Exempt income of recipient
(1) An entity need not withhold an amount under section 12‑35, 12‑40, 12‑45, 12‑47, 12‑50, 12‑55, 12‑60, 12‑80, 12‑85, 12‑90, 12‑120 or 12‑190 from a payment if the whole of the payment is *exempt income of the entity receiving the payment.
Non‑assessable non‑exempt income of recipient
(1A) An entity need not withhold an amount under Subdivision 12‑B, Subdivision 12‑C or section 12‑120 or 12‑190 from a payment if the whole of the payment is not assessable income and is not *exempt income of the entity receiving the payment.
Living‑away‑from‑home allowance benefit
(2) In working out how much to withhold under section 12‑35, 12‑40, 12‑45, 12‑47, 12‑115, 12‑120, 12‑315 or 12‑317 from a payment, disregard so much of the payment as is a living‑away‑from‑home allowance benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986.
Expense payment benefit
(3) In working out how much to withhold under section 12‑35, 12‑40, 12‑45, 12‑47, 12‑115, 12‑120, 12‑315 or 12‑317 from a payment, disregard so much of the payment as:
(a) is an expense payment benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986; and
(b) is not an exempt benefit under section 22 of that Act (about reimbursement of car expenses on the basis of distance travelled).
Capped defined benefit income stream
(4) This section does not apply in relation to a payment if the whole of the payment is a *superannuation income stream benefit that is paid from a *capped defined benefit income stream.
Note: For withholding amounts from a superannuation income stream, see section 12‑80.
12‑5 What to do if more than one provision requires a withholding
(1) If more than one provision in this Division covers a payment, only one amount is to be withheld from the payment.
(2) The provision to apply is the one that is most specific to the circumstances of the payment. However, this general rule is subject to the specific rules in the table, and the specific rule in subsection (3).
<table cellspacing="0" cellpadding="0" style="margin-left:0.05pt; border-collapse:collapse"><thead><tr><td colspan="4" style="width:343.65pt; border-top:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Specific rules for determining priority among withholding provisions</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Apply:</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Which is about:</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">In priority to:</span></p></td></tr></thead><tbody><tr><td style="width:24.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1AA</span></p></td><td style="width:63.85pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>385 or 12</span><span>‑</span><span>390</span></p></td><td style="width:84.85pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>distributions to foreign residents from </span><span style="font-size:8pt; vertical-align:3pt">*</span><span>withholding MITs</span></p></td><td style="width:138.15pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>each other withholding provision</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>35, 12</span><span>‑</span><span>40, 12</span><span>‑</span><span>45, 12</span><span>‑</span><span>47 or 12</span><span>‑</span><span>50</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a payment for work or services</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>60 (payment under a labour hire arrangement or specified by regulations); or</span></p><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>190 (payment for a supply where recipient does not quote its ABN)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1A</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>35 or 12</span><span>‑</span><span>45</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a payment for work or services</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>47 (a payment to a </span><span style="font-size:8pt; vertical-align:3pt">*</span><span>religious practitioner)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>80, 12</span><span>‑</span><span>85 or 12</span><span>‑</span><span>90</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a </span><span style="font-size:8pt; vertical-align:3pt">*</span><span>superannuation benefit, an annuity, a payment for termination of employment or an unused leave payment</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>60 (payment under a labour hire arrangement or specified by regulations); or</span></p><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>190 (payment for a supply where recipient does not quote its ABN)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>110, 12</span><span>‑</span><span>115 or 12</span><span>‑</span><span>120</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a payment of benefit or compensation</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>60 (payment under a labour hire arrangement or specified by regulations); or</span></p><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>190 (payment for a supply where recipient does not quote its ABN)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>60</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a payment under a labour hire arrangement or specified by regulations</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>190 (payment for a supply where recipient does not quote its ABN)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>5</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>section</span><span> </span><span>12</span><span>‑</span><span>140 or 12</span><span>‑</span><span>145</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>a payment arising from investment where the recipient does not quote tax file number</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>section</span><span> </span><span>12</span><span>‑</span><span>175 or 12</span><span>‑</span><span>180 (Payment of income of closely held trust where TFN not quoted) or section</span><span> </span><span>12</span><span>‑</span><span>210, 12</span><span>‑</span><span>215, 12</span><span>‑</span><span>245, 12</span><span>‑</span><span>250 or 12</span><span>‑</span><span>255 (payment of a dividend or interest)</span></p></td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:63.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>280 or 12</span><span>‑</span><span>285</span></p></td><td style="width:84.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>a payment of royalty</span></p></td><td style="width:138.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>section</span><span> </span><span>12</span><span>‑</span><span>325 (natural resource payment)</span></p></td></tr></tbody></table>
(3) Apply a provision in this Division (apart from a provision in Subdivision 12‑FB) that covers a payment in priority to a provision in Subdivision 12‑FB that also covers the payment.
Note: Some provisions of this Division clearly do not cover a payment covered by some other provisions. For example:
Note: Section 12‑55 (about voluntary agreements) covers a payment only if no other provision requires the payer to withhold an amount from the payment.
12‑7 Division does not apply to alienated personal services payments
(1) This Division (other than the provisions mentioned in subsection (2)) does not apply to a payment in so far as the payment:
(a) is an *alienated personal services payment; or
(b) was received, by the entity making the payment, as an *alienated personal services payment.
Note: An entity that receives an alienated personal services payment may be obliged to pay an amount to the Commissioner: see Division 13.
(2) The provisions are:
(a) Subdivision 12‑FB; and
(b) any other provisions in this Division to the extent that they apply in relation to that Subdivision.
12‑10 Division does not apply to non‑cash benefits
This Division does not apply to a payment in so far as it consists of providing a *non‑cash benefit.
Note: If a non‑cash benefit is provided in circumstances where a payment would give rise to a withholding obligation, the provider must pay an amount to the Commissioner: see Division 14.
12‑20 Application of Division and regulations to non‑share dividends
This Division and the regulations made for the purposes of this Division:
(a) apply to a non‑share equity interest in the same way as it applies to a share; and
(b) apply to an equity holder in the same way as it applies to a shareholder; and
(c) apply to a non‑share dividend in the same way as it applies to a dividend.
Subdivision 12‑B—Payments for work and services
Table of sections
12‑35 Payment to employee
12‑40 Payment to company director
12‑45 Payment to office holder
12‑47 Payment to religious practitioners
12‑50 Return to work payment
12‑55 Voluntary agreement to withhold
12‑60 Payment under labour hire arrangement, or specified by regulations
12‑35 Payment to employee
An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity).
For exceptions, see section 12‑1.
12‑40 Payment to company director
A company must withhold an amount from a payment of remuneration it makes to an individual:
(a) if the company is incorporated—as a director of the company, or as a person who performs the duties of a director of the company; or
(b) if the company is not incorporated—as a member of the committee of management of the company, or as a person who performs the duties of such a member.
For exceptions, see section 12‑1.
