Commonwealth legislation

PAYG Withholding variation for foreign resident capital gains withholding payments – income tax exempt entities

In ForceCTH

Jurisdiction

Commonwealth

Collection

legislative instrument

Plain English Summary

3/10 complexity

What it does: This instrument sets the PAYG withholding required for foreign‑resident capital gains (the payments covered by section 14‑200) to nil where the purchaser receives evidence the seller is income tax‑exempt — either a valid ATO private binding ruling for the year or charity endorsement under item 1.1 of section 50‑5 ITAA 1997 (Application; Determination). The Deputy Commissioner made the variation under subsection 14‑235(5). Practically, purchasers stop remitting withholding for qualifying transactions but must obtain and rely on the specified exemption evidence.

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Current sections

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PAYG Withholding variation for foreign resident capital gains withholding payments – income tax exempt entities

Legislative Instrument

PAYG Withholding variation for foreign resident capital gains withholding payments –income tax exempt entities

I, Emma Rosenzweig, Deputy Commissioner of Taxation, make this variation under subsection 14-235(5) of Schedule 1 to the Taxation Administration Act 1953.

Deputy Commissioner of Taxation

Dated: 9 March 2017

Name of instrument

This determination is the PAYG Withholding variation for foreign resident capital gains withholding payments – income tax exempt entities.

Commencement

This instrument commences on the day after its registration on the Federal Register of Legislation.

Application

This instrument applies to payments covered by section 14-200 of Schedule 1 to the Taxation Administration Act 1953, where the entity provides to the purchaser:

(i) evidence of a private binding ruling issued by the Australian Taxation Office confirming that the entity is income tax exempt that is valid for the year in which the transaction is occurring; or
(ii) documentation showing that the entity is endorsed for income tax exemption as a registered charity under item 1.1 of section 50-5 of the Income Tax Assessment Act 1997.

4. Determination

The amount to be paid to the Commissioner in relation to transactions covered by this instrument is varied to nil.

Definitions

Income tax exempt entity – exempt entity is defined under subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) which means an entity all of whose *ordinary income and *statutory income is exempt from income tax because of this Act or because of another *Commonwealth law, no matter what kind of ordinary income or statutory income the entity might have; or an *untaxable Commonwealth entity.

Other terms used in this legislative instrument have the same meaning as defined in the:

 Income Tax Assessment Act 1997, or

 Taxation Administration Act 1953

Source text

Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.

1 PAYG Withholding variation for foreign resident capital gains withholding payments – income tax exempt entities