Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994 - SECT 5

5. After Division 1 of Part VI of the Principal Act the following Division is
inserted:

"Division 1AA-Reportable payments system (RPS)

"Subdivision A-Object and outline Object

"220AA. The object of this Division is to facilitate the efficient collection
of tax by:

   (a)  providing for payers of certain payments ('reportable payments') to
        make deductions from those payments if the payee's tax file number is
        not quoted; and

   (b)  requiring payers of reportable payments to give reports to the
        Commissioner about those payments.

Outline

"220AB. The following table sets out an outline of this Division:
Topic                                       Provision(s)
Reportable payments
- definition                             Section 220AC
Deductions by payer from reportable
payments
- obligation to deduct                   section 220AF
- obligation to send deductions to
  Commissioner                           section 220AG

- receipts                               section 220AH

- exemption for pensioners               section 220AP

- refunds                                section 220AR

- civil penalties for breach of          sections 220AS to 220AW

deduction rules
- civil protection for payers            section 220AX

- recovery by Commissioner               section 220AY

- tax credits                            sections 220AZ to 220AZC
Reports by payer to Commissioner
- statements accompanying                section 220AI

deductions
- annual reports                         section 220AJ

- retention requirements                 section 220AK
Quotation of tax file number by payee
- method                                 section 220AL

- tax file number declarations           sections 220AM to 220AO

- payer to send declaration forms to     section 220AQ

Commissioner Pensioners
- exemption                              section 220AP

- payer to send declaration forms to     section 220AQ

Commissioner

                        "Subdivision B-Interpretation
Interpretation

"220AC. In this Division:
'arrangement' means any agreement, arrangement, understanding, promise or
undertaking, whether express or implied, and whether or not enforceable, or
intended to be enforceable, by legal proceedings; Note: This definition is
only used in section 220AQ.
'exempt inter-corporate payment' means a payment made by a company (other than
in the capacity of trustee) to another company (other than in the capacity of
trustee) where, at the time of the payment:

   (a)  one of those companies is a subsidiary of the other company; or

   (b)  each of those companies is a subsidiary of a third company; Note: This
        definition is only used in paragraph (e) of the definition of
        'reportable payment'.
'government body' means the Commonwealth, a State, a Territory or an authority
of the Commonwealth, a State or a Territory;
'payee' means a person who receives, or is entitled to receive, a reportable
payment;
'payer' means a person who makes, or has made, a reportable payment;
'payment' has a meaning affected by section 220AD;
'pensioner exemption declaration' has the meaning given by section 220AP;
'pensioner exemption declaration form' has the meaning given by section 220AP;
'person' means any of the following:

   (a)  a company;

   (b)  a partnership;

   (c)  a person in a particular capacity of trustee;

   (d)  a government body;

   (e)  any other person; Note 1: Section 220AZF sets out additional rules
        about partnerships. Note 2: Section 220AZG sets out additional rules
        about unincorporated companies.
'reportable payment' means a payment that:

   (a)  is declared by the regulations to be a reportable payment for the
        purposes of this Division; and

   (b)  is assessable income; and

   (c)  is not a payment of salary or wages within the meaning of section
        221A; and

   (d)  is not a prescribed payment within the meaning of section 221YHA; and

   (e)  is not an exempt inter-corporate payment; Note: 'Exempt
        inter-corporate payment' is defined by this section.
'signed' has the meaning given by section 220AE;
'subsidiary' has the same meaning as in section 221ED; Note: This definition
is only used in paragraphs (a) and (b) of the definition of 'exempt
inter-corporate payment'.
'tax file number' has the meaning given by section 202A;
'tax file number declaration' has the meaning given by section 220AM;
'tax file number declaration form' has the meaning given by section 220AM.

Money not actually paid to a person

"220AD. For the purposes of this Division, if money is not actually paid to a
person but is reinvested, accumulated, capitalised or otherwise dealt with on
behalf of the person, or as the person directs, the money is taken to be paid
to the person when it is so reinvested, accumulated, capitalised or otherwise
dealt with.

Signing of documents Natural persons

"220AE.(1) For the purposes of this Division, a natural person is taken to
have signed a document if, and only if, the document is signed by:

   (a)  the person; or

   (b)  a person declared by the regulations to be a signatory for the
        purposes of this subsection.

Persons other than natural persons

"(2) For the purposes of this Division, a person other than a natural person
is taken to have signed a document if, and only if, the document is signed by
a person declared by the regulations to be a signatory for the purposes of
this subsection.



"Subdivision C-Payer of reportable payment must make deduction
if payee's tax file number not quoted Deduction from reportable payment if
payee's tax file number not quoted When section applies

"220AF.(1) This section applies if:

   (a)  a payer makes a reportable payment to a payee; and

   (b)  the payee has not quoted his or her tax file number to the payer in
        connection with the payment; and

   (c)  the payment is made on or after 1 December 1994. Note 1: See section
        220AL for the method of quoting tax file numbers. Note 2: The making
        of a pensioner exemption declaration is an alternative to quotation of
        a tax file number-see section 220AP.

Deduction

"(2) The payer must deduct:

   (a)  48.4% of the payment; or

   (b)  if another percentage is specified in regulations made for the
        purposes of this subsection-that percentage of the payment. If working
        out the relevant percentage results in an amount of dollars and cents,
        the cents are to be disregarded.