12‑45 Payment to office holder
(1) An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as:
(a) a member of an *Australian legislature; or
(b) a person who holds, or performs the duties of, an appointment, office or position under the Constitution or an *Australian law; or
(c) a member of the Defence Force, or of a police force of the Commonwealth, a State or a Territory; or
(d) a person who is otherwise in the service of the Commonwealth, a State or a Territory; or
(e) a member of a *local governing body where there is in effect, in accordance with section 446‑5, a unanimous resolution by the body that the remuneration of members of the body be subject to withholding under this Part.
For exceptions, see section 12‑1.
(2) This section does not require an amount to be withheld from a payment to an individual as a member of a *local governing body unless it is one to which paragraph (1)(e) applies.
12‑47 Payment to religious practitioners
An entity must withhold an amount from a payment it makes to a *religious practitioner for an activity, or a series of activities, if:
(a) the activity, or series of activities, is done by the religious practitioner in pursuit of his or her vocation as a religious practitioner; and
(b) the activity, or series of activities, is done by the religious practitioner as a member of a religious institution; and
(c) the payment is made by the entity in the course or furtherance of an *enterprise that the entity *carries on.
12‑50 Return to work payment
An entity must withhold an amount from a payment it makes to an individual if the payment is included in the individual’s assessable income under section 15‑3 of the Income Tax Assessment Act 1997 (return to work payments).
For exceptions, see section 12‑1.
12‑55 Voluntary agreement to withhold
(1) An entity must withhold an amount from a payment it makes to an individual if:
(a) the payment is made under an *arrangement the performance of which, in whole or in part, involves the performance of work or services (whether or not by the individual); and
(b) no other provision of this Division requires the entity to withhold an amount from the payment; and
(c) the entity and the individual are parties to an agreement (the voluntary agreement) that is in the *approved form and states that this section covers payments under the arrangement mentioned in paragraph (a), or under a series of such arrangements that includes that arrangement; and
(d) the individual has an *ABN that is in force and is *quoted in that agreement.
For exceptions, see section 12‑1.
(2) Each party must keep a copy of the voluntary agreement from when it is made until 5 years after the making of the last payment covered by the agreement.
Penalty: 30 penalty units.
Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
(2A) An offence under subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A party to the voluntary agreement may terminate it at any time by notifying the other party in writing.
12‑60 Payment under labour hire arrangement, or specified by regulations
(1) An entity that *carries on an *enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if:
(a) the enterprise is a *business of arranging for persons to perform work or services directly for clients of the entity, or the enterprise includes a business of that kind that is not merely incidental to the main activities of the enterprise; and
(b) the payment is made under an *arrangement the performance of which, in whole or in part, involves the performance of work or services by the individual directly for a client of the entity, or directly for a client of another entity.
For exceptions, see section 12‑1.
Note: Example 1: Staffprovider Ltd keeps a database of skilled persons who are willing for their services to be provided to third parties. Staffprovider arranges with Corporate Pty Ltd to provide to it the services of a computer programmer in return for payment. Staffprovider arranges with Jane for her to do computer programming for Corporate. Staffprovider must withhold amounts under this section from payments it makes to Jane under the arrangement with her.
Note: Example 2: Ian is a solicitor who regularly briefs barristers to represent his clients. Briefing barristers is merely incidental to Ian’s main activities as a solicitor, so he does not have to withhold amounts under this section from payments he makes to barristers.
(2) An entity that carries on an *enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if the payment is, in whole or in part, for work or services and is of a kind prescribed by the regulations.
For exceptions, see section 12‑1.
Subdivision 12‑C—Payments for retirement or because of termination of employment
12‑80 Superannuation income streams and annuities
An entity must withhold an amount from any of the following payments it makes to an individual:
(a) a *superannuation income stream;
(b) an *annuity.
For exceptions, see section 12‑1.
12‑85 Superannuation lump sums and payments for termination of employment
An entity must withhold an amount from any of the following payments it makes to an individual:
(a) a *superannuation lump sum;
(b) a payment that is an *employment termination payment or would be one except that it is received more than 12 months after termination of employment.
For exceptions, see section 12‑1.
12‑90 Unused leave payments
An entity must withhold an amount from any of the following payments it makes to an individual:
(a) an *unused annual leave payment;
(b) an *unused long service leave payment, to the extent that the payment is included in the individual’s assessable income.
For exceptions, see section 12‑1.
Subdivision 12‑D—Benefit and compensation payments
Table of sections
12‑110 Social Security or other benefit payment
12‑115 Commonwealth education or training payment
12‑120 Compensation, sickness or accident payment
12‑110 Social Security or other benefit payment
(1) An entity must withhold an amount from a payment it makes to an individual if the payment is:
(a) specified in an item of the table in section 52‑10 of the Income Tax Assessment Act 1997 (Social Security payments); or
(b) specified in an item of the table in section 52‑65 of that Act (Veterans’ Affairs payments); or
(ba) specified in an item of the table in section 52‑114 of that Act (Military Rehabilitation and Compensation Act payments); or
(c) specified in section 52‑105, 53‑10, 55‑5 or 55‑10 of that Act; or
Note: Payments specified in those provisions of the Income Tax Assessment Act 1997 are made under various Commonwealth laws.
(ca) \*parental leave pay.
(2) In working out the amount to be withheld, disregard so much of the payment as is *exempt income of the individual.
12‑115 Commonwealth education or training payment
(1) An entity must withhold an amount from a *Commonwealth education or training payment it makes to an individual.
For exceptions, see subsection (2) and section 12‑1.
(2) In working out the amount to be withheld, disregard so much of the payment as is *exempt income of the individual.
12‑120 Compensation, sickness or accident payment
An entity must withhold an amount from a payment of compensation, or of sickness or accident pay, it makes to an individual if the payment:
(a) is made because of that or another individual’s incapacity for work; and
(b) is calculated at a periodical rate; and
(c) is not a payment made under an insurance policy to the policy owner.
For exceptions, see section 12‑1.
Subdivision 12‑E—Payments where TFN or ABN not quoted
Table of sections
Payment in respect of investment
12‑140 Recipient does not quote tax file number
12‑145 Investor becoming presently entitled to income of a unit trust
12‑150 Limited application of section 12‑140 to payment under financial arrangement
12‑152 Limited application of section 12‑140 to payment covered by section 12A‑205
12‑155 When investor may quote ABN as alternative
12‑160 Investment body unaware that exemption from quoting TFN has stopped applying
12‑165 Exception for fully franked dividend
12‑170 Exception for payments below thresholds set by regulations
Payment of income of closely held trust where TFN not quoted
12‑175 Trustee distributes income of closely held trust
12‑180 Beneficiary becomes presently entitled to income of closely held trust
12‑185 Exception for payments below thresholds set by regulations
Payment for a supply
12‑190 Recipient does not quote ABN
Payment in respect of investment
12‑140 Recipient does not quote tax file number
(1) An *investment body must withhold an amount from a payment it makes to another entity in respect of a *Part VA investment if:
(a) all or some of the payment is *ordinary income or *statutory income of the other entity; and
(b) if the investment is non‑transferable—the other entity did not *quote its *tax file number in connection with the investment before the time when the payment became payable; and
(c) if the investment is transferable—the other entity did not quote its tax file number in connection with the investment before the time when the other entity had to be registered with the investment body as the *investor to be entitled to the payment.
