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:  (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. (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) 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%. (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 (within the meaning 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.