is (or they are):

                              (i)  allowable to you as a deduction under Division 230 of the Income Tax Assessment Act 1997 ; and

                             (ii)  reasonably attributable to that period.

This is so only if the gain (or gains) referred to in paragraph (a) equals or exceeds the loss (or losses) referred to in paragraph (b).

          (2D)  However, your instalment income for a period is worked out disregarding subsection (2C) if any of the following apply:

                     (a)  you are an individual;

                     (b)  the only gains and losses that would be taken into account under subsection (2C) for the period are from * financial arrangements that are * qualifying securities.

          (2E)  A gain or loss that is taken into account under subsection (2C) in working out an amount (including a nil amount) to be included in your instalment income for a period is not to be, to any extent, taken into account again under another provision of this section in calculating your instalment income for the same or any other period.

Exclusion: amounts in respect of withholding payments

             (3)  Your instalment income for a period does not include amounts in respect of:

                     (a)  * withholding payments (except * non-quotation withholding payments) made to you during that period; and

                     (b)  amounts included in your assessable income under section 86-15 of the Income Tax Assessment Act 1997 for which there are amounts required to be paid under Division 13; and

                     (c)  which a penalty is applicable under section 12-415.

Farm management deposits: effect of making and repayment

             (4)  Your instalment income for a period is reduced (but not below nil) by a * farm management deposit made during that period, but only to the extent that, at the end of that period, you can reasonably expect to be able to deduct the deposit under section 393-5 of the Income Tax Assessment Act 1997 for the income year that is or includes that period.

             (5)  Your instalment income for a period also includes an amount that section 393-10 of the Income Tax Assessment Act 1997 includes in your assessable income, for the income year that is or includes that period, because of a repayment during that period of all or some of a * farm management deposit.

Gross proceeds on disposal of registered emissions units included in instalment income

          (5A)  Your instalment income for a period also includes an amount that section 420-25 of the Income Tax Assessment Act 1997 includes in your assessable income, for the income year that is or includes that period, because you cease to * hold a * registered emissions unit during that period.

Instalment income of entity that is not liable for instalments

             (6)  An entity can have * instalment income for a period even if the entity is not liable to pay an instalment for that period.

Note:          For example, although a partnership does not pay instalments, it is necessary to work out the partnership's instalment income in order to work out instalments payable by the partners. See Subdivision 45-H.

Subdivision 45-D -- Quarterly payers

Table of sections

45-125      Quarterly payer who pays instalments on the basis of instalment income

45-130      Quarterly payer who pays on the basis of GDP-adjusted notional tax

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

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

45-125   Quarterly payer who pays instalments on the basis of instalment income

             (1)  You are a quarterly payer who pays on the basis of instalment income if:

                     (a)  at the end of the * starting instalment quarter in an income year, you are not a * quarterly payer who pays on the basis of GDP-adjusted notional tax and you are not a * monthly payer or an * annual payer; or

                     (b)  but for this section, you would be a quarterly payer who pays on the basis of GDP-adjusted notional tax at the end of the starting instalment quarter in an income year but you choose to pay quarterly instalments on the basis of your instalment income.

Note:          The entity must make the choice mentioned in paragraph (b) in accordance with subsection (4).

             (2)  The starting instalment quarter in an income year (the current year ) is:

                     (a)  if the Commissioner gives you an instalment rate for the first time during an * instalment quarter in the current year--that instalment quarter (even if it is not the first instalment quarter in the current year); or

                     (b)  if the Commissioner has given you an instalment rate during a previous income year and your instalment rate has not been withdrawn--the first instalment quarter in the current year.

How and when you become such a payer

             (3)  You become a * quarterly payer who pays on the basis of instalment income just before the end of the * starting instalment quarter if paragraph (1)(a) or (b) is satisfied.

             (4)  You must make the choice mentioned in paragraph (1)(b) by notifying the Commissioner in the * approved form on or before the day on which the instalment for that quarter is due (disregarding subsection 45-112(3)).

How and when you stop being such a payer

             (5)  If you are a * quarterly payer who pays on the basis of instalment income because of paragraph (1)(a), you stop being such a payer at the start of the first * instalment quarter in the next income year if:

                     (a)  at the end of that quarter, you become:

                              (i)  a quarterly payer who pays on the basis of GDP-adjusted notional tax; or

                             (ii)  an * annual payer; or

                     (b)  at the end of the first * instalment month of that quarter, you become a * monthly payer.

No quarterly payer status in quarter if monthly payer in following month

          (5A)  Despite subsections (1) and (3), you cannot be a * quarterly payer who pays on the basis of instalment income at a time in an * instalment quarter if you are a * monthly payer at a time in the first * instalment month that ends after that quarter.

             (6)  If you are a * quarterly payer who pays on the basis of instalment income because of paragraph (1)(b), you stop being such a payer at the start of the first * instalment quarter in the next income year if:

                     (a)  you become an * annual payer at the end of that quarter; or

                     (b)  both of the following conditions apply:

                              (i)  you choose not to be a quarterly payer who pays on the basis of instalment income;

                             (ii)  you become a * quarterly payer who pays on the basis of GDP-adjusted notional tax at the end of that quarter.

             (7)  You may only make the choice mentioned in paragraph (6)(b) if you would otherwise satisfy paragraph 45-130(1)(a), (b), (c) or (d) at the end of that quarter. You must make that choice by notifying the Commissioner in the * approved form on or before the day on which the instalment for that quarter is due (disregarding subsection 45-112(3)).

45-130   Quarterly payer who pays on the basis of GDP-adjusted notional tax

             (1)  You are a quarterly payer who pays on the basis of GDP-adjusted notional tax if, at the end of the * starting instalment quarter in an income year:

                     (a)  you are an individual who is not an * annual payer, a * monthly payer or a * quarterly payer who pays on the basis of instalment income; or

                     (b)  you are a * self-assessment entity:

                              (i)  that is not an * annual payer or a * quarterly payer who pays on the basis of instalment income; and

                             (ii)  your base assessment instalment income (within the meaning of section 45-320) for the * base year is $2 million or less; or

                     (c)  you satisfy all of the following conditions:

                              (i)  you are a self-assessment entity whose base assessment instalment income (within the meaning of section 45-320) for the * base year is more than $2 million;

                             (ii)  you are not an annual payer, but you satisfy the conditions set out in subsection 45-140(1) for an annual payer;

                           (iia)  you are not a * monthly payer;

                            (iii)  you are not a quarterly payer who pays on the basis of instalment income; or

                     (d)  for the 2009-10 income year or a later income year--you are a * small business entity (other than because of subsection 328-110(4) of the Income Tax Assessment Act 1997 ).

Note:          Paragraph (a) may apply to you if you are a multi-rate trustee. See section 45-468.

How and when you become such a payer

             (2)  You become such a payer just before the end of the * starting instalment quarter if paragraph (1)(a), (b), (c) or (d) is satisfied.

          (2A)  For the purposes of subsection (2), you satisfy proposed paragraph (1)(d) at the end of the * starting instalment quarter in an income year if you are a * small business entity (other than because of subsection 328-110(4) of the Income Tax Assessment Act 1997 ) for the income year that includes that instalment quarter.

How and when you stop being such a payer

             (3)  You stop being a * quarterly payer who pays on the basis of GDP-adjusted notional tax at the start of the first * instalment quarter in the next income year if you fail to satisfy paragraph (1)(a), (b), (c) or (d) at the end of that quarter.

          (3A)  For the purposes of subsection (3), you fail to satisfy proposed paragraph (1)(d) at the end of the first * instalment quarter in an income year if you are not a * small business entity (other than because of subsection 328-110(4) of the Income Tax Assessment Act 1997 ) for the income year that includes that instalment quarter.

             (4)  In addition, you stop being such a payer at the start of the first * instalment quarter in the next income year if:

                     (a)  at the end of that quarter, you become:

                              (i)  a * quarterly payer who pays on the basis of instalment income; or

                             (ii)  an * annual payer; or

                     (b)  at the end of the first * instalment month of that quarter, you become a * monthly payer.

No quarterly payer status in quarter if monthly payer in following month

             (5)  Despite subsections (1) and (2), you cannot be a * quarterly payer who pays on the basis of GDP-adjusted notional tax at a time in an * instalment quarter if you are a * monthly payer at a time in the first * instalment month that ends after that quarter.

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

             (1)  You are a quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax if, at the end of the * starting instalment quarter in an income year:

                     (a)  you satisfy the conditions to be a * quarterly payer who pays on the basis of GDP-adjusted notional tax under section 45-130; and

                     (b)  you do not satisfy the conditions to be a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax under section 45-134.

How and when you become such a payer

             (2)  You become such a payer just before the end of the * starting instalment quarter if paragraphs (1)(a) and (b) are satisfied.

How and when you stop being such a payer

             (3)  You stop being a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax at the start of the first * instalment quarter in the next income year if you fail to satisfy paragraphs (1)(a) and (b) at the end of that quarter.

             (4)  In addition, you stop being such a payer at the start of the first * instalment quarter in the next income year if:

                     (a)  at the end of that quarter, you become:

                              (i)  a * quarterly payer who pays on the basis of instalment income; or

                             (ii)  an * annual payer; or

                     (b)  at the end of the first * instalment month of that quarter, you become a * monthly payer.

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

             (1)  You are a quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax if, at the end of the * starting instalment quarter in an income year, you are an individual that is a * quarterly payer who pays on the basis of GDP-adjusted notional tax and one or more of the following paragraphs apply:

                     (a)  both of the following conditions are satisfied:

                              (i)  you are carrying on a * primary production business in the income year;

                             (ii)  the assessable income that was * derived from, or resulted from, a primary production business that you carried on in the * base year exceeded the amount of so much of your deductions in that year that are reasonably related to that income;

                     (b)  both of the following conditions are satisfied:

                              (i)  you are a * special professional in the income year;

                             (ii)  your * assessable professional income in the base year exceeded the amount of so much of your deductions in that year that are reasonably related to that income.