Offence

"(3) A person (other than a government body) who contravenes this section is
guilty of an offence punishable on conviction by a maximum fine of 10 penalty
units. Note: See section 220AS for an alternative civil penalty for
contravening this section.

Deductions to be sent to the Commissioner Deductions to be sent

"220AG.(1) A payer who makes one or more reportable payments in a month must
send together to the Commissioner all amounts deducted under this Subdivision
from the payments. The amounts must be sent in sufficient time for them to be
received by the Commissioner in the ordinary course of events within:

   (a)  14 days after the end of the month; or

   (b)  such longer period as the Commissioner allows.

Offence

"(2) A person (other than a government body) who contravenes this section is
guilty of an offence punishable on conviction by imprisonment for a maximum
period of 12 months. In addition, the court may order the person to pay to the
Commissioner, as a penalty, an amount not greater than the total of the
amounts required to be deducted under this Subdivision from the reportable
payments to which the contravention relates. Note: See section 220AT for an
alternative civil penalty for contravening this section.



"Subdivision D-Payers' reporting and record-keeping obligations Obligation to
issue receipt for deduction When section applies

"220AH.(1) This section applies if a payer deducts an amount under this
Division from a reportable payment.

Receipt to be given

"(2) The payer must give the payee, at the time of the payment or as soon as
practicable afterwards, a written receipt, invoice or similar document setting
out:

   (a)  the payer's name and address; and

   (b)  the payee's name (if known to the payer); and

   (c)  the payee's address (if known to the payer); and

   (d)  the date on which the payment was made; and

   (e)  the amount of the payment; and

   (f)  the amount deducted.

Receipt to be in English and signed

"(3) A document given by a payer under subsection (2) must be:

   (a)  in the English language; and

   (b)  signed by the payer. Penalty: 1 penalty unit.

Deductions sent to Commissioner to be accompanied by a statement When section
applies

"220AI.(1) This section applies if a payer sends an amount to the Commissioner
under section 220AG.

Statement to be completed and sent to Commissioner

"(2) The payer must:

   (a)  before sending the amount, complete and sign a statement giving
        information in relation to the deductions concerned; and

   (b)  make a copy of the statement; and

   (c)  send the statement to the Commissioner with the amount. Note: Section
        220AK deals with retention of the copies.

Form of statement

"(3) The statement must be in a form approved by the Commissioner. Penalty: 20
penalty units.

Annual report Requirements for annual report

"220AJ.(1) A payer who makes one or more reportable payments during a
financial year must:

   (a)  send to the Commissioner a written report setting out, in respect of
        each payee:

        (i)    the payee's tax file number (if quoted to the payer); and

        (ii)   if the payee's tax file number was not quoted to the payer but
               the payee made a pensioner exemption declaration to the payer:

                (A)  a statement to that effect; and

                (B)  the type of pension or benefit specified in the pensioner
                     exemption declaration form concerned; and

        (iii)  the payee's name (if known to the payer); and

        (iv)   the payee's address (if known to the payer); and

        (v)    the total amount of the reportable payments made by the payer
               to the payee during the financial year; and

        (vi)   the total amount (if any) deducted by the payer under this
               Division from those payments; and

   (b)  make a copy of the report. Note: Section 220AK deals with retention of
        the copies.

Time limit

"(2) A report under subsection (1) relating to a financial year must be given
to the Commissioner within 2 months after the end of that financial year or
before such later date as the Commissioner allows.

Form of report

"(3) The report must be in a form approved by the Commissioner.

Section not to apply to pre-1 December 1994 payments

"(4) This section does not apply to a reportable payment made before 1
December 1994. Penalty: 20 penalty units.

Retention of statement and annual report Retention of statement

"220AK.(1) A person who makes a copy of a statement under paragraph
220AI(2)(b) in relation to a particular month must retain the copy for at
least 5 years after the end of the financial year in which that month
occurred.

Retention of annual report

"(2) A person who makes a copy of a report under paragraph 220AJ(1)(b) in
relation to a financial year must retain the copy for at least 5 years after
the end of the financial year. Penalty: 20 penalty units.



"Subdivision E-How payees can quote their tax file numbers Method of quoting
tax file number

"220AL. A payee is taken to have quoted his or her tax file number to a payer
in connection with a reportable payment if a tax file number declaration made
to the payer by the payee is in force when the payment is made. Note: See
subsection 220AM(2) for the definition of 'making a tax file number
declaration'.

Meaning of "tax file number declaration" Tax file number declaration form

"220AM.(1) A 'tax file number declaration form' is a document, in a form
approved by the Commissioner for the purposes of this section, that (in
addition to anything else that it requires or permits) enables the person
completing the form to state his or her tax file number.

Making a tax file number declaration

"(2) If a person (the 'first person') completes the form and gives it to
another person, the first person is said to make a 'tax file number
declaration' to the other person at the time when the form is given. Note: The
first person would normally be a payee and the other person would normally be
a payer.