Note: If the investment body is an AMIT, under subsection 12A‑205(2) amounts may be treated, for the purposes of this Part, as having been paid to the other entity by the investment body.
Payment in respect of units in a trust or investment‑related betting chance
(2) If a *Part VA investment consists of:
(a) units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936); or
(b) an investment‑related betting chance;
an entity (including the *investment body) must withhold an amount from a payment it makes to another entity in respect of the investment if the conditions in subsection (1) of this section are met.
For exceptions to the rules in this section, see sections 12‑150 to 12‑170.
(3) If:
(a) because of subsection 12A‑205(2), an entity is treated as having made a payment to another entity; and
(b) under subsection (2) of this section, the entity has withheld an amount from that payment, and paid the amount to the Commissioner;
the entity may recover from the other entity, as a debt, the amount withheld.
(4) The entity is entitled to set off an amount that the entity can recover from the other entity under subsection (3) against debts due by the entity to the other entity.
12‑145 Investor becoming presently entitled to income of a unit trust
(1) This section applies if:
(a) a *Part VA investment consists of units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936); and
(b) the *investor becomes presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of income of the trust at a time (the entitlement time) before any of that share is paid to the investor.
(2) The entity (including the *investment body) that would have to pay that share to the *investor if the share were due and payable at the entitlement time must withhold from the share, at that time, the amount (if any) that subsection 12‑140(2) would have required it to withhold if it had paid the share to the investor at that time.
For exceptions to the rules in this section, see sections 12‑155 to 12‑170.
(3) This Part (except section 12‑140 and this section) applies as if that entity had paid that share to the *investor at the entitlement time.
(4) If that entity withholds an amount from that share as required by subsection (2), subsection 12‑140(2) does not require an amount to be withheld from a payment of all or part of that share to the *investor.
12‑150 Limited application of section 12‑140 to payment under financial arrangement
(1) This section limits the extent to which section 12‑140 applies to a payment in respect of a *Part VA investment if the investment is a qualifying security (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936 (about gains accruing on securities)) and:
(a) is of a kind mentioned in item 1 or 2 of the table in subsection 202D(1) of that Act; or
(b) is of a kind mentioned in item 3 of that table and is non‑transferable.
Note: Section 202D of the Income Tax Assessment Act 1936 lists the investments in connection with which tax file numbers are to be quoted.
(2) Section 12‑140 applies to the payment only to the extent that is covered by one or both of these paragraphs:
(a) so much of the payment as consists of periodic interest (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936);
(b) if the payment became payable at the end of the term (within the meaning of that Division) of the investment—so much of the payment as does not exceed what section 159GQ of that Act would include in the *investor’s assessable income for the income year in which that term ended.
Note: This limitation ensures that an amount is not withheld from payment of an amount in respect of which TFN withholding tax is payable. See Subdivision 14‑B.
(3) The adoption (under section 18 of the Income Tax Assessment Act 1936) of an accounting period ending on a day other than 30 June is disregarded for the purposes of:
(a) paragraph (2)(b) of this section; and
(b) the application of Division 16E of Part III of that Act for the purposes of that paragraph.
12‑152 Limited application of section 12‑140 to payment covered by section 12A‑205
(1) If a payment is treated under section 12A‑205 as having been made, section 12‑140 does not apply to the payment to the extent that it covers a *pre‑AMMA actual payment from which section 12‑140 has required an amount to be withheld.
(2) If a payment is a *post‑AMMA actual payment, section 12‑140 does not apply to the payment to the extent that it covers either or both of the following:
(a) a *pre‑AMMA actual payment from which section 12‑140 has required an amount to be withheld;
(b) a payment that is treated under section 12A‑205 as having been made from which section 12‑140 has required an amount to be withheld.
12‑155 When investor may quote ABN as alternative
Section 12‑140 or 12‑145 does not require an amount to be withheld if:
(a) the other entity made the investment in the course or furtherance of an *enterprise *carried on by it; and
(b) the other entity has an *ABN, and has *quoted it to the investment body, by the time referred to in paragraph 12‑140(1)(b) or (c).
12‑160 Investment body unaware that exemption from quoting TFN has stopped applying
Section 12‑140 or 12‑145 does not require an amount to be withheld if:
(a) a provision of Division 5 of Part VA of the Income Tax Assessment Act 1936 has applied to the other entity in relation to the investment, but no longer applies when the payment is made; and
(b) when the payment is made, the *investment body has not been informed of anything that resulted in the provision no longer applying.
Note: Division 5 of Part VA of that Act provides, in certain cases, that even though an entity has not quoted its tax file number it is taken to have done so.
12‑165 Exception for fully franked dividend
Section 12‑140 does not require an amount to be withheld if:
(a) the investment consists of *shares in a public company (as defined in section 202A of the Income Tax Assessment Act 1936); and
(b) the payment is a *distribution that has been franked in accordance with section 202‑5 of the Income Tax Assessment Act 1997; and
(c) the *franking percentage for the distribution is 100%.
12‑170 Exception for payments below thresholds set by regulations
(1) Section 12‑140 or 12‑145 does not require an amount to be withheld if the payment is less than the amount worked out under the regulations.
(2) Regulations made for the purposes of this section may deal differently with different payments.
Payment of income of closely held trust where TFN not quoted
12‑175 Trustee distributes income of closely held trust
Scope
(1) This section applies if:
(a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time) during an income year of the trust; and
(b) some or all of the distribution is from the *ordinary income or *statutory income of the trust; and
(c) the trust is:
(i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936) in relation to the income year; and
(ii) a closely held trust (within the meaning of section 102UC of that Act); and
(iii) not prescribed by the regulations for the purposes of this subparagraph; and
(d) the beneficiary is:
(i) an Australian resident; and
(ii) not an *exempt entity; and
(iii) not under a legal disability for the purposes of section 98 of that Act.
Trustee must withhold
(2) The trustee must withhold an amount from the distribution, if:
(a) the beneficiary did not *quote the beneficiary’s *tax file number to the trustee before the distribution time; and
(b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and
(c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non‑disclosure tax) in connection with the distribution; and
(d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.
Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12‑140 in priority to this section: see section 12‑5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16‑25.
Application of rest of Part
(3) If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time.
Trust income of earlier income years
(4) Subsections (2) and (3) do not apply to the distribution, to the extent that:
(a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of the income of the trust of an earlier income year; and
(b) the distribution is a distribution of some or all of that share.
Note: The trustee may have been required to withhold from that share under section 12‑180.
12‑180 Beneficiary becomes presently entitled to income of closely held trust
Scope
(1) This section applies if:
(a) at the end of an income year of a trust, a beneficiary of the trust is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of the income of the trust of that year; and
(b) paragraph 12‑175(1)(c) in this Schedule applies to the trustee of the trust; and
(c) paragraph 12‑175(1)(d) applies to the beneficiary.