Note:          This section may apply to you if you are a multi-rate trustee. See section 45-468.

How and when you become such a payer

             (2)  You become such a payer just before the end of the * starting instalment quarter if subsection (1) is satisfied.

How and when you stop being such a payer

             (3)  You stop being a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax at the start of the first * instalment quarter in the next income year if you fail to satisfy subsection (1) at the end of that quarter.

             (4)  In addition, you stop being such a payer at the start of the first * instalment quarter in the next income year if:

                     (a)  at the end of that quarter, you become:

                              (i)  a * quarterly payer who pays on the basis of instalment income; or

                             (ii)  an * annual payer; or

                     (b)  at the end of the first * instalment month of that quarter, you become a * monthly payer.

Subdivision 45-DA -- Monthly payers

Table of sections

45-136      Monthly payer

45-138      Monthly payer requirement

45-136   Monthly payer

             (1)  You are a monthly payer at a time if:

                     (a)  you were a monthly payer immediately before that time; or

                     (b)  if paragraph (a) does not apply--you satisfy the requirement in subsection 45-138(1) for the income year in which that time occurs.

Note:          If paragraph (b) applies, see subsection (3) for the time at which you become a monthly payer.

             (2)  The starting instalment month in an income year (the current year ) is:

                     (a)  if the Commissioner gives you an instalment rate for the first time during an * instalment month in the current year--the next instalment month in the current year; or

                     (b)  if the Commissioner has given you an instalment rate during a previous income year and your instalment rate has not been withdrawn--the first instalment month in the current year.

How and when you become such a payer

             (3)  Despite subsection (1), if paragraph (1)(b) applies, you become a * monthly payer just before the end of the * starting instalment month in the income year.

How and when you stop being such a payer

             (4)  Despite subsection (1), you stop being a * monthly payer at the start of the first * instalment month in a later income year if:

                     (a)  you do not satisfy the requirement in subsection 45-138(1) for that later income year; and

                     (b)  you give the Commissioner a notice (the MP stop notice ) in the * approved form for that later income year before the start of that later income year.

45-138   Monthly payer requirement

             (1)  You satisfy the requirement in this subsection for an income year if at the start of your * MPR test day for that income year, your base assessment instalment income (within the meaning of section 45-320) for the * base year equals or exceeds:

                     (a)  $20 million; or

                     (b)  if regulations made for the purposes of this paragraph specify a different amount--that amount.

             (2)  However, you do not satisfy the requirement in subsection (1) for an income year if, at the start of your * MPR test day for that income year:

                     (a)  you have (or, if you are a * member of a * GST group, the * representative member of the GST group has) an obligation to give the Commissioner a * GST return for a quarterly * tax period; and

                     (b)  you are not the * head company of a * consolidated group nor the * provisional head company of a * MEC group; and

                     (c)  your base assessment instalment income (within the meaning of section 45-320) for the * base year is less than $100 million.

             (3)  For the purposes of subsections (1) and (2), at the start of an entity's * MPR test day:

                     (a)  determine the amount of the entity's base assessment instalment income (within the meaning of section 45-320) for the * base year only on the basis of the information provided by the Commissioner to the entity before that start of that day; and

                     (b)  in determining on that day whether an entity has an obligation mentioned in paragraph (2)(a), disregard any creation or removal of such an obligation after that day (even if that change is made retrospective to that day).

             (4)  An entity's MPR test day for an income year is:

                     (a)  if the Commissioner gives the entity an instalment rate for the first time during an * instalment month in the income year--the last day of that month; or

                     (b)  otherwise--the first day of the third last month of the previous income year.

             (5)  Subsection (6) applies if, disregarding that subsection, an entity does not satisfy the requirement in subsection (1) for an income year.

             (6)  For the purposes of this section, in determining the entity's base assessment instalment income (within the meaning of section 45-320) for the * base year:

                     (a)  disregard subsection 45-120(2C); and

                     (b)  disregard paragraph (3)(a) of this section, to the extent that that paragraph relates to the operation of subsection 45-120(2C).

             (7)  If, because of subsection (6), the entity satisfies the requirement in subsection (1) for an income year, the entity must give the Commissioner a notice in the * approved form in respect of that income year before:

                     (a)  if the * starting instalment month in the income year is determined under paragraph 45-136(2)(a)--the end of that starting instalment month; or

                     (b)  if the starting instalment month in the income year is determined under paragraph 45-136(2)(b)--the start of that starting instalment month.

Subdivision 45-E -- Annual payers

Table of sections

When you start and stop being an annual payer

45-140      Choosing to pay annual instalments

45-145      Meaning of instalment group

45-150      Entity stops being annual payer if involved with GST registration or instalment group

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

45-160      Head company of a consolidated group stops being annual payer

When you start and stop being an annual pay e r

45-140   Choosing to pay annual instalments

             (1)  You may choose to pay instalments annually instead of quarterly if, at the end of the * starting instalment quarter, you satisfy the following conditions:

                     (a)  you are neither registered, nor * required to be registered, under Part 2-5 of the * GST Act; and

                     (b)  you are not a partner in a partnership that is registered, or required to be registered, under that Part; and

                     (c)  your most recent * notional tax notified by the Commissioner is less than $8,000; and

                     (d)  in the case of a company--the company is not a * participant in a * GST joint venture under Division 51 of that Act; and

                     (e)  in the case of a company--the company is not part of an * instalment group.

Note:          You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45-Q applies: see section 45-720.

          (1A)  You may also choose at a time (subject to subsection (2)) to pay instalments annually instead of quarterly if at that time either:

                     (a)  an * annual tax period election of yours has effect and, if you are a partner in one or more partnerships that are registered under Part 2-5 of the * GST Act, an annual tax period election of each of those partnerships has effect; or

                     (b)  all of the following subparagraphs apply:

                              (i)  you are neither registered, nor * required to be registered, under Part 2-5 of the GST Act;

                             (ii)  you are a partner in one or more partnerships that are registered under that Part;

                            (iii)  an annual tax period election of each of those partnerships has effect;

and at the end of the * starting instalment quarter, you satisfy the following conditions:

                     (c)  you are not a partner in a partnership that is required to be registered under Part 2-5 of the GST Act;

                     (d)  your most recent * notional tax notified by the Commissioner is less than $8,000;

                     (e)  in the case of a company--the company is not a * participant in a * GST joint venture under Division 51 of that Act;

                      (f)  in the case of a company--the company is not part of an * instalment group.

Note:          You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45-Q applies: see section 45-720.

             (2)  You must make the choice under subsection (1) or (1A) by notifying the Commissioner, in the * approved form, on or before the day on which that instalment would otherwise be due.

             (3)  You become an annual payer just before the end of the * starting instalment quarter if:

                     (a)  you satisfy the conditions in subsection (1) or (1A); and

                     (b)  you choose to pay instalment annually.

45-145   Meaning of instalment group

             (1)  An instalment group consists of:

                     (a)  a company:

                              (i)  that has * majority control of at least one other company; but

                             (ii)  of which no other company has * majority control; and

                     (b)  any other company of which the first-mentioned company has * majority control.

             (2)  A company has majority control of another company if, and only if:

                     (a)  the first company is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the other company; or

                     (b)  the first company has the power to appoint or remove the majority of the directors of the other company; or

                     (c)  the other company is, or a majority of its directors are, accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the first company.

45-150   Entity stops being annual payer if involved with GST registration or instalment group

             (1)  You stop being an * annual payer if, during an * instalment quarter that is in an income year that starts after the commencement of this section:

                     (a)  you become * required to be registered under Part 2-5 of the * GST Act; or

                     (b)  you become a partner in a partnership that is required to be registered under that Part; or

                     (c)  a partnership in which you are a partner becomes required to be registered under that Part; or

                     (d)  in the case of a company--the company becomes a * participant in a * GST joint venture under Division 51 of that Act; or

                     (e)  in the case of a company--the company becomes part of an * instalment group; or

                      (f)  an * annual tax period election of yours, or of a partnership in which you are a partner, ceases to have effect.

             (2)  If you stop being an * annual payer under subsection (1):

                     (a)  you must still pay an annual instalment for the income year mentioned in that subsection; and

                     (b)  you must pay an instalment for each instalment quarter in the next income year for which subsection 45-50(1) or (2) requires you to do so.

             (3)  You may again become an * annual payer if:

                     (a)  after you stop being an * annual payer under subsection (1), you satisfy the conditions in subsection 45-140(1) or (1A); and

                     (b)  you again choose under section 45-140 to pay instalments annually.

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

             (1)  You stop being an * annual payer at the start of the first * instalment quarter in an income year (the current year ) if:

                     (a)  after the end of the first instalment quarter in the previous income year and before the end of the first instalment quarter in the current year, the Commissioner notifies you of your * notional tax, and it is $8,000 or more; or

                     (b)  you choose to pay instalments quarterly instead of annually.

          (1A)  You must make the choice by notifying the Commissioner, in the * approved form, on or before the day on which the instalment for the first * instalment quarter for the current year would otherwise be due (disregarding subsection 45-112(3)).

             (2)  You must pay an instalment for the first * instalment quarter of the next income year, and later instalment quarters, in accordance with Subdivision 45-B.

             (3)  You must still pay an annual instalment for the previous income year referred to in subsection (1).