When tax file number declaration in force When declaration in force

"220AN.(1) A tax file number declaration made by a person (the 'first person')
to another person (the 'second person') is in force at all times after it is
made until any of the following happens:

   (a)  29 days pass after the declaration is made without an obligation being
        imposed on the second person under section 220AQ in relation to the
        tax file number declaration form concerned;

   (b)  one year passes after the second person makes a reportable payment to
        the first person (being a payment made when the declaration is in
        force) without the first person again becoming entitled to receive a
        reportable payment from the second person;

   (c)  the first person makes another tax file number declaration to the
        second person;

   (d)  the Commissioner, by notice in the Gazette, determines that:

        (i)    all tax file number declarations cease to be in force; or

        (ii)   a specified class of tax file number declarations that includes
               the particular tax file number declaration ceases to be in
               force;

   (e)  the declaration ceases to be in force because of subsection (2). Note:
        The first person would normally be a payee and the second person would
        normally be a payer.

Cancellation-no tax file number

"(2) A tax file number declaration ceases to be in force if:

   (a)  the Commissioner is satisfied that the tax file number stated in the
        declaration form:

        (i)    has been cancelled since the form was given; or

        (ii)   is for any other reason not the first person's tax file number;
               and

   (b)  the Commissioner is not satisfied that the first person has a tax file
        number; and

   (c)  the Commissioner, by written notice given to the second person and the
        first person:

        (i)    informs them accordingly; and

        (ii)   states that the declaration ceases to be in force on a
               specified day (which must not be earlier than the day on which
               the notice is given to the first person). In such a case, the
               declaration ceases to be in force on the day specified in the
               notices.

Notification of decisions

"(3) If the Commissioner gives the first person a notice under subsection (2),
the Commissioner must, together with the notice, give the first person a
written statement of the reasons for the decision to give the notice.

Commissioner may correct tax file number set out in tax file number
declaration form

"220AO.(1) If:

   (a)  the Commissioner is satisfied that the tax file number stated in a tax
        file number declaration form:

        (i)    has been cancelled or withdrawn since the form was given; or

        (ii)   is otherwise wrong; and

   (b)  the Commissioner is satisfied that the person who gave the form (the
        'first person') has a tax file number; the Commissioner may give the
        person to whom the declaration was made (the 'second person') written
        notice of the incorrect statement and of the correct tax file number.
        Note: The first person would normally be a payee and the second person
        would normally be a payer.



"(2) If the Commissioner does so, the second person must, in any document
under this Division requiring the first person's tax file number that the
second person completes after that time (before another tax file number
declaration is made by the first person to the second person), state that
correct tax file number.



"Subdivision F-Making of pensioner exemption declaration
to be alternative to quotation of tax file number Making of pensioner
exemption declaration to be alternative to quotation of tax file number
Pensions and benefits to which this section applies

"220AP.(1) This section applies to the following pensions and benefits:

   (a)  an age pension under Part 2.2 of the Social Security Act 1991;

   (b)  a disability support pension under Part 2.3 of that Act;

   (c)  a wife pension under Part 2.4 of that Act;

   (d)  a carer pension under Part 2.5 of that Act;

   (e)  a sole parent pension under Part 2.6 of that Act;

   (f)  a widow B pension under Part 2.8 of that Act;

   (g)  a special benefit under Part 2.15 of that Act;

   (h)  a special needs pension under Part 2.16 of that Act;

   (i)  a pension under Part III of the Veterans' Entitlements Act 1986.

Making of pensioner exemption declaration

"(2) For the purposes of this Division, a payee is taken to have quoted his or
her tax file number to a payer in connection with a reportable payment if a
pensioner exemption declaration made to the payer by the payee is in force
when the payment is made. However, this rule does not apply for the purposes
of section 220AJ (which deals with annual reports by payers). Note: See
subsection (4) for the definition of 'making a pensioner exemption
declaration'.

Pensioner exemption declaration form

"(3) A 'pensioner exemption declaration form' is a document, in a form
approved by the Commissioner for the purposes of this section, that (in
addition to anything else that it requires or permits) enables the person
completing the form to state that he or she is being paid a pension or
benefit.

Making a pensioner exemption declaration

"(4) If a person (the 'first person') completes the form and gives it to
another person, the first person is said to make a 'pensioner exemption
declaration' to the other person at the time when the form is given. Note: The
first person would normally be a payee and the other person would normally be
a payer.

When declaration in force

"(5) A pensioner exemption declaration made by a person (the 'first person')
to another person (the 'second person') is in force at all times after it is
made until any of the following happens:

   (a)  29 days pass after the declaration is made without an obligation being
        imposed on the second person under section 220AQ in relation to the
        pensioner exemption declaration form concerned;

   (b)  one year passes after the second person makes a reportable payment to
        the first person (being a payment made when the declaration is in
        force) without the first person again becoming entitled to receive a
        reportable payment from the second person;

   (c)  the first person makes another pensioner exemption declaration to the
        second person;

   (d)  the Commissioner, by notice in the Gazette, determines that:

        (i)    all pensioner exemption declarations cease to be in force; or

        (ii)   a specified class of pensioner exemption declarations that
               includes the particular pensioner exemption declaration ceases
               to be in force;

   (e)  the first person makes a tax file number declaration to the second
        person;

   (f)  the first person ceases to be paid a pension or benefit. Note: The
        first person would normally be a payee and the second person would
        normally be a payer.

