12‑390 Withholding by custodians and oth12‑390 Withholding by custodians and other entities

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:

Start formula Covered part times Rate applicable under subsection (3) end formula

(3) The rate is: (a) if the address or place for payment of the recipient is in an *information exchange country: (i) 15% for *fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or (ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or (iii) 30% for fund payments, to the extent that they are attributable to *non‑concessional MIT income (see section 12‑435); 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 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: 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.