             (4)  You may again become an * annual payer at the end of the first * instalment quarter in a later income year if:

                     (a)  at that time, you satisfy the conditions in subsection 45-140(1) or in paragraphs 45-140(1A)(c), (d), (e) and (f); and

                     (b)  you again choose under section 45-140 to pay annually.

45-160   Head company of a consolidated group stops being annual payer

             (1)  You stop being an * annual payer at the start of an * instalment quarter if Subdivision 45-Q starts applying to you as the * head company of a * consolidated group during that quarter.

             (2)  You must pay an instalment for that * instalment quarter and later instalment quarters in accordance with Subdivision 45-B.

             (3)  You may again become an * annual payer if:

                     (a)  after you stop being an * annual payer under subsection (1), you satisfy the conditions in subsection 45-140(1) or (1A); and

                     (b)  you again choose under section 45-140 to pay instalments annually.

Note:          You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45-Q applies: see section 45-720.

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

Table of sections

45-200      Application

45-205      Choosing a varied instalment rate

45-210      Notifying Commissioner of varied instalment rate

45-215      Credit on using varied rate in certain cases

45-200   Application

             (1)  This Subdivision applies if you are a * quarterly payer who pays on the basis of instalment income at the end of an * instalment quarter.

             (2)  If you are a * monthly payer, this Subdivision has effect in relation to you in respect of an * instalment month in the same way in which it has effect in relation to a * quarterly payer in respect of an * instalment quarter.

45-205   Choosing a varied instalment rate

             (1)  You may choose an instalment rate for working out under section 45-110 the amount of your instalment for an * instalment quarter in an income year.

             (2)  If you do so, you must use that instalment rate to work out the amount of that instalment. (You cannot later choose another instalment rate for working out that amount.)

Note 1:       If choosing a rate leads you to pay an instalment that is too low, you may be liable to general interest charge under section 45-230.

Note 2:       If you choose a rate under this section, you must use it even if the Commissioner later gives you a new instalment rate.

             (3)  You must also use that instalment rate to work out the amount of the instalment that you are liable to pay for each later * instalment quarter in that income year, unless you choose another instalment rate under subsection (1) for working out that amount.

Note 1:       If you choose a rate under this section, you must use it even if the Commissioner later gives you a new instalment rate.

Note 2:       If a rate you have chosen for an instalment quarter is not appropriate for a later instalment quarter in the same income year, you should choose another rate under subsection (1) for the later quarter. If the earlier rate is too low, you may be liable to general interest charge under section 45-230.

             (4)  However, for working out under section 45-110 the amount of your instalment for an * instalment quarter in a later income year, you must use the most recent instalment rate given to you by the Commissioner before the end of that quarter, unless you again choose another instalment rate under subsection (1).

             (5)  Subsection (6) applies if you are a monthly payer.

             (6)  Treat the references in subsections (1) and (4) to section 45-110 as instead being references to section 45-114.

45-210   Notifying Commissioner of varied instalment rate

                   If you work out the amount of an instalment using an instalment rate you have chosen under section 45-205, you must specify that rate in the notice about your instalment income that you must give the Commissioner under section 45-20.

45-215   Credit on using varied rate in certain cases

             (1)  You are entitled to claim a credit if:

                     (a)  the amount of your instalment for an * instalment quarter (the current quarter ) in an income year is to be worked out using an instalment rate you chose under section 45-205; and

                     (b)  that rate is lower than the instalment rate you used to work out the amount of your instalment for the previous instalment quarter (if any) in the same income year; and

                     (c)  the amount worked out using the method statement is greater than nil.

Method statement

Step 1.   Add up the instalments you are liable to pay for the earlier * instalment quarters in the income year (even if you have not yet paid all of them).

Step 2.   Subtract from the step 1 amount each earlier credit that you have claimed under this section or section 45-420 in respect of the income year.

Step 3.   Multiply the total of your * instalment income for those earlier * instalment quarters by the instalment rate to be used for the current quarter.

Step 4.   Subtract the step 3 amount from the step 2 amount.

Step 5.   If the result is a positive amount, it is the amount of the credit you can claim.

             (2)  A claim for a credit must be made in the * approved form on or before the day on which the instalment for the current quarter is due.

Note:          How the credit is applied is set out in Division 3 of Part IIB.

             (3)  The credit entitlement does not affect your liability to pay an instalment.

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

Table of sections

45-225      Effect of Subdivision in relation to monthly payers

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

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

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

45-235      Liability to GIC on shortfall in annual instalment

45-240      Commissioner may remit general interest charge

45-225   Effect of Subdivision in relation to monthly payers

                   If you are a * monthly payer, this Subdivision has effect in relation to you in respect of an * instalment month in the same way in which it has effect in relation to a * quarterly payer in respect of an * instalment quarter.

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

             (1)  You are liable to pay the * general interest charge under this section if:

                     (a)  you use an instalment rate (the varied rate ) under section 45-205 to work out the amount of your instalment for an * instalment quarter (the variation quarter ) in an income year; and

                     (b)  the varied rate is less than 85% of your * benchmark instalment rate for that income year that the Commissioner works out under Subdivision 45-K.

             (2)  You are liable to pay the * general interest charge on the amount worked out as follows:

where:

"rate discrepancy " means the difference between the varied rate and the lesser of:

                     (a)  the most recent instalment rate given to you by the Commissioner before the end of the variation quarter; and

                     (b)  your * benchmark instalment rate for that income year.

"credit adjustment " means:

                     (a)  if, as a result of using the varied rate for the variation quarter, you claimed a credit under section 45-215--the amount worked out as follows:

                            or the amount of the credit, whichever is less; and

                     (b)  otherwise--nil.

          (2A)  If the variation quarter is in a * consolidation transitional year for you as a * subsidiary member of a * consolidated group, a reference in subsection (2) to:

                     (a)  your * instalment income for the variation quarter; or

                     (b)  your instalment income for the earlier instalment quarters in the income year;

is taken to be a reference to so much of that income as is reasonably attributable to the period in that quarter or those quarters (as appropriate) during which you are not a subsidiary member of the group.

             (3)  You are liable to pay the charge for each day in the period that:

                     (a)  started at the beginning of the day by which the instalment for the variation quarter was due to be paid; and

                     (b)  finishes at the end of the day on which your assessed tax for the income year is due to be paid.

             (4)  The Commissioner must give you written notice of the * general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after the notice is given to you.

             (5)  If any of the * general interest charge to which you are liable under subsection (2) remains unpaid at the end of the 14 days referred to in subsection (4), you are also liable to pay the * general interest charge on the unpaid amount for each day in the period that:

                     (a)  starts at the end of those 14 days; and

                     (b)  finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

                              (i)  the unpaid amount;

                             (ii)  general interest charge on the unpaid amount.

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

             (1)  You are liable to pay the * general interest charge under this section if:

                     (a)  the amount of your instalment for an * instalment quarter (the variation quarter ) in an income year is worked out under paragraph 45-112(1)(b) or (c) on the basis of your estimate of your * benchmark tax for that income year; and

                     (b)  the estimate used is less than 85% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

Amount on which the charge is payable

             (2)  You are liable to pay the * general interest charge on the amount worked out as follows (if it is a positive amount):

where:

"acceptable amount " , of your instalment for an * instalment quarter in an income year, has the meaning given by subsections (3), (3A), (3B), (3C) and (3D).

"actual amount " means:

                     (a)  the amount of your instalment, as worked out on the basis of the estimate; or

                     (b)  if, as a result of using the estimate, you claimed a credit under section 45-420 for the variation quarter--the amount of the credit, expressed as a negative amount.

             (3)  If you are a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax, the acceptable amount of your instalment for that instalment quarter is:

                     (a)  if the amount of the instalment is worked out under paragraph 45-112(1)(b) or (c)--the amount worked out using the table in this subsection (which can be a negative amount); or

                     (b)  otherwise--the amount notified to you by the Commissioner under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter.

 

Acceptable amount of an instalment

Item

If the * instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the first in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter; and

(b) 25% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

2

the second in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

(b) the amount worked out by subtracting:

•      the * acceptable amount of your instalment for the earlier instalment quarter in that income year;

      from:

•      50% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

3

the third in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

(b) the amount worked out by subtracting:

•      the total of the * acceptable amounts of your instalments for the earlier instalment quarters in that income year;

      from:

•      75% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

4

the fourth in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

(b) the amount worked out by subtracting:

•      the total of the * acceptable amounts of your instalments for the earlier instalment quarters in that income year;

      from:

•      100% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

          (3A)  Subject to subsections (3B), (3C) and (3D), if you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax, the acceptable amount of your instalment for an * instalment quarter in an income year is:

                     (a)  if the amount of the instalment is worked out under paragraph 45-112(1)(b) or (c)--the amount worked out using the table in this subsection (which can be a negative amount); or

                     (b)  otherwise--the amount notified to you by the Commissioner under paragraph 45-112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the * instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter; and

(b) 75% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

2

the fourth * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

(b) the amount worked out by subtracting:

•      the * acceptable amount of your instalment for the earlier instalment quarter in that income year;

      from:

•      100% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

          (3B)  If:

                     (a)  you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax; and

                     (b)  the Commissioner first gives you an instalment rate during the second * instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is:

                     (c)  if the amount of the instalment is worked out under paragraph 45-112(1)(b) or (c)--the amount worked out using the table in this subsection (which can be a negative amount); or

                     (d)  otherwise--the amount notified to you by the Commissioner under paragraph 45-112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the * instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter; and

(b) 50% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

2

the fourth * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

(b) the amount worked out by subtracting:

•      the * acceptable amount of your instalment for the earlier instalment quarter in that income year;

      from:

•      75% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

          (3C)  If:

                     (a)  you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax; and

                     (b)  the Commissioner first gives you an instalment rate during the third * instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is:

                     (c)  if the amount of the instalment is worked out under paragraph 45-112(1)(b) or (c)--the amount worked out using the table in this subsection (which can be a negative amount); or

                     (d)  otherwise--the amount notified to you by the Commissioner under paragraph 45-112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the * instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter; and

(b) 25% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

2

the fourth * instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that * instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45-L; and

 

 

(b) the amount worked out by subtracting:

•      the * acceptable amount of your instalment for the earlier instalment quarter in that income year;

      from:

•      50% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

          (3D)  If:

                     (a)  you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax; and

                     (b)  the Commissioner first gives you an instalment rate during the fourth * instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is the lower of the following amounts:

                     (c)  the amount that the Commissioner notified to you under paragraph 45-112(1)(a) as the amount of your instalment for that instalment quarter;

                     (d)  25% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

Period for which the charge is payable

             (4)  You are liable to pay the charge for each day in the period that:

                     (a)  started at the beginning of the day by which the instalment for the variation quarter was due to be paid; and

                     (b)  finishes at the end of the day on which your assessed tax for the income year is due to be paid.