Commissioner may tell payers and payees about cessation of pension/benefit

"(6) If a pensioner exemption declaration made by a person (the 'first
person') to another person (the 'second person') ceases to be in force because
of paragraph (5)(f), the Commissioner may tell the first person and the second
person that the declaration has so ceased to be in force. The Commissioner may
also explain the reasons for the cessation and the effect of the cessation.
Note: The first person would normally be a payee and the second person would
normally be a payer.

Payees to tell payers about cessation of entitlement to pension/benefit

"(7) If a pensioner exemption declaration made by a person (the 'first
person') to another person (the 'second person') ceases to be in force because
of paragraph (5)(f), the first person must tell the second person, in writing,
about the cessation as soon as practicable after the cessation occurs. Penalty
for contravention of this subsection: 1 penalty unit. Note: The first person
would normally be a payee and the second person would normally be a payer.



"Subdivision G-Payer to send tax file number declaration form
or pensioner exemption declaration form to Commissioner Obligations of
payer-tax file number declaration form or pensioner exemption declaration form
Form to be sent to Commissioner-prior dealings with payee

"220AQ.(1) If:

   (a)  a tax file number declaration form or pensioner exemption declaration
        form is given by a person (the 'first person') to another person (the
        'second person'); and

   (b)  at any time during the period of 12 months ending at the time of
        receipt by the second person of the form, there was in existence an
        arrangement that gave rise, or was capable of giving rise, to the
        making of a reportable payment by the second person to the first
        person (whether on fulfilment of a condition or otherwise); the second
        person must:

   (c)  complete the part of the form required to be completed by the second
        person; and

   (d)  sign the form; and

   (e)  make a copy of the form; and

   (f)  send the form to the Commissioner in sufficient time for it to be
        received by the Commissioner in the ordinary course of events within:

        (i)    14 days after receipt by the second person of the form; or

        (ii)   such longer period as the Commissioner allows. Note 1: The
               first person would normally be a payee and the second person
               would normally be a payer. Note 2: Section 220AC defines
               'arrangement'.

Form to be sent to Commissioner-no prior dealings with payee

"(2) If:

   (a)  a tax file number declaration form or pensioner exemption declaration
        form is given by a person (the 'first person') to another person (the
        'second person'); and

   (b)  at no time during the period of 12 months ending at the time of
        receipt by the second person of the form was there in existence an
        arrangement that gave rise, or was capable of giving rise, to the
        making of a reportable payment by the second person to the first
        person (whether on fulfilment of a condition or otherwise); and

   (c)  during the period of 28 days after the receipt by the second person of
        the form, the second person made one or more reportable payments to
        the first person; the second person must:

   (d)  complete the part of the form required to be completed by the second
        person; and

   (e)  sign the form; and

   (f)  make a copy of the form; and

   (g)  send the form to the Commissioner in sufficient time for it to be
        received by the Commissioner in the ordinary course of events within:

        (i)    14 days after the earliest time when any of the payments
               mentioned in paragraph (c) were made; or

        (ii)   such longer period as the Commissioner allows. Note: Section
               220AC defines 'arrangement'.

Retention of copy of form

"(3) A person who makes a copy of a form under paragraph (1)(e) or (2)(f) must
retain that copy until the second 1 July after the day on which the
declaration concerned ceases to be in force. Penalty: 10 penalty units.



"Subdivision H-Refund of deductions in special circumstances Commissioner may
refund deductions When section applies

"220AR.(1) This section applies if a deduction was made under this Division
from a reportable payment to a person.

Application for refund

"(2) The person may apply for a refund of the whole or a part of the
deduction.

Application to be in writing

"(3) The application is to be in writing and must be given to the
Commissioner.

Criteria for granting application

"(4) The Commissioner must grant the application if the Commissioner is
satisfied that:

   (a)  there are special circumstances that warrant granting the application;
        and

   (b)  it would be fair and reasonable to grant the application having regard
        to:

        (i)    the purposes of this Division; and

        (ii)   the nature of the act or omission that resulted in the
               deduction being made; and

   (iii) such other matters (if any) as the Commissioner thinks fit.

No credit for refunded amounts

"(5) A person is not entitled to a credit under this Division in respect of an
amount refunded under this section.



"Subdivision I-Civil penalties for failure to make deductions
from reportable payments and for failure to send
deductions to the Commissioner Penalty for failure to make deductions from
reportable payments When section applies

"220AS.(1) This section applies if a person refuses or fails, at the time of
making a reportable payment to a payee, to deduct from the payment the amount
required to be deducted under this Division.

Persons other than government bodies

"(2) If the person is not a government body, the person is liable to pay to
the Commissioner, by way of penalty:

   (a)  an amount (the 'undeducted amount') equal to the amount that the
        person refused or failed to deduct; and

   (b)  an amount at the rate of 16% per annum of so much of the undeducted
        amount as remains unpaid (this amount is computed from the end of the
        period within which the person would have been required to pay the
        amount of the deduction to the Commissioner if it were assumed that
        the person had deducted the amount required to be deducted under this
        Division).