Trustee must withhold
(2) The trustee must withhold an amount from that share of the *net income of the trust, if:
(a) the beneficiary did not *quote the beneficiary’s *tax file number to the trustee before the end of the year; and
(b) the trustee is not liable to pay tax in respect of that share under section 98 of the Income Tax Assessment Act 1936; and
(c) the trustee is not required to make a correct TB statement about that share under Division 6D of Part III of that Act (about trustee beneficiary non‑disclosure tax); and
(d) family trust distribution tax is not payable on that share of the income of the trust under Schedule 2F to that Act.
Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12‑145 in priority to this section: see section 12‑5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16‑25.
Application of rest of Part
(3) This Part (other than section 12‑175) applies as if the trustee had paid that share of the *net income of the trust to the beneficiary at the end of the income year.
Entitlements already paid
(4) Subsections (2) and (3) do not apply to that share of the *net income of the trust to the extent that the trustee distributed any of that share to the beneficiary during the income year.
Note: The trustee may have been required to withhold from that distribution under section 12‑175.
Trusts that end during the year
(5) This section applies as if each reference to the end of an income year were a reference to the time occurring just before the trust ends, if the trust ends during the income year.
12‑185 Exception for payments below thresholds set by regulations
(1) Section 12‑175 or 12‑180 does not require an amount to be withheld if the payment (including the payment mentioned in subsection 12‑180(3)) is less than the amount worked out under the regulations.
(2) Regulations made for the purposes of this section may deal differently with different payments.
Payment for a supply
12‑190 Recipient does not quote ABN
(1) An entity (the payer) must withhold an amount from a payment it makes to another entity if:
(a) the payment is for a *supply that the other entity has made, or proposes to make, to the payer in the course or furtherance of an *enterprise *carried on in Australia by the other entity; and
(b) none of the exceptions in this section applies.
ABN correctly quoted
(2) The payer need not withhold an amount under this section if, when the payment is made:
(a) the other entity has given the payer an *invoice that relates to the *supply and *quotes the other entity’s *ABN; or
(b) the payer has some other document relating to the supply on which the other entity’s ABN is *quoted.
(2A) The payer need not withhold an amount under this section if the other entity has made the *supply, or proposes to make the supply, through an agent and, when the payment is made:
(a) the agent has given the payer an *invoice that relates to the supply and *quotes the agent’s *ABN; or
(b) the payer has some other document relating to the supply on which the agent’s ABN is *quoted.
Payer has no reason to believe that ABN has been incorrectly quoted
(3) The payer need not withhold an amount under this section if, when the payment is made:
(a) the other entity has given the payer an *invoice that relates to the *supply and purports to *quote the other entity’s *ABN, or the payer has some other document that relates to the supply and purports to *quote the other entity’s ABN; and
(b) the other entity does not have an ABN, or the invoice or other document does not in fact quote the other entity’s ABN; and
(c) the payer has no reasonable grounds to believe that the other entity does not have an ABN, or that the invoice or other document does not quote the other entity’s ABN.
(3A) The payer need not withhold an amount under this section if the other entity has made the *supply, or proposes to make the supply, through an agent and, when the payment is made:
(a) the agent has given the payer an *invoice that relates to the supply and purports to *quote the agent’s *ABN, or the payer has some other document that relates to the supply and purports to *quote the agent’s ABN; and
(b) the agent does not have an ABN, or the invoice or other document does not in fact quote the agent’s ABN; and
(c) the payer has no reasonable grounds to believe that the agent does not have an ABN, or that the invoice or other document does not quote the agent’s ABN.
No need to quote ABN
(4) The payer need not withhold an amount under this section if:
(a) the payment is made otherwise than in the course or furtherance of an *enterprise *carried on in Australia by the payer; or
(b) the payment (disregarding so much of it as relates to *GST payable on the *supply) or, if the payer has also made, or proposes to make, one or more other payments to the other entity for the supply, the total of all the payments (disregarding so much of them as relates to *GST payable on the supply) does not exceed $50 or such higher amount as is specified in regulations in force for the purposes of subsection 29‑80(1) of the *GST Act; or
(c) the supply is made in the course or furtherance of an activity, or series of activities, done as a member of a local governing body established by or under a *State law or *Territory law; or
(d) the supply is wholly *input taxed.
(5) The payer need not withhold an amount under this section if the payment:
(a) is covered by section 12‑140 or 12‑145 (about not quoting *tax file number in respect of an investment in respect of which the payment is made); or
(b) would be covered by section 12‑140 or 12‑145 if the other entity had not quoted as mentioned in subsection 12‑140(1) or section 12‑155; or
(c) would be covered by section 12‑140 or 12‑145 apart from section 12‑160, 12‑165 or 12‑170 (which are exceptions to sections 12‑140 and 12‑145); or
(d) is covered by section 12‑175 or 12‑180 (Payment of income of closely held trust where TFN not quoted); or
(e) would be covered by section 12‑175 or 12‑180 if the other entity had not quoted as mentioned in paragraph 12‑175(2)(a) or 12‑180(2)(a); or
(f) would be covered by section 12‑175 or 12‑180 apart from section 12‑185 (which is an exception to sections 12‑175 and 12‑180).
(6) The payer need not withhold an amount under this section if, when the payment is made:
(a) the other entity is an individual and has given the payer a written statement to the effect that:
(i) the *supply is made in the course or furtherance of an activity, or series of activities, done as a private recreational pursuit or hobby; or
(ii) the supply is, for the other entity, wholly of a private or domestic nature; and
(b) the payer has no reasonable grounds to believe that the statement is false or misleading in a material particular.
(7) In working out, for the purposes of this section, whether an enterprise is *carried on in Australia, ignore any part of Australia that is not in the indirect tax zone (within the meaning of the *GST Act).
Note: The effect of this subsection is to treat an enterprise as carried on in Australia only where it would be treated as carried on in the indirect tax zone under the A New Tax System (Australian Business Number) Act 1999.
Subdivision 12‑F—Dividend, interest and royalty payments
Table of sections
Dividends
12‑210 Dividend payment to overseas person
12‑215 Dividend payment received for foreign resident
12‑220 Application to part of a dividend
12‑225 Application to distribution by a liquidator or other person
Interest
12‑245 Interest payment to overseas person
12‑250 Interest payment received for foreign resident
12‑255 Interest payment derived by lender in carrying on business through overseas permanent establishment
12‑260 Lender to notify borrower if interest derived through overseas permanent establishment
Royalties
12‑280 Royalty payment to overseas person
12‑285 Royalty payment received for foreign resident
General
12‑300 Limits on amount withheld under this Subdivision
Dividends
12‑210 Dividend payment to overseas person
A company that is an Australian resident must withhold an amount from a *dividend it pays if:
(a) according to the register of the company’s members, the entity, or any of the entities, holding the *shares on which the dividend is paid has an address outside Australia; or
(b) that entity, or any of those entities, has authorised or directed the company to pay the dividend to an entity or entities at a place outside Australia.
For limits on the amount to be withheld, see section 12‑300.