Commissioner to notify you

             (5)  The Commissioner must give you written notice of the * general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after the notice is given to you.

Further charge if charge under subsection (2) remains unpaid

             (6)  If any of the * general interest charge to which you are liable under subsection (2) remains unpaid at the end of the 14 days referred to in subsection (5), you are also liable to pay the * general interest charge on the unpaid amount for each day in the period that:

                     (a)  starts at the end of those 14 days; and

                     (b)  finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

                              (i)  the unpaid amount;

                             (ii)  general interest charge on the unpaid amount.

Modifications for subsidiary member of consolidated group

             (7)  Subsections (1) to (6) apply to you with the modifications set out in subsections (8) to (10) if the variation quarter is in a * consolidation transitional year for you as a * subsidiary member of a * consolidated group.

             (8)  For the purposes of subsection (7), a reference in subsection (1), (3), (3A), (3B), (3C) and (3D) to your * benchmark tax for that year is taken to be a reference to the amount worked out as follows:

             (9)  For the purposes of subsection (7), a reference in this section to:

                     (a)  the acceptable amount of your instalment for an * instalment quarter in an income year; or

                     (b)  the acceptable amount of your instalment for the earlier instalment quarter in an income year; or

                     (c)  the acceptable amounts of your instalments for the earlier instalment quarters in an income year;

is taken to be a reference to so much of the acceptable amount of instalment or acceptable amounts of instalments, worked out under subsection (3), (3A), (3B), (3C) or (3D) for that quarter or those quarters (as appropriate), as is reasonably attributable to the period in that quarter or those quarters (as appropriate) during which you are not a * subsidiary member of the group.

           (10)  For the purposes of subsection (7), a reference to the actual amount in subsection (2) is taken to be a reference to so much of the actual amount worked out under that subsection as is reasonably attributable to the period in the variation quarter during which you are not a * subsidiary member of the group.

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

             (1)  This section reduces the amount (the shortfall ) on which you are liable to pay the * general interest charge under subsection 45-232(2) if, for a later * instalment quarter (the later quarter ) that is in the same income year as the variation quarter, the amount worked out as follows is a negative amount:

That amount (expressed as a positive number) is called the top up .

             (2)  For the purposes of the formula in subsection (1):

"actual amount of your instalment for the later quarter " means:

                     (a)  the amount of your instalment for the later quarter, as worked out under section 45-112; or

                     (b)  if you claimed a credit under section 45-420 for the later quarter--the amount of the credit, expressed as a negative amount.

Amount of the reduction

             (3)  The shortfall is reduced by applying so much of the top up as does not exceed the shortfall.

             (4)  However, if some of the top up has already been applied (under any other application or applications of this section) to reduce the amount on which you are liable to pay the * general interest charge under subsection 45-232(2) as it applies to a different * instalment quarter, the shortfall is reduced by applying so much of the top up as has not already been applied, and does not exceed the shortfall.

Period for which reduction has effect

             (5)  The reduction has effect for each day in the period that:

                     (a)  started at the beginning of the day by which the instalment for the later quarter was due to be paid; and

                     (b)  finishes at the end of the day on which your assessed tax for the income year is due to be paid.

45-235   Liability to GIC on shortfall in annual instalment

             (1)  You are liable to pay the * general interest charge under this section if:

                     (a)  you choose to estimate the amount of your instalment (the estimated instalment amount ) for an income year under paragraph 45-115(1)(c) or former paragraph 45-175(1)(b); and

                     (b)  that amount is less than 85% of your * benchmark tax for the income year (which the Commissioner works out under section 45-365).

             (2)  If you estimated the amount of the instalment under former paragraph 45-175(1)(b), you are liable to pay the * general interest charge on the difference between the estimated instalment amount and the lower of the following amounts:

                     (a)  your most recent * notional tax notified by the Commissioner at least 30 days before the day on which the instalment was due;

                     (b)  your * benchmark tax for the income year.

             (3)  If you estimated the amount of the instalment under paragraph 45-115(1)(c), you are liable to pay the * general interest charge on the difference between the estimated instalment amount and the lowest of the following amounts:

                     (a)  the amount of your instalment worked out using the most recent instalment rate given to you by the Commissioner before the end of the income year;

                     (b)  your most recent * notional tax notified by the Commissioner before the end of the income year under subsection 45-320(5);

                     (c)  your * benchmark tax for the income year.

             (4)  You are liable to pay the charge for each day in the period that:

                     (a)  started at the beginning of the day by which the instalment for the income year was due to be paid; and

                     (b)  finishes at the end of the day on which your assessed tax for the income year is due to be paid.

             (5)  The Commissioner must give you written notice of the * general interest charge to which you are liable under subsection (2) or (3). You must pay the charge within 14 days after the notice is given to you.

             (6)  If any of the * general interest charge to which you are liable under subsection (2) or (3) remains unpaid at the end of the 14 days referred to in subsection (5), you are also liable to pay the * general interest charge on the unpaid amount for each day in the period that:

                     (a)  starts at the end of those 14 days; and

                     (b)  finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

                              (i)  the unpaid amount;

                             (ii)  general interest charge on the unpaid amount.

45-240   Commissioner may remit general interest charge

                   The Commissioner may, if he or she is satisfied that because special circumstances exist it would be fair and reasonable to do so, remit the whole or any part of any * general interest charge payable under subsection 45-230(2) or 45-232(2) or subsection 45-235(2) or (3).

Subdivision 45-H -- Partnership income

45-260   Instalment income for a period in which you are in a partnership

             (1)  Your instalment income for a period (the current period ) includes an amount for each partnership in which you are a partner at any time during the current period. The amount is worked out using the formula:

             (2)  For the purposes of the formula in subsection (1):

"your assessable income from the partnership for the last income year " means so much of your individual interest in the partnership's net income for an income year as was included by section 92 of the Income Tax Assessment Act 1936 in your assessable income for the most recent income year:

                     (a)  that ended before the start of the current period; and

                     (b)  for which you have an assessment, or for which the Commissioner has notified you that you do not have a taxable income.

             (3)  However, if for any reason the component defined in subsection (2) does not exist or is a nil amount, or the partnership had no * instalment income for that income year, your instalment income for the current period includes, for that partnership, an amount that is fair and reasonable having regard to:

                     (a)  the extent of your interest in the partnership during the current period; and

                     (b)  the partnership's * instalment income for the current period; and

                     (c)  any other relevant circumstances.

Exception for corporate limited partnerships

             (4)  Your instalment income for the current period does not include an amount for a partnership that is a * corporate limited partnership for the income year that is or includes that period.

Note:          Your instalment income will still include a distribution by the partnership that is ordinary income. See section 45-120.

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

Table of sections

45-280      Instalment income for a period in which you are a beneficiary of a trust

45-285      Instalment income includes distributions by certain resident unit trusts

45-286      Instalment income includes distributions by certain managed investment trusts

45-287      When trusts are disqualified due to concentrated ownership

45-288      Resident investment trusts for beneficiaries who are absolutely entitled

45-290      Exceptions to exclusion of trust capital gains from beneficiary's instalment income

45-280   Instalment income for a period in which you are a beneficiary of a trust

             (1)  Your instalment income for a period (the current period ) includes an amount for each trust of which you are a beneficiary at any time during the current period. The amount is worked out using the formula:

             (2)  For the purposes of the formula in subsection (1):

"your assessable income from the trust for the last income year " means so much of a share of the trust's net income for an income year as:

                     (a)  Division 6 of Part III of the Income Tax Assessment Act 1936 included in your assessable income for the most recent income year:

                              (i)  that ended before the start of the current period; and

                             (ii)  for which you have an assessment, or for which the Commissioner has notified you that you do not have a taxable income; and

                     (b)  is not attributable to a * capital gain made by the trust.

Note:          For exceptions to paragraph (b), see section 45-290.

             (3)  However, if for any reason the component defined in subsection (2) does not exist or is a nil amount, or the trust had no * instalment income for that income year, your instalment income for the current period includes, for that trust, an amount that is fair and reasonable having regard to:

                     (a)  the extent of your interest in the trust, and your interest in the income of the trust, during the current period; and

                     (b)  the trust's * instalment income for the current period; and

                     (c)  any other relevant circumstances.

Exception for corporate unit trusts and public trading trusts

             (4)  Your instalment income for the current period does not include an amount for a trust if the trustee is liable to be assessed, and to pay tax, under section 102S of the Income Tax Assessment Act 1936 for the income year that is or includes that period.