Government bodies

"(3) If the person is a government body other than the Commonwealth, the
person is liable to pay to the Commissioner, by way of penalty, an amount at
the rate of 16% per annum of the amount that the person refused or failed to
deduct. This penalty is payable in respect of the period:

   (a)  beginning at the time when the reportable payment was made; and

   (b)  ending on 30 June in the financial year in which the reportable
        payment was made. Penalty for failure to send deductions to
        Commissioner

When section applies

"220AT.(1) This section applies if an amount (the 'principal amount') payable
to the Commissioner under section 220AG by a person remains unpaid after the
end of the period within which it is required to be paid.

Principal amount continues to be payable

"(2) The principal amount continues to be payable by the person to the
Commissioner.

Persons other than government bodies

"(3) If the person is not a government body, the person is liable to pay to
the Commissioner, by way of penalty:

   (a)  an amount (the 'relevant penalty amount') equal to 20% of the
        principal amount; and

   (b)  an amount at the rate of 16% per annum of the sum of:

        (i)    so much of the principal amount as remains unpaid; and

        (ii)   so much of the relevant penalty amount as remains unpaid;
               computed from the end of that period.

Government bodies

"(4) If the person is a government body other than the Commonwealth, the
person is liable to pay to the Commissioner, by way of penalty, an amount at
the rate of 16% per annum on so much of the principal amount as remains
unpaid, computed from the end of that period.

Commissioner may remit penalties for failure to deduct or for failure to send
deductions to Commissioner When section applies

"220AU.(1) This section applies to a penalty payable by a person under section
220AS or 220AT.

Power to remit

"(2) The Commissioner may remit the whole or a part of the penalty.

Criteria for remission-interest-based penalties

"(3) If the penalty is payable by a person under paragraph 220AS(2)(b),
220AT(3)(b) or subsection 220AT(4) in relation to another amount that has not
been paid (the 'principal amount'), the Commissioner may only remit the whole
or a part of the penalty if:

   (a)  the Commissioner is satisfied that:

        (i)    the circumstances that contributed to the delay in payment of
               the principal amount were not due to, or caused directly or
               indirectly by, an act or omission of the person; and

        (ii)   the person has taken reasonable action to mitigate, or mitigate
               the effects of, those circumstances; or

   (b)  the Commissioner is satisfied that:

        (i)    the circumstances that contributed to the delay in payment of
               the principal amount were due to, or caused directly or
               indirectly by, an act or omission of the person; and

        (ii)   the person has taken reasonable action to mitigate, or mitigate
               the effects of, those circumstances; and

        (iii)  having regard to the nature of those circumstances, it would be
               fair and reasonable to remit the whole or the part of the
               penalty; or

   (c)  the Commissioner is satisfied that there are special circumstances
        because of which it would be fair and reasonable to remit the penalty
        or the part of the penalty.

Notification of decisions

"(4) If the Commissioner makes a decision:

   (a)  to remit part only of a penalty payable under paragraph 220AS(2)(a),
        subsection 220AS(3) or paragraph 220AT(3)(a); or

   (b)  not to remit any part of such a penalty; the Commissioner must give
        written notice of the decision to the person liable to pay the
        penalty.

Reduction of late payment penalty where judgment debt carries interest
Principal amount

"220AV.(1) For the purposes of this section, each of the following amounts is
a 'principal amount':

   (a)  an amount of the kind referred to in paragraph 220AS(2)(a) as the
        undeducted amount;

   (b)  an amount of the kind referred to in subsection 220AT(1) as the
        principal amount;

   (c)  an amount of the kind referred to in paragraph 220AT(3)(a) as the
        relevant penalty amount.

When section applies

"(2) This section applies if judgment is given by, or entered in, a court for
the payment of:

   (a)  the whole or a part of a principal amount; or

   (b)  an amount that includes the whole or a part of a principal amount.

Principal amount still due and payable

"(3) A person's liability to a penalty (the 'interest-based penalty') under
paragraph 220AS(2)(b), 220AT(3)(b) or subsection 220AT(4) is to be worked out
on the basis that the principal amount or the part of the principal amount, as
the case may be, does not cease to be due and payable only because of the
giving or entering of the judgment.

Reduction of interest-based penalties

"(4) If the judgment debt carries interest, the interest-based penalty that
would otherwise be payable in relation to the principal amount or the part of
the principal amount, as the case may be, is to be reduced by the amount
worked out using the formula:
Interest X Whole or part of principal amount
Judgment debt where:
'Interest' means the amount of the interest;
'Whole or part of principal amount' means the principal amount, or the part of
the principal amount, as the case may be;
'Judgment debt' means the amount of the judgment debt.

Civil penalties to be alternative to prosecution for certain offences

"220AW.(1) If:

   (a)  apart from this subsection, an amount is payable, by way of penalty,
        by a person to the Commissioner under this Division because of an act
        or omission of the person; and

   (b)  a prosecution is instituted against the person for an offence against
        this Division constituted by the act or omission; the amount is not
        payable unless and until the prosecution is withdrawn.

"(2) If:

   (a)  a person is liable to pay, by way of penalty, an amount (the 'penalty
        amount') to the Commissioner under this Division because of an act or
        omission of the person; and

   (b)  an amount (the 'paid amount') is paid, or applied by the Commissioner,
        in total or partial discharge of the liability; and

   (c)  a prosecution is instituted against the person for an offence against
        this Division constituted by the act or omission; then:

   (d)  the paid amount is to be refunded to the person or applied by the
        Commissioner in total or partial discharge of a tax liability of the
        person (within the meaning of section 2 of the Taxation Administration
        Act 1953); and

   (e)  if the prosecution is withdrawn, the person again becomes liable to
        pay the penalty amount.