12‑215 Dividend payment received for foreign resident
(1) An entity that receives a payment of a *dividend of a company that is an Australian resident must withhold an amount from the dividend if:
(a) the entity is a person in Australia or an *Australian government agency; and
(b) a foreign resident is or becomes entitled:
(i) to receive the dividend or part of it from the entity, or to receive the amount of the dividend or of part of it from the entity; or
(ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the dividend or part of it, or the amount of the dividend or of part of it.
For limits on the amount to be withheld, see section 12‑300.
(2) The entity must withhold the amount:
(a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or
(b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.
12‑220 Application to part of a dividend
This Part applies to a part of a *dividend in the same way as to a dividend.
12‑225 Application to distribution by a liquidator or other person
This Part applies to a distribution that section 47 of the Income Tax Assessment Act 1936 treats as a *dividend paid by a company, in the same way as this Part applies to a dividend paid by the company, and as if the liquidator or other person making the distribution were the company.
Interest
12‑245 Interest payment to overseas person
An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) it pays to an entity, or to entities jointly, if:
(a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the interest relates; or
(b) the payer is authorised to pay the interest at a place outside Australia (whether to the recipient or any of the recipients or to anyone else).
For limits on the amount to be withheld, see section 12‑300.
12‑250 Interest payment received for foreign resident
(1) An entity that receives a payment of interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) must withhold an amount from the payment if:
(a) the entity is a person in Australia or an *Australian government agency; and
(b) a foreign resident is or becomes entitled:
(i) to receive the interest or part of it from the entity, or to receive the amount of the interest or of part of it from the entity; or
(ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the interest or part of it, or the amount of the interest or of part of it.
For limits on the amount to be withheld, see section 12‑300.
(2) The entity must withhold the amount:
(a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or
(b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.
12‑255 Interest payment derived by lender in carrying on business through overseas permanent establishment
An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) it pays if it has been notified under section 12‑260 of this Act that this section applies to the interest.
Note: For limits on the amount to be withheld, see section 12‑300.
12‑260 Lender to notify borrower if interest derived through overseas permanent establishment
(1) If:
(a) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) is payable to:
(i) an entity that is, or entities at least one of whom is, an Australian resident; or
(ii) an *Australian government agency; and
(b) the entity liable to pay the interest is authorised to pay it at a place in Australia (whether to any of those entities or the agency, or to anyone else); and
(c) the interest is or will be *derived by any of those entities or the agency in carrying on business in a country outside Australia at or through a *permanent establishment it has in that country;
those entities, or the agency, must notify the entity liable to pay the interest that section 12‑255 applies to the interest.
(2) The notice must be given in writing, before the entities, or the agency, enter into the transaction in relation to which the interest is payable, or within one month afterwards.
(3) Immediately after giving the notice, those entities, or the agency, must notify the Commissioner of:
(a) the particulars of the transaction (including the dates on which interest is payable under it); and
(b) the day when the notice was given to the entity liable to pay the interest.
Failure to comply with this section may contravene section 8C of this Act.
Royalties
12‑280 Royalty payment to overseas person
An entity must withhold an amount from a *royalty it pays to an entity, or to entities jointly, if:
(a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the royalty relates; or
(b) the payer is authorised to pay the royalty at a place outside Australia (whether to the recipient or any of the recipients or to anyone else).
For limits on the amount to be withheld, see section 12‑300.
12‑285 Royalty payment received for foreign resident
(1) An entity that receives a payment of a *royalty must withhold an amount from the payment if:
(a) the entity is a person in Australia or an *Australian government agency; and
(b) a foreign resident is or becomes entitled:
(i) to receive the royalty or part of it from the entity, or to receive the amount of the royalty or of part of it from the entity; or
(ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the royalty or part of it, or the amount of the royalty or of part of it.
For limits on the amount to be withheld, see section 12‑300.
(2) The entity must withhold the amount:
(a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or
(b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.
General
12‑300 Limits on amount withheld under this Subdivision
This Subdivision does not require an entity:
(a) to withhold an amount from a *dividend, from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936) or from a *royalty if no *withholding tax is payable in respect of the dividend, interest or royalty; or
(b) to withhold from a dividend, from interest (within the meaning of that Division) or from a royalty more than the withholding tax payable in respect of the dividend, interest or royalty (reduced by each amount already withheld from it under this Subdivision).
Note: Section 128B of the Income Tax Assessment Act 1936 deals with withholding tax liability.
Subdivision 12‑FA—Departing Australia superannuation payments
Table of sections
12‑305 Departing Australia superannuation payment
12‑310 Limits on amount withheld under this Subdivision
12‑305 Departing Australia superannuation payment
An entity must withhold an amount from a *departing Australia superannuation payment it pays to an entity.
12‑310 Limits on amount withheld under this Subdivision
This Subdivision does not require an entity:
(a) to withhold an amount from a *departing Australia superannuation payment if no *withholding tax is payable in respect of the payment; or
(b) to withhold from a departing Australia superannuation payment more than the withholding tax payable in respect of the payment (reduced by each amount already withheld from it under this Subdivision).
Note: Section 301‑175 of the Income Tax Assessment Act 1997 deals with the withholding tax liability.
12‑313 Limits on amount withheld under this Subdivision
12‑312 Untaxed roll‑over superannuation benefits
An entity must withhold an amount from an *excess untaxed roll‑over amount it pays to an entity.
Note: An excess untaxed roll‑over amount is an amount that may form part of a roll‑over superannuation benefit that includes an element untaxed in the fund: see section 306‑15 of the Income Tax Assessment Act 1997.
12‑313 Limits on amount withheld under this Subdivision
This Subdivision does not require an entity:
(a) to withhold an amount from an *excess untaxed roll‑over amount if no *withholding tax is payable on the amount; or
(b) to withhold from an excess untaxed roll‑over amount more than the withholding tax payable on the amount (reduced by each amount already withheld from the excess untaxed roll‑over amount under this Subdivision).
Note: Section 306‑15 of the Income Tax Assessment Act 1997 deals with liability to this form of withholding tax.
Subdivision 12‑FB—Payments to foreign residents etc.
Table of sections
12‑315 Payment to foreign resident etc.
12‑317 Payment received for foreign resident etc.
12‑319 Exemptions from withholding obligations under this Subdivision
12‑315 Payment to foreign resident etc.
(1) An entity (the payer) that *carries on an *enterprise must withhold an amount from a payment it makes to another entity, or to other entities jointly, in the course or furtherance of the enterprise if:
(a) the entity receiving the payment, or any of the entities receiving the payment, is an entity covered by subsection (2); and
(b) the payment is of a kind set out in the regulations; and
(c) the payment is not:
(i) a *dividend of a company; or
(ii) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936); or
(iii) a *royalty; or
(iv) a *departing Australia superannuation payment; or
(v) a payment worked out wholly or partly by reference to the value or quantity of *natural resources produced or recovered in Australia; or
(vi) a *mining payment; or
(vii) an amount represented by or reasonably attributable to a *fund payment; and
(d) the entity receiving the payment is not covered by an exemption in force under subsection 12‑319(1), or at least one of the entities receiving the payment is not covered by an exemption in force under that subsection.