Note:          Your instalment income will still include a distribution by the trust that is ordinary income. See section 45-120.

Exception for certain resident unit trusts

             (5)  Your instalment income for the current period does not include an amount for a trust under subsection (1) if the conditions in either subsection 45-285(1) or (2) are satisfied for you for that trust for that period.

Note:          Your instalment income will instead include a distribution by the trust: see section 45-285.

Exception for trusts whose beneficiary is absolutely entitled

             (6)  Your instalment income for the current period does not include an amount for a trust under subsection (1) if, throughout the current period:

                     (a)  the trustee of the trust did not have any active duties to perform in the management of the trust (other than the duty to deal with the trust income and capital in accordance with any requests made or directions given by the beneficiary or beneficiaries); and

                     (b)  if there was only one beneficiary, the beneficiary:

                              (i)  was absolutely entitled to the trust assets; and

                             (ii)  had a vested and indefeasible interest in any trust income arising from time to time; and

                     (c)  if there was more than one beneficiary, each beneficiary:

                              (i)  was absolutely entitled to that beneficiary's interest in the trust assets; and

                             (ii)  had a vested and indefeasible interest in a proportion of any trust income arising from time to time, being a proportion that corresponded to the beneficiary's proportional interest in the trust capital.

Instead, your instalment income for the current period includes the following amount:

45-285   Instalment income includes distributions by certain resident unit trusts

             (1)  Your instalment income for a period includes trust income or trust capital that a unit trust distributes to you, or applies for your benefit, during that period if:

                     (a)  the unit trust is a resident unit trust (within the meaning of section 102Q of the Income Tax Assessment Act 1936 ) for the income year of the trust that is or includes that period; and

                     (b)  throughout that period:

                              (i)  any of the units in the trust were listed for quotation in the official list of a stock exchange in Australia or elsewhere; or

                             (ii)  any of the units in the trust were offered to the public; or

                            (iii)  the units in the trust were held by at least 50 persons; and

                     (c)  section 45-287 in this Schedule did not apply to the trust at any time during that period; and

                     (d)  throughout that period, the trust's activities consisted only of activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936 .

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

             (2)  Your instalment income for a period also includes trust income or trust capital that a unit trust distributes to you, or applies for your benefit, during that period if:

                     (a)  the income or capital is not included in your instalment income under subsection (1); and

                     (b)  the unit trust is a resident unit trust (within the meaning of section 102Q of the Income Tax Assessment Act 1936 ) for the income year of the trust that is or includes that period; and

                     (c)  throughout that period, the trust's activities consisted only of activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936 ; and

                     (d)  throughout that period, either:

                              (i)  you are yourself the trustee of a unit trust that satisfies each of paragraphs (1)(a) to (d) of this section; or

                             (ii)  you are yourself the trustee of one or more trusts covered by section 45-288; or

                            (iii)  you are exempt from tax; or

                            (iv)  you are a * complying superannuation entity or a statutory fund of a * life insurance company.

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

Extension--nominee and bare trust situations

             (3)  In determining, for the purposes of subparagraph (1)(b)(iii), how many persons hold units in a unit trust, if:

                     (a)  another trust (the holding trust ) is a unit holder in the unit trust; and

                     (b)  the holding trust is a trust of the kind covered by subsection 45-280(6); and

                     (c)  the beneficiary's or beneficiaries' absolute entitlement exists at all times while the holding trust is in existence;

the beneficiary or beneficiaries count as persons who hold units in the unit trust, and the trustee of the holding trust does not.

45-286   Instalment income includes distributions by certain managed investment trusts

                   Your instalment income for a period includes trust income or trust capital that a trust distributes to you, or applies for your benefit, during that period if:

                     (a)  the income or capital is not included in your instalment income under section 45-280 or 45-285; and

                     (b)  the trust satisfies the condition in paragraph 275-10(3)(a) of the Income Tax Assessment Act 1997 in relation to the income year that is or includes that period; and

                     (c)  the trust is a * managed investment trust for that income year; and

                     (d)  the trust meets the requirement in section 275-110 of that Act throughout the income year.

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

45-287   When trusts are disqualified due to concentrated ownership

Concentrated ownership

             (1)  This section applies to a trust if an individual holds, or up to 20 individuals hold between them directly or indirectly and for their own benefit, interests in the trust:

                     (a)  carrying * fixed entitlements to:

                              (i)  at least 75% of the trust's income; or

                             (ii)  at least 75% of the trust's capital; or

                     (b)  if beneficiaries of the trust have a right to vote in respect of activities of the trust--carrying at least 75% of those voting rights.

Single individual

             (2)  Subsection (1) operates as if all of these were a single individual:

                     (a)  an individual, whether or not the individual holds interests in the trust; and

                     (b)  the individual's * associates; and

                     (c)  for any interests in respect of which other individuals are nominees of the individual or of the individual's associates--those other individuals.

Concentrated ownership--potential due to possible variation of rights etc.

             (3)  This section also applies to a trust if, because of:

                     (a)  any provision in the trust's constituent document, or in any contract, agreement or instrument:

                              (i)  authorising the variation or abrogation of rights attaching to any of the interests in the trust; or

                             (ii)  relating to the conversion, cancellation, extinguishment or redemption of any of those interests; or

                     (b)  any contract, * arrangement, option or instrument under which a person has power to acquire any of those interests; or

                     (c)  any power, authority or discretion in a person in relation to the rights attaching to any of those interests;

it is reasonable to conclude that the rights attaching to any of the interests are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that, directly or indirectly, the trust would be disqualified under subsection (1).

Tracing

             (4)  In applying this section:

                     (a)  if a * complying superannuation fund, * approved deposit fund or * superannuation fund for foreign residents has more than 50 members and has, directly or indirectly, a * fixed entitlement to any of the trust's income or capital--that entitlement is taken to be held by more than 20 individuals for their own benefit; and

                     (b)  if a complying superannuation fund, approved deposit fund or superannuation fund for foreign residents has 50 or fewer members and has, directly or indirectly, a fixed entitlement to any of the trust's income or capital--each of the members is taken to have a share of that entitlement, in equal proportions, for his or her own benefit.

45-288   Resident investment trusts for beneficiaries who are absolutely entitled

                   This section covers a trust if:

                     (a)  the trust is a resident unit trust within the meaning of section 102Q of the Income Tax Assessment Act 1936 ; and

                     (b)  the trust is of the kind covered by subsection 45-280(6) in this Schedule; and

                     (c)  the requests or directions that beneficiaries may give the trustee are limited to requests or directions as to which of the activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936 the trustee should engage in; and

                     (d)  all of the trust's beneficiaries became beneficiaries as a result of a public offer to invest in the trust; and

                     (e)  either:

                              (i)  the trust has 50 or more beneficiaries; or

                             (ii)  if the trustee of the trust is also the trustee of one or more other trusts that satisfy paragraphs (a), (b), (c) and (d) of this section--all those trusts together have a total of 50 or more beneficiaries.

45-290   Exceptions to exclusion of trust capital gains from beneficiary's instalment income

             (1)  This section sets out cases where paragraph (b) of the definition of your assessable income from the trust for the last income year in subsection 45-280(2) does not apply.

             (2)  It does not apply in the case of:

                     (a)  a * complying approved deposit fund or a * non-complying approved deposit fund for the income year that is or includes the current period; or

                     (b)  a * complying superannuation fund or a * non-complying superannuation fund for that year; or

                     (c)  a * pooled superannuation trust for that year.

             (3)  It does not apply in the case of a * life insurance company to the extent that the share of the trust's net income is included in the * complying superannuation class of its taxable income for the income year that is or includes the current period.

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

Table of sections

45-320      Working out instalment rate

45-325      Working out your notional tax

45-330      Working out your adjusted taxable income

45-335      Working out your adjusted withholding income

45-340      Adjusted tax on adjusted taxable income or on adjusted withholding income

45-320   Working out instalment rate

             (1)  Except as provided by section 45-775, an instalment rate that the Commissioner gives you must be the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

However, the instalment rate must be a nil rate if either component of the formula is nil.

             (2)  For the purposes of the formula in subsection (1):

"base assessment instalment income " means so much of your assessable income, as worked out for the purposes of the * base assessment, as the Commissioner determines is * instalment income for the * base year.

             (3)  The base assessment is the latest assessment for your most recent income year for which an assessment has been made. However, if the Commissioner is satisfied that there is a later income year for which you do not have a taxable income, the base assessment is the latest return or other information from which an assessment for that income year would have been made.

             (4)  The base year is the income year to which the * base assessment relates.

             (5)  When the Commissioner gives you the instalment rate, he or she must also notify you of the amount of your * notional tax, as worked out for the purposes of working out the instalment rate.

45-325   Working out your notional tax

Notional tax if you have no withholding income

             (1)  Your notional tax is your * adjusted tax (worked out under section 45-340) on your * adjusted taxable income (worked out under section 45-330) for the * base year.

Notional tax if you have no-TFN contributions income

          (1A)  In working out the notional tax of a * complying superannuation fund, * non-complying superannuation fund or * RSA provider for the * base year, assume that the entity had no * no-TFN contributions income for the base year and that the entity was not entitled to a * tax offset for the base year under Subdivision 295-J of the Income Tax Assessment Act 1997 .

Notional tax if you have withholding income

             (2)  However, your notional tax (as worked out under subsection (1)) is reduced if your assessable income for the * base assessment includes amounts in respect of * withholding payments (except * non-quotation withholding payments).

             (3)  It is reduced (but not below nil) by your * adjusted tax (worked out under section 45-340) on your * adjusted withholding income (worked out under section 45-335) for the * base year.