"Subdivision J-Payers to have civil protection for making deductions Payers to
have civil protection for making deductions

"220AX. A person is discharged from all liability to pay, or account for, a
deduction to any person other than the Commissioner if:

   (a)  the person makes the deduction from a reportable payment; and

   (b)  the deduction was made, or purports to have been made, for the
        purposes of section 220AF.



"Subdivision K-Recovery of amounts payable under this Division Recovery of
amounts by Commissioner Recoverable amount

"220AY.(1) In this section:
'recoverable amount' means any of the following amounts:

   (a)  an amount payable to the Commissioner under this Division by a person
        other than the Commonwealth;

   (b)  the unpaid amount of an estimate under section 222AGA that relates to
        a liability under this Division;

   (c)  a penalty payable under Subdivision E of Division 8 in relation to
        such an estimate;

   (d)  an amount that is due and payable under an agreement under section
        222ALA that relates to:

        (i)    a liability under this Division; or

        (ii)   a liability to pay an estimate relating to a liability under
               this Division; even if the agreement also relates to a
               liability that is not of a kind referred to in subparagraph (i)
               or (ii);

   (e)  a penalty payable under Subdivision B of Division 9 in relation to a
        company's liability under this Division;

   (f)  a penalty payable under Subdivision C of Division 9 in relation to an
        estimate relating to a company's liability under this Division;

   (g)  a penalty payable under Subdivision D of Division 9 in relation to a
        company's liability to pay an amount of the kind mentioned in
        paragraph (d).

Debt

"(2) A recoverable amount is a debt due to the Commonwealth.

Payable to Commissioner

"(3) A recoverable amount is payable to the Commissioner.

Recovery in court

"(4) A recoverable amount may be sued for and recovered in a court of
competent jurisdiction by the Commissioner or a Deputy Commissioner suing in
his or her official name.

Criminal proceedings-ancillary order for payment

"(5) If proceedings for an offence against this Division are brought against
the person by whom a recoverable amount is payable, the court before which the
proceedings are brought may order the person to pay the amount to the
Commissioner.

Averments

"(6) The provisions of section 8ZL of the Taxation Administration Act 1953
(which deals with averments) apply in proceedings for the recovery of a
recoverable amount in a corresponding way to the way in which they apply in
relation to a prosecution for a prescribed taxation offence within the meaning
of Part III of that Act.

Evidentiary certificate

"(7) In an action for the recovery of a recoverable amount, a written
certificate stating that the sum specified in the certificate was, as at the
date of the certificate, due by a specified person to the Commonwealth in
respect of a recoverable amount is prima facie evidence of the matters stated
in the certificate. The certificate must be signed by the Commissioner, a
Second Commissioner, a Deputy Commissioner or a delegate of the Commissioner.

Multiple amounts owing

"(8) If:

   (a)  2 or more recoverable amounts are payable by a person; and

   (b)  an amount (the 'eligible payment') is paid to the Commissioner in
        respect of one or more of those recoverable amounts; and

   (c)  the sum of the recoverable amounts payable exceeds the eligible
        payment; the Commissioner may:

   (d)  apply the eligible payment in partial discharge of the sum of the
        recoverable amounts payable; and

   (e)  recover as a debt due to the Commonwealth the amount by which the sum
        of the recoverable amounts payable exceeds the eligible payment. The
        Commissioner may do those things in spite of any direction to the
        contrary by or on behalf of the person by whom the recoverable amounts
        are payable or the person making the eligible payment.

Application of Divisions 8 and 9

"(9) If the Commissioner applies or recovers an amount under subsection (8),
the Commissioner may make a written determination about how the amount is to
be taken, for the purposes of Divisions 8 and 9, to have been applied towards
discharging any one or more of the recoverable amounts referred to in
paragraph (8)(a). A determination has effect accordingly.

Effect of certain declarations and affidavits under Division 8

"(10) In making a statement (whether orally or in writing and whether or not
under oath) for a purpose connected with proceedings to recover a recoverable
amount from a person (the 'debtor'), the maker of the statement (who may be
the debtor) may, in so far as the statement relates to a question about
whether the debtor has a defence, ignore the possibility that a statutory
declaration relating to an estimate may be given to the Commissioner, or an
affidavit relating to an estimate may be filed, under Subdivision B, C or D of
Division 8.

Interpretation

"(11) An expression used in paragraphs (1)(b) to (g) has the same meaning as
in Division 8.



"Subdivision L-Tax credits for deductions from reportable payments Entitlement
to credit-payee neither a partnership nor a trustee

"220AZ. If:

   (a)  any deductions have been made under this Division from reportable
        payments made in a year of income to a person (other than a
        partnership or the trustee of a trust estate); and

   (b)  an assessment has been made of the tax payable, or the Commissioner is
        satisfied that no tax is payable, by the person in relation to the
        year of income; the person is entitled to a credit of an amount equal
        to the deductions.