(2) An entity is covered by this subsection if any of the following conditions is satisfied:
(a) the entity is a foreign resident;
(b) the payer believes, or has reasonable grounds to believe, that the entity is a foreign resident;
(c) the payer has no reasonable grounds to believe that the entity is an Australian resident, and either:
(i) the entity has an address outside Australia (according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the payment relates); or
(ii) the payer is authorised to make the payment at a place outside Australia (whether to the entity or to anyone else);
(d) the entity has a connection outside Australia of a kind set out in the regulations.
(3) Before the Governor‑General makes a regulation for the purposes of paragraph (1)(b), the Minister must be satisfied that each payment set out in the regulation is a payment of a kind that could reasonably be related to assessable income of foreign residents.
12‑317 Payment received for foreign resident etc.
(1) An entity (the intermediary) that receives a payment meeting the requirements set out in paragraphs 12‑315(1)(b) and (c) must withhold an amount from the payment if:
(a) the intermediary is a person in Australia or an *Australian government agency; and
(b) another entity (the likely foreign recipient) is or becomes entitled:
(i) to receive the payment or part of it from the intermediary, or to receive the amount of the payment or of part of it from the intermediary; or
(ii) to have the intermediary credit to the likely foreign recipient, or otherwise deal with on the likely foreign recipient’s behalf or as the likely foreign recipient directs, the payment or part of it, or the amount of the payment or of part of it; and
(c) the likely foreign recipient is covered by subsection (3); and
(d) the likely foreign recipient is not covered by an exemption in force under subsection 12‑319(1).
(2) The intermediary must withhold the amount:
(a) if the likely foreign recipient is so entitled when the intermediary receives the payment—just after the intermediary receives the payment; or
(b) if the likely foreign recipient becomes so entitled after the intermediary receives the payment—just after the likely foreign recipient becomes so entitled.
(3) The likely foreign recipient is covered by this subsection if any of the following conditions is satisfied:
(a) the likely foreign recipient is a foreign resident;
(b) the intermediary believes, or has reasonable grounds to believe, that the likely foreign recipient is a foreign resident;
(c) the intermediary has no reasonable grounds to believe that the likely foreign recipient is an Australian resident, and either:
(i) the likely foreign recipient has an address outside Australia (according to any record that is in the intermediary’s possession, or is kept or maintained on the intermediary’s behalf); or
(ii) the intermediary is authorised to forward the payment to a place outside Australia (whether to the likely foreign recipient or to anyone else);
(d) the likely foreign recipient has a connection outside Australia of a kind set out in the regulations.
12‑319 Exemptions from withholding obligations under this Subdivision
(1) The Commissioner may grant an entity an exemption in writing for the purposes of paragraphs 12‑315(1)(d) and 12‑317(1)(d) if the Commissioner is satisfied that:
(a) the entity has an established history of compliance with its obligations under *taxation laws; and
(b) the entity is likely to continue to comply with those obligations in the future.
(2) The exemption is in force during the period:
(a) beginning when the Commissioner grants the exemption; and
(b) ending at the time specified in the exemption.
(3) Without limiting the matters to which the Commissioner may have regard in deciding whether to grant an entity an exemption, the Commissioner may have regard to the following:
(a) whether the entity is or was liable to pay an instalment under Division 45 at any time in:
(i) the income year in which the exemption is proposed to be granted; and
(ii) the previous 2 income years;
(b) the amount (if any) of the entity’s *tax‑related liabilities that are currently due and payable;
(c) the extent to which the entity and its *associates (if any) have complied with their obligations under *taxation laws during:
(i) the income year in which the exemption is proposed to be granted; and
(ii) the previous 2 income years.
(4) The Commissioner must give a copy of the exemption to the entity to which it relates.
(5) A failure to comply with subsection (4) does not affect the validity of the exemption.
Subdivision 12‑FC—Labour mobility programs
Table of sections
12‑319A Payment to employee
12‑319A Payment to employee
An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual:
(a) as an employee of an Approved Employer (whether the entity or another entity) under a program covered by section 840‑906 of the Income Tax Assessment Act 1997 (about labour mobility programs); and
(b) at a time when the employee is a foreign resident and:
(i) the employee holds a Temporary Work (International Relations) Visa (subclass 403); or
(ii) the employee holds a Temporary Activity Visa (subclass 408) having previously held a Temporary Work (International Relations) Visa (subclass 403); or
(iii) the employee holds a visa of a kind prescribed by regulations made under the Income Tax Assessment Act 1997 for the purposes of subparagraph 840‑905(b)(iii) of that Act.
Subdivision 12‑G—Payments in respect of mining on Aboriginal land, and natural resources
Table of sections
Mining on Aboriginal land
12‑320 Mining payment
Natural resources
12‑325 Natural resource payment
12‑330 Payer must ask Commissioner how much to withhold
12‑335 Commissioner may exempt from section 12‑330, subject to conditions
Mining on Aboriginal land
12‑320 Mining payment
(1) An entity must withhold an amount from a *mining payment that:
(a) it makes to another entity; or
(b) it applies for the benefit of another entity.
(2) Subsection (1) does not require the entity to withhold more than the *mining withholding tax payable in respect of the *mining payment.
Note: Section 128V of the Income Tax Assessment Act 1936 deals with mining withholding tax liability.
Natural resources
12‑325 Natural resource payment
(1) An entity must withhold an amount from a payment it makes to a foreign resident, or to 2 or more entities at least one of which is a foreign resident, if the payment is worked out wholly or partly by reference to the value or quantity of *natural resources produced or recovered in Australia.
(2) The amount to be withheld is:
(a) the amount notified by the Commissioner under section 12‑330; or
(b) the amount worked out under a certificate in force under section 12‑335 that covers the payment;
as appropriate.
Exception
(3) Subsection (1) does not apply if:
(a) the Commissioner has notified the entity under section 12‑330 that the entity does not need to withhold an amount from the payment; or
(b) a certificate in force under section 12‑335 covers the payment and does not require the entity to withhold an amount from it.
12‑330 Payer must ask Commissioner how much to withhold
(1) An entity must not intentionally make a payment from which section 12‑325 requires it to withhold an amount, unless:
(a) the entity has notified the Commissioner in writing of the amount of the proposed payment; and
(b) the Commissioner has later notified the entity in writing of the amount (if any) that the entity must withhold from the payment in respect of tax or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made;
or the payment is covered by a certificate in force under section 12‑335.
Penalty: 20 penalty units.
Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Failure to notify not an offence against section 8C
(2) An entity that fails to notify the Commissioner as required by subsection (1) does not commit an offence against section 8C.
12‑335 Commissioner may exempt from section 12‑330, subject to conditions
(1) The Commissioner may give an entity a written certificate exempting the entity from complying with section 12‑330 for specified payments.
(2) A certificate is subject to:
(a) a condition that the entity must withhold from a payment covered by the certificate the amount (if any) worked out in accordance with the certificate in respect of tax or *petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made; and
(b) such other conditions as the certificate specifies.