Commissioner may take into account effect of the law, as applying to income years after base year

             (4)  For the purposes of working out your * notional tax, the Commissioner may work out an amount as if provisions of an Act or regulations, as they may reasonably be expected to apply for the purposes of your assessment for a later income year, had applied for the purposes of the * base assessment.

Commissioner may take into account proposed changes to the law so as to reduce instalment rate

             (5)  For the purposes of working out your * notional tax, the Commissioner may work out an amount as if provisions of an Act or regulations that, in the Commissioner's opinion, are likely to be enacted or made had applied for the purposes of the * base assessment. But the Commissioner may do so only if, as a result, the instalment rate given to you is reduced.

             (6)  If the * base year is the income year immediately preceding the income year in which 1 July 2000 occurred, subsections (4) and (5) apply for the purpose of working out the * base assessment instalment income of a * life insurance company in the same way as they apply for the purpose of working out such a company's * notional tax.

45-330   Working out your adjusted taxable income

             (1)  Your adjusted taxable income for the * base year is your total assessable income for the * base assessment, reduced by:

                     (a)  any * net capital gain included in that assessable income; and

                     (b)  your deductions for the base year (except * tax losses), as used in making that assessment; and

                     (c)  the amount of any tax loss, to the extent that it is * unutilised at the end of the base year.

Exception: superannuation entities and net capital gains

             (2)  Paragraph (1)(a) does not apply in the case of:

                     (a)  a * complying approved deposit fund or a * non-complying approved deposit fund for the * base year; or

                     (b)  a * complying superannuation fund or a * non-complying superannuation fund for that year; or

                     (c)  a * pooled superannuation trust for that year.

Special rule for some entities

          (2A)  If an entity:

                     (a)  has * tax losses transferred to it under Subdivision 707-A of the Income Tax Assessment Act 1997 ; or

                     (b)  is a * corporate tax entity at any time during the * base year;

the adjusted taxable income of the entity for the base year is worked out under subsection (1) as if paragraph (1)(c) were replaced by the following provision:

                     (c)  the lesser of the following amounts:

                              (i)  the amount of any tax loss, to the extent that it is * unutilised at the end of the base year;

                             (ii)  the amount of the deductions for tax losses used in making your * base assessment.

Amounts assessable under Subdivision 250-E of the Income Tax Assessment Act 1997

       (2AA)  To avoid doubt, paragraph (1)(a) does not apply to a * net capital gain that is included in your assessable income under Subdivision 250-E of the Income Tax Assessment Act 1997 .

Special rule for life insurance companies

             (3)  The adjusted taxable income of a * life insurance company for the * base year is worked out as follows:

Method statement

Step 1.   Recalculate the taxable income of the * ordinary class for the * base assessment on the basis that it did not include any * net capital gain.

Step 2.   Add to the step 1 result the deductions for * tax losses of the * ordinary class that were used in making the * base assessment.

Step 3.   Reduce the step 2 result by the lesser of the following amounts:

               (a)     the amount of any * tax losses of the * ordinary class, to the extent that they are * unutilised at the end of the * base year;

              (b)     deductions for tax losses of the ordinary class that were used in making the * base assessment.

Step 4.   Add to the step 3 result the taxable income of the * complying superannuation class for the * base assessment.

Step 5.   Add to the step 4 result the deductions for * tax losses of the * complying superannuation class that were used in making the * base assessment.

Step 6.   Reduce the step 5 result by the lesser of the following amounts:

               (a)     the amount of any * tax losses of the * complying superannuation class, to the extent that they are * unutilised at the end of the * base year;

              (b)     deductions for tax losses of the complying superannuation class that were used in making the * base assessment.

              The result of this step is the adjusted taxable income of the company for the * base year.

45-335   Working out your adjusted withholding income

                   Your adjusted withholding income for the * base year is:

                        •   the total of the amounts included in your assessable income for the * base assessment in respect of * withholding payments (except * non-quotation withholding payments);

reduced by:

                        •   your deductions for that year, as used in making that assessment, to the extent that they reasonably relate to those amounts.

45-340   Adjusted tax on adjusted taxable income or on adjusted withholding income

                   Your adjusted tax on your * adjusted taxable income, or on your * adjusted withholding income, for the * base year is worked out as follows:

Method statement

Step 1.   The income tax payable on your * adjusted taxable income, or on your * adjusted withholding income, for the * base year is worked out disregarding any * tax offset under:

               (a)     Subdivision 61-G of the Income Tax Assessment Act 1997 (the private health insurance tax offset); or

              (b)     Subdivision 61-IA of the Income Tax Assessment Act 1997 (the child care tax offset); or

             (da)     Subdivision 61-L of the Income Tax Assessment Act 1997 (tax offset for Medicare levy surcharge (lump sum payments in arrears)); or

               (e)     section 205-70 of the Income Tax Assessment Act 1997 (the tax offset for * franking deficit tax liabilities); or

               (f)     section 159N of the Income Tax Assessment Act 1936 (the tax offset for certain low income earners); or

               (g)     section 290-230 of the Income Tax Assessment Act 1997 (the tax offset for superannuation contributions made for a spouse); or

             (ga)     Subdivision 360-A of the Income Tax Assessment Act 1997 (the tax offset for early stage investors in innovation companies); or

              (h)     Subdivision 418-B of the Income Tax Assessment Act 1997 (the exploration development incentive tax offset).

Step 2.   The * Medicare levy payable on your * adjusted taxable income, or on your * adjusted withholding income, for the * base year is worked out disregarding sections 8B, 8C, 8D, 8E, 8F and 8G of the Medicare Levy Act 1986 (which increase Medicare levy in certain cases).

Step 3.   The amount (if any) that you would have been liable to pay for the * base year in respect of an * accumulated HELP debt if your taxable income for the base year had been your * adjusted taxable income, or your * adjusted withholding income, for that year is worked out.

Step 3AA. The amount (if any) that you would have been liable to pay for the * base year in respect of an * accumulated SSL debt if your taxable income for the base year had been your * adjusted taxable income, or your * adjusted withholding income, for that year is worked out.

Step 3AB. The amount (if any) that you would have been liable to pay for the * base year in respect of an * accumulated ABSTUDY SSL debt if your taxable income for the base year had been your * adjusted taxable income, or your * adjusted withholding income, for that year is worked out.

Step 3AC. The amount (if any) that you would have been liable to pay for the * base year in respect of an * accumulated TSL debt if your taxable income for the base year had been your * adjusted taxable income, or your * adjusted withholding income, for that year is worked out.

Step 3A. The amount (if any) that you would have been liable to pay for the * base year by way of an * FS assessment debt if your taxable income for the base year had been your * adjusted taxable income, or your * adjusted withholding income, for that year is worked out.

Step 4.   The results of steps 1, 2, 3, 3AA, 3AB, 3AC and 3A are added together. The result is your adjusted tax on your * adjusted taxable income, or on your * adjusted withholding income.

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

Table of sections

45-355      When Commissioner works out benchmark instalment rate and benchmark tax

45-360      How Commissioner works out benchmark instalment rate

45-365      Working out your benchmark tax

45-370      Working out your adjusted assessed taxable income for the variation year

45-375      Adjusted assessed tax on adjusted assessed taxable income

45-355   When Commissioner works out benchmark instalment rate and benchmark tax

             (1)  The Commissioner may work out your * benchmark instalment rate for an income year (the variation year ) if, under section 45-205, you choose an instalment rate to work out the amount of your instalment for an * instalment quarter in that year.

          (1A)  The Commissioner may work out your * benchmark tax for an income year (the variation year ) if, under paragraph 45-112(1)(b) or (c), the amount of your instalment for an * instalment quarter in an income year is worked out on the basis of your estimate of your * benchmark tax for that income year.

             (2)  The Commissioner may work out your * benchmark tax for an income year (the variation year ) if, under paragraph 45-115(1)(c), you estimate the amount of your annual instalment for that year.

45-360   How Commissioner works out benchmark instalment rate

             (1)  Your benchmark instalment rate for the variation year is the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

However, your benchmark instalment rate is a nil rate if either component of the formula is nil.

             (2)  For the purposes of the formula in subsection (1):

"variation year instalment income " means so much of your assessable income for the variation year as the Commissioner determines is * instalment income for that year.

45-365   Working out your benchmark tax

Benchmark tax if you had no withholding income

             (1)  Your benchmark tax is your * adjusted assessed tax (worked out under section 45-375) on your * adjusted assessed taxable income (worked out under section 45-370) for the variation year.

Benchmark tax if you have no-TFN contributions income

          (1A)  In working out the benchmark tax of a * complying superannuation fund, * non-complying superannuation fund or * RSA provider for the variation year, assume that the entity had no * no-TFN contributions income for the variation year and that the entity was not entitled to a * tax offset for the variation year under Subdivision 295-J of the Income Tax Assessment Act 1997 .

Benchmark tax if you had withholding income

             (2)  However, your benchmark tax (as worked out under subsection (1)) is reduced if your assessable income for the variation year includes amounts in respect of * withholding payments.

             (3)  It is reduced (but not below nil) by the sum of:

                     (a)  the total amount of the credits to which you are entitled for the variation year under section 18-15 (for amounts withheld from withholding payments made to you during the variation year); and

                     (b)  the total amount of the credits to which you are entitled for the variation year under section 18-27 (for amounts paid under Division 13 in respect of amounts included in your assessable income under section 86-15 of the Income Tax Assessment Act 1997 ).

45-370   Working out your adjusted assessed taxable income for the variation year

             (1)  Your adjusted assessed taxable income for the variation year is your taxable income for the year, reduced by any * net capital gain included in your assessable income for the year.