Entitlement to credit-payee a partnership

"220AZA. If:

   (a)  any deductions have been made under this Division from reportable
        payments made in a year of income to a partnership; and

   (b)  the return of income of the partnership for the year of income has
        been lodged with the Commissioner; and

   (c)  an assessment has been made of the tax payable, or the Commissioner is
        satisfied that no tax is payable, in relation to the year of income by
        a partner in the partnership whose individual interest in the net
        income or partnership loss of the partnership is wholly or partly
        attributable to the reportable payments; the partner is entitled to a
        credit worked out using the formula:
        Deductions       X      Individual interest

Net income/partnership loss where:
'Deductions' means the sum of the deductions;
'Individual interest' means so much of the individual interest as is
attributable to the reportable payments;
'Net income/partnership loss' means so much of the net income or partnership
loss as is attributable to the reportable payments.

Entitlement to credit-payee a trustee When section applies

"220AZB.(1) This section applies if any deductions are made under this
Division from reportable payments made during a year of income to a trustee of
a trust estate.

Trusts-section 97

"(2) If:

   (a)  a share of the net income of the trust estate is included in the
        assessable income of a beneficiary in the trust estate under section
        97, being a share that is wholly or partly attributable to the
        reportable payments; and

   (b)  an assessment has been made of the tax payable, or the Commissioner is
        satisfied that no tax is payable, by the beneficiary in relation to
        the year of income; the beneficiary is entitled to a credit equal to
        the amount worked out using the formula:
                Deductions        X          Share of net income

Net income where:
'Deductions' means the sum of the deductions;
'Share of net income' means so much of the share of the net income of the
trust estate as is attributable to the reportable payments;
'Net income' means so much of the net income of the trust estate as is
attributable to the reportable payments.

Trusts-section 98

"(3) If:

   (a)  the trustee is liable to be assessed under section 98 in respect of a
        share of the net income of the trust estate to which a beneficiary is
        presently entitled, being a share that is wholly or partly
        attributable to the reportable payments; and

   (b)  an assessment has been made of the tax payable, or the Commissioner is
        satisfied that no tax is payable, by the trustee in respect of that
        share; the trustee is entitled to a credit equal to the amount worked
        out using the formula:
                Deductions       X        Share of net income

Net income where:
'Deductions' means the sum of the deductions;
'Share of net income' means so much of the share of the net income of the
trust estate as is attributable to the reportable payments;
'Net income' means so much of the net income of the trust estate as is
attributable to the reportable payments.

Trusts-section 99 or 99A

"(4) If:

   (a)  the trustee is liable to be assessed under section 99 or 99A in
        respect of the net income, or a part of the net income, of the trust
        estate and that net income or part is wholly or partly attributable to
        the reportable payments; and

   (b)  an assessment has been made of the tax payable, or the Commissioner is
        satisfied that no tax is payable, by the trustee under those sections
        in respect of that net income or part; the trustee is entitled to a
        credit equal to the amount worked out using the formula:
                  Deductions       X        Part of net income

Net income where:
'Deductions' means the sum of the deductions;
'Part of net income' means so much of the net income or part of the net income
in respect of which the trustee is so liable to be assessed as is attributable
to the reportable payments;
'Net income' means so much of the net income of the trust estate as is
attributable to the reportable payments.

Trusts-no net income

"(5) If there is no net income of the trust estate of the year of income, the
trustee is entitled to a credit equal to the sum of the deductions.

Application of credits Credit is a debt owing by the Commonwealth

"220AZC.(1) Subject to this section, the amount of the credit to which a
person is entitled under this Division is a debt due and payable to that
person by the Commissioner on behalf of the Commonwealth.

Application of credit-cases not involving a trustee assessed to tax

"(2) If a person is entitled to a credit under section 220AZ, 220AZA or
subsection 220AZB(2), the Commissioner must:

   (a)  if the amount of the credit does not exceed the tax payable by the
        person under an assessment in relation to the year of income in which
        the deductions to which the credit relates were made-apply the amount
        of the credit in payment, or part payment, of that tax; and

   (b)  if the amount of the credit exceeds the tax payable-apply:

        (i)    so much of the amount of the credit as does not exceed the tax
               in payment of the tax; and

        (ii)   so much of the excess as does not exceed the amount of any
               other tax payable by the person in payment, or part payment, of
               that other tax.

Application of credit-trustee assessed under section 98

"(3) If the trustee of a trust estate is entitled to a credit under subsection
220AZB(3) in relation to a share of a beneficiary of the net income of the
trust estate of a year of income, the Commissioner must:

   (a)  if the amount of the credit does not exceed the tax payable in respect
        of that share-apply the amount of the credit in payment, or part
        payment, of that tax; and

   (b)  if the amount of the credit exceeds the tax payable in respect of that
        share-apply:

        (i)    so much of the amount of the credit as does not exceed the tax
               payable in respect of that share in payment of the tax; and

        (ii)   so much of the excess as does not exceed the amount of any tax
               payable by the trustee under section 98 in respect of a share
               of the beneficiary of the net income of the trust estate of any
               other year of income in payment, or part payment, of that other
               tax.