However, the entity does not contravene subsection 12‑330(1) because it contravenes a condition.
(3) The Commissioner may, by written notice given to the entity:
(a) revoke a certificate, whether or not a condition of it has been contravened; or
(b) vary a certificate by revoking, changing or adding to its conditions.
Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.
Subdivision 12‑H—Distributions of withholding MIT income
Guide to Subdivision 12‑H
12‑375 What this Subdivision is about
A withholding MIT may be required to withhold an amount from a payment of its Australian sourced net income (other than dividends, interest and royalties) if the payment is made to an entity whose address, or place for payment, is outside Australia. If the payment is made to another entity, the withholding MIT is required to make information available to the recipient outlining certain details in relation to the payment.
If a custodian receives a payment that is covered by that information, it is required to withhold an amount from any related later payment to an entity whose address, or place for payment, is outside Australia. If the later payment is made to another entity, the custodian is required to make information available in relation to that later payment.
If an entity that is not a custodian receives a payment that is covered by that information, it is required to withhold an amount from that payment if a foreign resident becomes entitled to that payment. If a resident becomes entitled to the payment, the entity must make information available in relation to that payment.
Where there is an obligation to withhold, the applicable withholding rate is determined by the nature of the country or territory in which the recipient’s address, place for payment or residency is located and whether the trust is a clean building managed investment trust.
A managed investment trust is a clean building managed investment trust if it is a managed investment trust that holds one or more clean buildings and does not derive assessable income from any other taxable Australian property (other than certain assets that are reasonably incidental to a clean building).
Table of sections
Operative provisions
12‑383 Meaning of withholding MIT
12‑385 Withholding by withholding MITs
12‑390 Withholding by custodians and other entities
12‑395 Requirement to give notice or make information available
12‑405 Meaning of fund payment—general case
12‑410 Entity to whom payment is made
12‑415 Failure to give notice or make information available: administrative penalty
12‑420 Agency rules
12‑425 Meaning of clean building managed investment trust
12‑430 Meaning of clean building
12‑435 Meaning of non‑concessional MIT income
12‑436 Meaning of asset entity, operating entity, cross staple arrangement and stapled entity
12‑437 Meaning of MIT cross staple arrangement income
12‑438 MIT cross staple arrangement income—de minimis exception
12‑439 MIT cross staple arrangement income—approved economic infrastructure facility exception
12‑440 Transitional—MIT cross staple arrangement income
12‑441 Integrity rule—concessional cross staple rent cap
12‑442 Meaning of excepted MIT CSA income
12‑443 Concessional cross staple rent cap—existing lease with specified rent or rent method
12‑444 Concessional cross staple rent cap—general
12‑445 Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income
12‑446 Meaning of MIT trading trust income
12‑447 Transitional—MIT trading trust income
12‑448 Meaning of MIT agricultural income, Australian agricultural land for rent and Division 6C land
12‑449 Transitional—MIT agricultural income
12‑450 Meaning of MIT residential housing income
12‑451 Transitional—MIT residential housing income
12‑452 Meaning of residential dwelling asset
12‑453 MIT agricultural income and MIT residential housing income—capital gains in relation to membership interests
Operative provisions
12‑383 Meaning of withholding MIT
(1) A trust is a withholding MIT in relation to an income year if:
(a) it is a *managed investment trust in relation to that income year because of paragraph 275‑10(1)(a) or subsection 275‑10(2) of the Income Tax Assessment Act 1997; and
(b) a substantial proportion of the investment management activities carried out in relation to the trust in respect of all of the following assets of the trust are carried out in Australia throughout the income year:
(i) assets that are situated in Australia at any time in the income year;
(ii) assets that are *taxable Australian property at any time in the income year;
(iii) assets that are *shares, units or interests listed for quotation in the official list of an *approved stock exchange in Australia at any time in the income year.
(2) For the purposes of ascertaining whether a trust is a *managed investment trust in relation to that income year for the purposes of paragraph (1)(a), treat as a *fund payment by the trustee of the trust any amount that, under subsection 12A‑205(2), would be treated as a payment by the trustee if the trust were an *AMIT.
Note: The making of a fund payment is a requirement for the trust to be a managed investment trust under paragraph 275‑10(1)(a) and subsection 275‑10(3) of the Income Tax Assessment Act 1997.
12‑385 Withholding by withholding MITs
(1) A trustee of a trust that is a *withholding MIT in relation to an income year that makes a *fund payment in relation to that income year to an entity covered by section 12‑410 must withhold an amount from the payment.
Note 1: 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 2: If the payment is made to a recipient not covered by section 12‑410, the trustee 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 trustee must withhold is:
Start formula *Fund payment 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%.
(4) An information exchange country is a foreign country or foreign territory specified in the regulations for the purposes of this section.
(5) This section does not apply to an amount paid by a *withholding MIT to the extent that no *managed investment trust withholding tax is payable in respect of the payment or an amount reasonably attributable to the payment.
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.
(5) The amount the entity must withhold is:
Start formula Attributable amount times Rate applicable under subsection (6) end formula
(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.
12‑395 Requirement to give notice or make information available
Withholding MITs and custodians
(1) An entity that is a *withholding MIT or a *custodian must comply with subsection (2) if:
(a) the entity makes a payment to another entity (the recipient) from which an amount would have been required to be withheld under section 12‑385 or subsection 12‑390(1) if the payment had been made to an entity covered by section 12‑410; and
(b) an amount is not required to be withheld from the payment because the recipient is not an entity covered by section 12‑410.
Note: 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.
(2) The entity must:
(a) give to the recipient a written notice containing the details specified in subsection (3); or
(b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years.
(3) The notice must be given, or the details must be made available on a website, before or at the time when the payment is made and:
(a) must specify the part of the payment from which an amount would have been so required to have been withheld; and
(aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and
(ab) must specify the extent (if any) to which the payment is, or is attributable to, *non‑concessional MIT income (see section 12‑435); and
(ac) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non‑concessional MIT income if the following provisions were disregarded:
(i) subsection 12‑437(5);
(ii) sections 12‑440, 12‑447, 12‑449 and 12‑451; and
(ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non‑concessional MIT income only if subsection 12‑450(5) were disregarded; and
(b) must specify the income year of the *withholding MIT to which that part relates.
Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12‑415.
Other entities
(4) An entity that is not a *withholding MIT or a *custodian must comply with subsection (5) if:
(a) the entity receives a payment; and
(b) another entity (also 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 attributable to the payment; and
(c) the entity would have been required to withhold an amount from the payment under subsection 12‑390(4) if the recipient had been a foreign resident; and
(d) an amount is not required to be withheld from the payment because the recipient is not a foreign resident.
(5) The entity must:
(a) give to the recipient a written notice containing the details specified in subsection (6); or
(b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years.