Exception: superannuation entities and net capital gains

             (2)  In working out the adjusted assessed taxable income , taxable income is not reduced by any * net capital gain in the case of:

                     (a)  a * complying approved deposit fund or a * non-complying approved deposit fund for the variation year; or

                     (b)  a * complying superannuation fund or a * non-complying superannuation fund for the variation year; or

                     (c)  a * pooled superannuation trust for the variation year.

Special rule for life insurance companies

             (3)  The adjusted assessed taxable income of a * life insurance company for the variation year is worked out as follows:

Method statement

Step 1.   Recalculate the * ordinary class of the taxable income for the variation year on the basis that the assessable income that relates to the class did not include any * net capital gain.

Step 2.   Add to the step 1 result the * complying superannuation class of the taxable income for the variation year.

45-375   Adjusted assessed tax on adjusted assessed taxable income

                   Your adjusted assessed tax on your * adjusted assessed taxable income for the variation year is worked out as follows:

Method statement

Step 1.   The income tax payable on your * adjusted assessed taxable income for the variation year is worked out disregarding any * tax offset under:

               (a)     Subdivision 61-G of the Income Tax Assessment Act 1997 (the private health insurance tax offset); or

              (b)     Subdivision 61-IA of the Income Tax Assessment Act 1997 (the child care tax offset); or

             (ca)     Subdivision 61-L of the Income Tax Assessment Act 1997 (tax offset for Medicare levy surcharge (lump sum payments in arrears)); or

              (d)     section 205-70 of the Income Tax Assessment Act 1997 (the tax offset for * franking deficit tax liabilities); or

               (e)     section 159N of the Income Tax Assessment Act 1936 (the tax offset for certain low income earners); or

               (f)     section 290-230 of the Income Tax Assessment Act 1997 (the tax offset for superannuation contributions made for a spouse); or

             (fa)     Subdivision 360-A of the Income Tax Assessment Act 1997 (the tax offset for early stage investors in innovation companies); or

               (g)     Subdivision 418-B of the Income Tax Assessment Act 1997 (the exploration development incentive tax offset).

Step 2.   The * Medicare levy payable on your * adjusted assessed taxable income for the variation year is worked out disregarding sections 8B, 8C, 8D, 8E, 8F and 8G of the Medicare Levy Act 1986 (which increase Medicare levy in certain cases).

Step 3.   The amount (if any) that you would have been liable to pay for the variation year in respect of an * accumulated HELP debt if your taxable income for that year had been your * adjusted assessed taxable income for that year is worked out.

Step 3AA. The amount (if any) that you would have been liable to pay for the variation year in respect of an * accumulated SSL debt if your taxable income for that year had been your * adjusted assessed taxable income for that year is worked out.

Step 3AB. The amount (if any) that you would have been liable to pay for the variation year in respect of an * accumulated ABSTUDY SSL debt if your taxable income for that year had been your * adjusted assessed taxable income for that year is worked out.

Step 3AC. The amount (if any) that you would have been liable to pay for the variation year in respect of an * accumulated TSL debt if your taxable income for that year had been your * adjusted assessed taxable income for that year is worked out.

Step 3A. The amount (if any) that you would have been liable to pay for the variation year by way of an * FS assessment debt if your taxable income for that year had been your * adjusted assessed taxable income for that year is worked out.

Step 4.   The results of steps 1, 2, 3, 3AA, 3AB, 3AC and 3A are added together. The result is your adjusted assessed tax on your * adjusted assessed taxable income for the variation year.

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

Table of sections

45-400      Working out amount of instalment--payers of 4 quarterly instalments

45-402      Working out amount of instalment--payers of 2 quarterly instalments

45-405      Working out your GDP-adjusted notional tax

45-400   Working out amount of instalment--payers of 4 quarterly instalments

Scope

             (1)  This section applies if you are a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax at the end of an * instalment quarter in an income year (the current year ).

Working out amount of instalment

             (2)  The amount of your instalment for that * instalment quarter which the Commissioner must work out and notify to you under paragraph 45-112(1)(a) is:

                     (a)  the amount worked out in accordance with the table if it is positive; or

                     (b)  otherwise--nil.

 

Amount of quarterly instalment worked out on basis of GDP-adjusted notional tax

Item

If the instalment quarter is:

The amount of the instalment is:

1

the first in that income year for which you are liable to pay an instalment

25% of your * GDP-adjusted notional tax

2

the second in that income year for which you are liable to pay an instalment

50% of your * GDP-adjusted notional tax, reduced by the amount of your instalment for the earlier * instalment quarter in that income year

3

the third in that income year for which you are liable to pay an instalment

75% of your * GDP-adjusted notional tax, reduced by the total of your instalments for earlier * instalment quarters in that income year

4

the fourth in that income year for which you are liable to pay an instalment

100% of your * GDP-adjusted notional tax, reduced by the total of your instalments for earlier * instalment quarters in that income year

Note:          Your instalments for earlier instalment quarters may have been worked out on a basis other than GDP-adjusted notional tax.

Amount reduced in circumstances specified by regulations

             (3)  In the circumstances (if any) specified by the regulations, the amount worked out in accordance with the table in subsection (2) is reduced by the amount worked out under the regulations.

             (4)  Without limiting subsection (3), the regulations may specify circumstances by:

                     (a)  specifying the particular * instalment quarter to which the reduction applies; or

                     (b)  specifying the kind of payers to whom the reduction applies.

             (5)  In working out, under subsection (2), the amount of your instalment for an * instalment quarter in an income year, assume that there had not been any reductions under subsection (3) for earlier instalment quarters in that year.

45-402   Working out amount of instalment--payers of 2 quarterly instalments

             (1)  This section applies if you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax at the end of an * instalment quarter in an income year (the current year ).

             (2)  If you are liable to pay an instalment for that * instalment quarter, the amount of that instalment which the Commissioner must work out and notify to you under paragraph 45-112(1)(a) is:

                     (a)  the amount worked out in accordance with this section if it is positive; or

                     (b)  otherwise--nil.

Amount of instalment

             (3)  Subject to subsections (4) to (6), the amount of that instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the * instalment quarter is:

the amount of the instalment is:

1

the third * instalment quarter in the income year

75% of your * GDP-adjusted notional tax

2

the fourth * instalment quarter in the income year

100% of your * GDP-adjusted notional tax, reduced by your instalment for earlier instalment quarter in that income year

You receive instalment rate for the first time in second quarter

             (4)  If the Commissioner gives you an instalment rate for the first time during the second * instalment quarter in that income year, the amount of the instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the * instalment quarter is:

the amount of the instalment is:

1

the third * instalment quarter in the income year

50% of your * GDP-adjusted notional tax

2

the fourth * instalment quarter in the income year

75% of your * GDP-adjusted notional tax, reduced by your instalment for the earlier instalment quarter in that income year

You receive instalment rate for the first time in third quarter

             (5)  If the Commissioner first gives you an instalment rate during the third * instalment quarter in that income year, the amount of the instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the * instalment quarter is:

the amount of the instalment is:

1

the third * instalment quarter in the income year

25% of your * GDP-adjusted notional tax

2

the fourth * instalment quarter in the income year

50% of your * GDP-adjusted notional tax, reduced by your instalment for the earlier instalment quarter in that income year

You receive instalment rate for the first time in fourth quarter

             (6)  If the Commissioner first gives you an instalment rate during the fourth * instalment quarter in that income year, the amount of the instalment must be equal to 25% of your * GDP-adjusted notional tax.

45-405   Working out your GDP-adjusted notional tax

             (1)  Except as provided by section 45-775, your GDP-adjusted notional tax is worked out in the same way as your * notional tax would be worked out for the purposes of working out an instalment rate if that instalment rate were to be given to you at the same time as notice of the amount of the instalment referred to in section 45-400 or 45-402 (as appropriate).

             (2)  However, for the purposes of subsection (1):

                     (a)  your * adjusted taxable income for the * base year; and

                     (b)  your * adjusted withholding income (if any) for the * base year;

are each increased in accordance with the formula:

             (3)  For the purposes of the formula in subsection (2):

"original amount " means the amount that, apart from subsection (2), would be your * adjusted taxable income for the * base year, or your * adjusted withholding income for the * base year, as appropriate.

"GDP adjustment " means:

                     (a)  the percentage (rounded to the nearest whole number, rounding down a number ending in .5) worked out using the following formula; or

                     (b)  if the percentage worked out using the formula is negative--0%:

             (4)  For the purposes of the formula in subsection (3):

"sum of GDP amounts (current year) " means the sum of the * GDP amounts, for the * quarters in the last calendar year (the later calendar year ) ending at least 3 months before the start of the current year, specified in the document referred to in subsection (6).

"sum of GDP amounts (previous year) " means the sum of the * GDP amounts, for the * quarters in the calendar year (the earlier calendar year ) before the later calendar year, specified in the document referred to in subsection (6).

             (5)  The GDP amount for a * quarter is the amount published by the Australian Statistician as the original gross domestic product at current prices for that quarter.

             (6)  The GDP adjustment must be worked out on the basis of the first document that:

                     (a)  is published by the Australian Statistician after the end of the later calendar year; and

                     (b)  sets out the * GDP amounts for all the * quarters in both the later calendar year and the earlier calendar year.

             (7)  To avoid doubt, subsections 45-325(4) and (5) also have effect for the purposes of working out your * GDP-adjusted notional tax.

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

Table of sections

45-410      Working out amount of instalment--payers of 4 quarterly instalments

45-412      Working out amount of instalment--payers of 2 quarterly instalments

45-415      Estimating your benchmark tax

45-420      Credit in certain cases where amount of instalment is nil

45-410   Working out amount of instalment--payers of 4 quarterly instalments

          (1A)  This section applies if you are a * quarterly payer who pays 4 instalments annually on the basis of GDP-adjusted notional tax at the end of an * instalment quarter in an income year (the current year ).

