{"id":"F2026L00198","name":"Taxation Administration (PAYG Withholding Variation for Company Directors and Certain Office Holders) Legislative Instrument 2026","slug":"taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":443172,"registerId":"F2026L00198-fast-fetch-1775958081345","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Taxation Administration (PAYG Withholding Variation for Company Directors and Certain Office Holders) Legislative Instrument 2026","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n![Commonwealth Coat of Arms of Australia](image.001.jpeg)\n\n \n\nTaxation Administration (PAYG Withholding Variation for Company Directors and Certain Office Holders) Legislative Instrument 2026\n\nI, Will Day, Deputy Commissioner of Taxation, make the following legislative instrument.\n\nDated 25 February 2026\n\nWill Day\n\nDeputy Commissioner of Taxation\n\n \n\nContents\n\n1  Name\n\n2  Commencement\n\n3  Authority\n\n4  Definitions\n\n5  Schedules\n\n6  Withholding amount varied to nil\n\n7  Payment summary and STP reporting exemptions\n\nSchedule 1—Repeals\n\nPAYG Withholding Variation: Company Directors and Office Holders\n\n \n\n1  Name\n\n  This instrument is the Taxation Administration (PAYG Withholding Variation for Company Directors and Certain Office Holders) Legislative Instrument 2026.\n\n2  Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this instrument The day after this instrument is registered.\n\n\nNote: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n3  Authority\n\n  This instrument is made under sections 15-15 and 16-180, and subsection 389‑10(1) in Schedule 1 to the Act.\n\n4  Definitions\n\nNote: A number of expressions used in this instrument have the same meaning as in Schedule 1 to the Act. Expressions in Schedule 1 to the Act have the same meaning as in the Income Tax Assessment Act 1997 (see section 3AA of the Act). The following expressions are relevantly defined in section 995-1 of the Income Tax Assessment Act 1997:\n\n(a) company;\n\n(b) entity;\n\n(c) partnership;\n\n(d) payment summary.\n\n  In this instrument:\n\nAct means the Taxation Administration Act 1953.\n\nappointed director means a person who has been officially appointed to the position of a director (within the meaning of section 12-40 in Schedule 1 to the Act) of a company that is incorporated, regardless of the name that is given to that position. It does not include a person who is performing the duties of a director but has not been officially appointed to a position.\n\ncovered payment means a payment for which the withholding amount is varied under section 6.\n\n5  Schedules\n\n  Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n6  Withholding amount varied to nil\n\n  The amount that an entity (the first entity) must withhold from a payment it makes to an individual under section 12-40 or paragraph 12-45(1)(b), (c) or (d) in Schedule 1 to the Act is varied to nil, if:\n\n (a) the payment is made to the individual as:\n\n (i) an appointed director, where the first entity is a company that is incorporated;\n\n (ii) a member of the committee of management of the first entity, where the first entity is a company that is not incorporated; or\n\n (iii) a person covered by paragraph 12-45(1)(b), (c) or (d) in Schedule 1 to the Act;\n\n (b) the individual is required to pay the full amount of the payment to another entity (the second entity); and\n\n (c) the individual is:\n\n (i) an employee of the second entity; or\n\n (ii) an appointed director of the second entity, where the second entity is a company that is incorporated; or\n\n (iii) a partner in the second entity, where the second entity is a partnership.\n\n7  Payment summary and STP reporting exemptions\n\n (1) An entity is exempt from giving a payment summary required under section 16-155 in Schedule 1 to the Act or a part-year payment summary required under section 16-160 in Schedule 1 to the Act in respect of a covered payment.\n\n (2) An entity is exempt from notifying the Commissioner of amounts required to be notified under section 389-5 in Schedule 1 to the Act in respect of a covered payment.\n\n\n\n\nSchedule 1—Repeals\n\nPAYG Withholding Variation: Company Directors and Office Holders\n\n1  The whole of the instrument\n\nRepeal the instrument\n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":true,"description":"The instrument expressly repeals the earlier instrument of the same name (Schedule 1) and replaces withholding and reporting rules by varying certain PAYG withholding amounts to nil and exempting payment summary/STP notifications for those covered payments (ss 6–7). Because the text of the prior instrument is not provided here, specific increases or reductions in scope cannot be precisely identified from this instrument alone; the repeal indicates an intentional replacement of the prior regime (Schedule 1)."},"complexity_factors":["Conditional eligibility depends on relationships between the payer (first entity), the individual payee, and a separate recipient entity (second entity) (s 6).","Reliance on defined terms and external cross‑references (appointed director, sections 12-40 and 12-45 in Schedule 1 to the Act) increases interpretive steps (s 4; s 6).","The phrase “required to pay the full amount of the payment to another entity” creates a fact‑intensive compliance burden for payers to verify and document (s 6(b)).","Different corporate forms are treated differently (incorporated company versus unincorporated entity; committee of management distinction) requiring entity‑type checks (s 6(a)(i)–(ii)).","Reporting exemptions remove specific reporting steps (payment summaries and notifications under s 389‑5), but require administrators to update reporting systems and practices (s 7).","The instrument repeals a prior instrument of the same name, adding a legislative‑history dimension that may affect interpretation and application (Schedule 1).","Authority clauses reference multiple provisions of the Act (ss 15-15, 16-180, sub‑s 389‑10(1)), meaning interaction with broader PAYG/administration rules must be considered (s 3)."],"plain_english_summary":"This instrument sets PAYG withholding to nil for certain payments to appointed directors and similar office‑holders when the individual is required to pay the full amount on to another entity (section 6). It also exempts entities from issuing payment summaries and from notifying the Commissioner under Single Touch Payroll/section 389-5 for those covered payments (section 7). Payers must verify the person’s role and the pass‑through arrangement; recipients face changed tax‑collection and reporting incentives."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The instrument maintains a narrow, targeted scope consistent with its title and apparent original purpose. It addresses a specific administrative issue regarding PAYG withholding for directors and office holders acting as conduits for payments, without expanding into broader taxation matters."},"complexity_factors":["Short instrument with only 7 operative sections plus a repeal schedule","Minimal defined terms (only 4 explicit definitions in section 4, plus incorporated definitions from other Acts)","Single core operative provision (section 6) with a straightforward 3-part test","Simple cross-referencing to existing definitions in the Taxation Administration Act 1953 and Income Tax Assessment Act 1997 rather than creating new definitions","No nested exceptions or conditional logic beyond the basic 'if (a) and (b) and (c)' structure","Repeal schedule is a simple full repeal of a previous instrument"],"plain_english_summary":"This instrument exempts certain company directors and office holders from PAYG withholding when they immediately pass received payments to another entity of which they are an employee, director, or partner. It also removes the need for payment summaries and Single Touch Payroll reporting for those passthrough amounts. \n\nIt affects appointed directors, committee members of unincorporated companies, and similar office holders, preventing double withholding and reducing administrative burden by shifting tax reporting to the recipient entity."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-","history":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-/history","analysis":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-/analysis","conflicts":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-/conflicts","importantCases":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-/important-cases","documents":"/api/acts/taxation-administration-payg-withholding-variation-for-company-directors-and-certain-office-holders-/documents"}}