Application of credit-trustee assessed under section 99 or 99A

"(4) If the trustee of a trust estate is entitled to a credit under subsection
220AZB(4) in relation to the net income or a part of the net income of the
trust estate, the Commissioner must:

   (a)  if the amount of the credit does not exceed the tax payable under
        section 99 or 99A in respect of that net income or part-apply the
        amount of the credit in payment, or part payment, of that tax; and

   (b)  if the amount of the credit exceeds the tax payable under section 99
        or 99A in respect of that net income or part-apply:

        (i)    so much of the amount of the credit as does not exceed that tax
               in payment of that tax; and

        (ii)   so much of the excess as does not exceed the amount of any tax
               payable by the trustee under section 99 or 99A in respect of
               the net income or a part of the net income of the trust estate
               of any other year of income in payment, or part payment, of
               that other tax.

Application of credit-no net income of trust

"(5) If the trustee of a trust estate is entitled to a credit under subsection
220AZB(5) in relation to deductions made in a year of income from reportable
payments made to the trustee, the Commissioner must:

   (a)  if the amount of the credit does not exceed the amount of any tax
        payable by the trustee under section 99 or 99A in respect of the net
        income or a part of the net income of the trust estate of any other
        year of income-apply the amount of the credit in payment, or part
        payment, of that tax; and

   (b)  if the amount of the credit exceeds the amount of any tax payable by
        the trustee under section 99 or 99A in respect of the net income or a
        part of the net income of the trust estate of any other year of
        income-apply so much of the amount of the credit as does not exceed
        that tax in payment of that tax.

Deemed payment of tax

"(6) If, under subsection (2), (3), (4) or (5), the Commissioner has applied
an amount of a credit in payment of an amount of tax payable by a person, the
person is taken to have paid the amount so applied in payment of the tax as
at:

   (a)  the time at which it was so applied; or

   (b)  such earlier time as the Commissioner determines.

Recovery of excess credits

"(7) If the amount, or the sum of the amounts, applied or paid by the
Commissioner as a credit to which a person is entitled under this Division
exceeds the amount of the credit to which the person is so entitled, the
Commissioner may recover the amount of the excess as if it were income tax due
and payable by the person.

Higher education contribution etc.

"(8) This section has effect subject to section 221ZY (which deals with higher
education contribution and student financial supplement).

Interpretation

"(9) In this section:

   (a)  a reference to tax payable by a person other than a trustee is a
        reference to an amount payable by the person to the Commonwealth under
        this Act; and

   (b)  a reference to tax payable by the trustee of a trust estate in respect
        of a share of a beneficiary of the net income of the trust estate of
        the year of income is a reference to any amount payable by the trustee
        to the Commonwealth under this Act in relation to the beneficiary in
        relation to the year of income; and

   (c)  a reference to tax payable by the trustee of a trust estate under
        section 99 or 99A in respect of the net income or a part of the net
        income of the trust estate of a year of income is a reference to any
        amount payable by the trustee to the Commonwealth under this Act in
        relation to the trust estate in relation to the year of income, other
        than an amount payable by the trustee in relation to a particular
        beneficiary.



"Subdivision M-Miscellaneous Power of Commissioner to obtain information

"220AZD. Section 264 applies, for the purposes of this Division, as if the
reference in paragraph (1)(b) of that section to a person's income or
assessment were a reference to a matter relevant to the administration or
operation of this Division. Note: Section 264 empowers the Commissioner to
obtain information.

Declarations

"220AZE. A form that is approved by the Commissioner for the purposes of this
Division may be required to contain a declaration by the person using the
form.

Application of this Division to partnerships

"220AZF.(1) This Division applies to a partnership as if the partnership were
a person, but it applies with the following changes:

   (a)  obligations that would be imposed on the partnership are imposed
        instead on each partner, but may be discharged by any of the partners;

   (b)  the partners are jointly and severally liable to pay an amount that
        would be payable by the partnership;

   (c)  any offence against this Division that would otherwise be committed by
        the partnership is taken to have been committed by each of the
        partners.

"(2) In a prosecution of a person for an offence that the person is taken to
have committed because of paragraph (1)(c), it is a defence if the person
proves that the person:

   (a)  did not aid, abet, counsel or procure the relevant act or omission;
        and

   (b)  was not 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 person).

Application of this Division to unincorporated companies

"220AZG.(1) This Division applies to an unincorporated company as if the
company were a person, but it applies with the following changes:

   (a)  obligations that would be imposed on the company are imposed instead
        on each member of the committee of management of the company, but may
        be discharged by any of those members;

   (b)  any offence against this Division that would otherwise be committed by
        the company is taken to have been committed by each member of the
        committee of management of the company.

"(2) In a prosecution of a person for an offence that the person is taken to
have committed because of paragraph (1)(b), it is a defence if the person
proves that the person:

   (a)  did not aid, abet, counsel or procure the relevant act or omission;
        and

   (b)  was not 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 person).

Review of decisions

"220AZH.(1) This section applies to:

   (a)  a decision of the Commissioner under any of the following provisions:

        (i)    subsection 220AN(2);

        (ii)   subsection 220AO(1);

        (iii)  section 220AR; and

   (b)  a decision of the Commissioner under section 220AU (other than a
        decision relating to a penalty payable under subsection 220AS(3)).

"(2) A person who is dissatisfied with a decision made in relation to the
person may object against the decision in the manner set out in Part IVC of
the Taxation Administration Act 1953.".