             (1)  For the purposes of paragraph 45-112(1)(b) or (c), the amount of your instalment for that * instalment quarter in an income year is:

                     (a)  the amount worked out, in accordance with this section, on the basis of the estimate of your * benchmark tax for that income year that section 45-415 requires to be used, if that amount is positive; or

                     (b)  otherwise--nil.

Note:          If the amount is negative, you can claim a credit under section 45-420.

First instalment quarter

             (2)  If the * instalment quarter is the first in that income year for which you are liable to pay an instalment, the amount is 25% of the estimate of your * benchmark tax.

Second instalment quarter

             (3)  If the * instalment quarter is the second in that income year for which you are liable to pay an instalment, the amount is worked out by subtracting:

                        •   the amount of your instalment under section 45-112 for the earlier * instalment quarter in that income year;

from:

                        •   50% of the estimate of your * benchmark tax.

Third instalment quarter

             (4)  If the * instalment quarter is the third in that income year for which you are liable to pay an instalment, the amount is worked out using this method statement.

Method statement

Step 1.   The total of your instalments under section 45-112 for earlier * instalment quarters in that income year is subtracted from 75% of the estimate of your * benchmark tax.

Step 2.   If you were entitled to claim a credit under section 45-420 for the second of those earlier * instalment quarters, the amount of the credit is added to the step 1 amount.

Fourth instalment quarter

             (5)  If the * instalment quarter is the fourth in that income year for which you are liable to pay an instalment, the amount is worked out using this method statement.

Method statement

Step 1.   The total of your instalments under section 45-112 for earlier * instalment quarters in that income year is subtracted from the estimate of your * benchmark tax.

Step 2.   For each credit that you were entitled to claim under section 45-420 for any of those earlier * instalment quarters, the amount of the credit is added to the step 1 amount.

45-412   Working out amount of instalment--payers of 2 quarterly instalments

             (1)  This section applies if you are a * quarterly payer who pays 2 instalments annually on the basis of GDP-adjusted notional tax at the end of an * instalment quarter in an income year.

             (2)  If you are liable to pay an instalment for that quarter, the amount of that instalment for the purposes of paragraph 45-112(1)(b) or (c) is:

                     (a)  the amount worked out, in accordance with this section, on the basis of the estimate of your * benchmark tax for that income year that section 45-415 requires to be used, if that amount is positive; or

                     (b)  otherwise--nil.

Note:          If the amount is negative, you can claim a credit under section 45-420.

Instalment for third quarter

             (3)  Subject to subsections (5) to (9), the amount of the instalment for the third * instalment quarter in that year is 75% of the estimate of your * benchmark tax.

Instalment for fourth quarter

             (4)  Subject to subsections (5) to (9), the amount of the instalment for the fourth * instalment quarter in that year is worked out by subtracting:

                     (a)  the amount of your instalment for the earlier instalment quarter in that year;

from:

                     (b)  the estimate of your * benchmark tax.

You receive instalment rate for the first time in second quarter

             (5)  If the Commissioner gives you an instalment rate for the first time during the second * instalment quarter in the income year, the amount of the instalment for the third * instalment quarter in that year is 50% of the estimate of your * benchmark tax.

             (6)  If the Commissioner gives you an instalment rate for the first time during the second * instalment quarter in the income year, the amount of the instalment for the fourth instalment quarter in that year is worked out by subtracting:

                     (a)  the amount of your instalment for the earlier instalment quarter in that year;

from:

                     (b)  75% of the estimate of your * benchmark tax.

You receive instalment rate for the first time in third quarter

             (7)  If the Commissioner gives you an instalment rate for the first time during the third * instalment quarter in the income year, the amount of the instalment for the third instalment quarter in that year is 25% of the estimate of your * benchmark tax.

             (8)  If the Commissioner gives you an instalment rate for the first time during the third * instalment quarter in the income year, the amount of the instalment for the fourth instalment quarter in that year is worked out by subtracting:

                     (a)  the amount of your instalment for the earlier instalment quarter in that year;

from:

                     (b)  50% of the estimate of your * benchmark tax.

You receive instalment rate for the first time in fourth quarter

             (9)  If the Commissioner gives you an instalment rate for the first time during the fourth * instalment quarter in the income year, the amount of the instalment for that quarter is 25% of the estimate of your * benchmark tax.

45-415   Estimating your benchmark tax

             (1)  If you choose under paragraph 45-112(1)(b) to work out the amount of your instalment for an * instalment quarter in an income year on the basis of your estimate of your * benchmark tax for that income year, you must make the estimate on or before the day on which the instalment is due (disregarding subsection 45-112(3)).

             (2)  Having done so, you must use that estimate to work out the amount of that instalment. (You cannot later make another estimate for working out that amount.)

Note:          If your estimate leads you to pay an instalment that is too low, you may be liable to general interest charge under section 45-232.

             (3)  The Commissioner must also use that estimate to work out under this Subdivision the amount of each instalment:

                     (a)  that you are liable to pay for a later * instalment quarter in that income year; and

                     (b)  whose amount he or she must notify to you under paragraph 45-112(1)(c);

unless a later application of this subsection requires him or her to use a later estimate you make under subsection (1) of this section.

Note:          This means that if an estimate you have made is not appropriate for a later instalment quarter in the same income year, you should choose under paragraph 45-112(1)(b) to work out the amount of your instalment for that later quarter on the basis of a new estimate under this section. If the instalment that the Commissioner works out on the basis of the earlier estimate is too low, you may be liable to general interest charge under section 45-232.

45-420   Credit in certain cases where amount of instalment is nil

             (1)  You are entitled to claim a credit if the amount of your instalment for an * instalment quarter (the current quarter ) in an income year is nil because the amount worked out for the current quarter in accordance with section 45-410 or 45-412 (as appropriate) is negative. The amount of the credit is equal to that amount, expressed as a positive amount.

             (2)  A claim for a credit must be made in the * approved form on or before the day on which the instalment for the current quarter is due.

Note:          How the credit is applied is set out in Division 3 of Part IIB.

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

Table of sections

Trustees to whom this Part applies

45-450      Trustees to whom a single instalment rate is given

45-455      Trustees to whom several instalment rates are given

45-460      Rest of Subdivision applies only to multi-rate trustees

45-465      Meaning of instalment income

45-468      Multi-rate trustee may pay quarterly instalments

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

45-470      Working out instalment rate

45-473      Commissioner must notify you of notional tax

45-475      Working out your notional tax

45-480      Working out your adjusted taxable income

45-483      Meaning of reduced beneficiary's share and reduced no beneficiary's share

45-485      Working out your adjusted withholding income

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

45-525      When Commissioner works out benchmark instalment rate and benchmark tax

45-530      How Commissioner works out benchmark instalment rate

45-535      Working out your benchmark tax

Trustees to whom this Part appli e s

45-450   Trustees to whom a single instalment rate is given

             (1)  This Part applies to a trustee covered by any of items 4 to 8, and 12 and 13, of the table in section 9-1 of the Income Tax Assessment Act 1997 .

             (2)  Such a trustee is called a single-rate trustee .

             (3)  This Part applies to the trustee of a trust that is a * public trading trust, for an income year as if the trustee had a taxable income for the income year equal to the net income of the trust for the income year.

45-455   Trustees to whom several instalment rates are given

Trustee previously assessed in respect of beneficiary

             (1)  This Part also applies for an income year (the current year ), to the trustee of a trust, in respect of a beneficiary of the trust, if for a previous income year the trustee of the trust was liable to be assessed, and to pay tax, under subsection 98(1) or (2) of the Income Tax Assessment Act 1936 in respect of that beneficiary.

             (2)  However, this Part does not apply for the current year to the trustee in respect of that beneficiary if:

                     (a)  for that previous income year the trustee was liable to be assessed, and to pay tax, under subsection 98(1) of the Income Tax Assessment Act 1936 in respect of that beneficiary; and

                     (b)  that beneficiary will no longer be under a legal disability, or it is reasonable to expect that he or she will no longer be under a legal disability, at the end of the current year.

Trustee previously assessed under section 99 or 99A

             (3)  This Part also applies for an income year to the trustee of a trust if for a previous income year the trustee was liable to be assessed, and to pay tax, under section 99 or 99A of the Income Tax Assessment Act 1936 .

Multiple applications of this Part to the same trustee for the same income year

             (4)  The application of this Part for an income year, to the trustee of a trust, in respect of a beneficiary of the trust, because of subsection (1), is distinct from, and additional to, each of the following:

                     (a)  the application of this Part for that income year, to the trustee of the trust, in respect of another beneficiary;

                     (b)  the application of this Part for that income year, to the trustee of the trust, because of subsection (3);

                     (c)  the application of this Part for that income year to a beneficiary of the trust.

             (5)  The application of this Part for an income year, to the trustee of a trust, because of subsection (3), is distinct from, and additional to, each of the following:

                     (a)  the application of this Part for that income year, to the trustee of the trust, in respect of a beneficiary of the trust, because of subsection (1);

                     (b)  the application of this Part for that income year to a beneficiary of the trust.

             (6)  A multi-rate trustee is a trustee to whom this Part applies because of this section.

45-460   Rest of Subdivision applies only to multi-rate trustees

                   The rest of this Subdivision applies to you if, and only if, you are a * multi-rate trustee. (It applies instead of Subdivisions 45-J and 45-K.)

Note:          Except as provided in the rest of this Subdivision or elsewhere, this Part applies according to its terms to a multi-rate trustee. For example, a multi-rate trustee can become an annual payer under Subdivision 45-E.

45-465   Meani