(6) The notice must be given, or the details must be made available on a website, before or at the time when the amount is paid or credited to the recipient, or is dealt with on the recipient’s behalf or as the recipient directs, and:
(a) must specify the part of the payment referred to in paragraph (4)(a) from which an amount would have been so required to have been withheld; and
(aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and
(ab) must specify the extent (if any) to which the payment is, or is attributable to, *non‑concessional MIT income (see section 12‑435); and
(ac) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non‑concessional MIT income if the following provisions were disregarded:
(i) subsection 12‑437(5);
(ii) sections 12‑440, 12‑447, 12‑449 and 12‑451; and
(ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non‑concessional MIT income only if subsection 12‑450(5) were disregarded; and
(b) must specify the income year of the *withholding MIT to which that part relates.
Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12‑415.
12‑405 Meaning of fund payment—general case
(1) The object of this section is to ensure that the total of the *fund payments that the trustee of a trust makes in relation to an income year equals, as nearly as practicable, the net income of the trust for the income year, disregarding these amounts (excluded amounts):
(a) a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to, or exempted from, a requirement to withhold under Subdivision 12‑F;
(b) interest (as so defined) that is subject to, or exempted from, such a requirement;
(c) a *royalty that is subject to, or exempted from, such a requirement;
(d) a *capital gain or *capital loss from a *CGT event that happens in relation to a *CGT asset that is not *taxable Australian property;
(e) amounts that are not from an *Australian source;
and disregarding deductions relating to excluded amounts.
(1A) This section applies to a trust that is not an *AMIT for an income year.
Note: For the definition of fund payment in respect of a trust that is an AMIT for an income year, see section 12A‑110.
(2) Work out as follows how much of a payment (the actual payment) made by the trustee of a trust in relation to an income year is a fund payment in relation to that year:
Method statement
Step 1. Reduce the actual payment by so much of it that is attributable to excluded amounts, and increase it by any amounts to which subsection (2A) or (2B) applies for the income year (except to the extent that capital gains against which those amounts are applied are included in the actual payment made in relation to the income year).
Step 2. Work out what it is reasonable to expect will be the *net income of the trust for the income year:
(aa) increasing the net income by any amounts to which subsection (2A) or (2B) applies for the income year; and
(a) disregarding (except to the extent that they are amounts to which subsection (2A) or (2B) applies for the income year) excluded amounts, expected excluded amounts and deductions relating to those amounts; and
(b) on the basis that a *capital gain from *taxable Australian property of the trust that was or would be reduced under step 3 of the method statement in subsection 102‑5(1) of the Income Tax Assessment Act 1997 were double the amount it actually is.
Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to:
(a) the object of this section; and
(b) the step 1 amount; and
(c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and
(d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year.
(2A) If:
(a) during an income year, a *capital loss from a *CGT event happens in relation to a *CGT asset that is not *taxable Australian property; and
(b) in relation to that income year, some or all of the capital loss is applied against a *capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property;
this subsection applies, for that income year, to the amount that is so applied.
(2B) If:
(a) the trust has a *net capital loss for an income year; and
(b) one or more of the *capital losses the trust made during that income year were from *CGT events that happened in relation to *CGT assets that were not *taxable Australian property; and
(c) in relation to a later income year, some or all of the net capital loss is applied against a *capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property;
this subsection applies, for the later income year, to an amount equal to so much of the net capital loss that is so applied as related to capital losses mentioned in paragraph (b).
(3) The expected *net income of the trust and the expected amounts of future *fund payments are to be worked out on the basis of the trustee’s knowledge when the actual payment is made.
(4) However, an amount is not a fund payment in relation to the income year unless it is paid:
(a) during the income year; or
(b) within 3 months after the end of the income year; or
(c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 months) allowed by the Commissioner.
(5) The Commissioner may allow a longer period as mentioned in paragraph (4)(c) only if the Commissioner is of the opinion that the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.
12‑410 Entity to whom payment is made
(1) An entity (the recipient) is covered by this section for a payment made to it by another entity (the payer) if:
(a) according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, the recipient has an address outside Australia; or
(b) the payer is authorised to make the payment to a place outside Australia.
(2) However, a recipient is not covered by this section for a payment if, at the time the payment was made, a *business the recipient carries on is carried on at or through an *Australian permanent establishment and the payment is attributable to that establishment.
12‑415 Failure to give notice or make information available: administrative penalty
An entity that:
(a) is required to give a notice, or make details available on a website, under section 12‑395 in relation to:
(i) a payment made to another entity; or
(ii) an amount paid or credited to, or dealt with on behalf of or as directed by, another entity; and
(b) fails to comply with that section;
is liable to pay to the Commissioner a penalty equal to the amount that would have been required to be withheld under this Subdivision (disregarding subsection 12‑385(5) and paragraph 12‑390(10)(b)) in relation to amounts attributable to the payment or amount if the notice had been given or the details had been made available.
Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.
12‑420 Agency rules
(1) This section applies to:
(a) a payment (the first payment) made to an entity (the first entity) in the capacity as *agent for another entity; and
(b) another payment made by the first entity to the extent that it is reasonably attributable to the first payment.
(2) This Subdivision has effect as if the first entity were not an *agent in relation to the payments.
Note: As a result of subsection (2), an agent may be required to withhold amounts under this Subdivision.
12‑425 Meaning of clean building managed investment trust
(1) A trust is a clean building managed investment trust in relation to an income year if during the income year:
(a) it is a *withholding MIT in relation to the income year; and
(b) it holds one or more *clean buildings (including the land on which the buildings are situated); and
(c) it does not derive assessable income from any *taxable Australian property (other than from the clean buildings or assets that are reasonably incidental to those buildings).
5% safe harbour for certain income reasonably incidental to a clean building
(2) A trust is not a *clean building managed investment trust in relation to an income year if the assessable income of the trust that is derived from assets that are reasonably incidental to *clean buildings is greater than 5% of the assessable income of the trust that is derived from clean buildings.
(3) The regulations may specify kinds of assets that are, or are not, reasonably incidental to *clean buildings for the purposes of this section.
12‑430 Meaning of clean building
(1) A building is a clean building if:
(a) the construction of the building commenced on or after 1 July 2012; and
(b) it satisfies the requirements in subsections (3) and (4).
(2) For the purpose of subsection (1):
(a) the construction of the building is taken to have commenced at the time the works on the lowest level (including any basement level) of the building commence; and
(b) the construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced.
(3) A building satisfies the requirements in this subsection if:
(a) the building is a commercial building that is any of the following (or is a combination of any of the following):
(i) an office building;
(ii) a hotel for use wholly or mainly to provide short‑term accommodation for travellers;
(iii) a shopping centre; or
(b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.
(4) A building satisfies the requirements in this subsection if:
(a) the building:
(i) has, and continues to maintain at all times during the income year, at least a 5 Star Green Star rating as certified by the Green Building Council of Australia; or
(ii) has, and continues to maintain at all times during the income year, at least a 5.5 star energy rating as accredited by the National Australian Built Environment Rating System (NABERS); or
(b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.
(5) For the purposes of subsection (4), if:
(a) a building has previously satisfied the requirements in that subsection; and
(b) the building then fails to satisfy the requirements for a period (the non‑compliance period); and
(c) within 180 days after the first day of that failure, the building again satisfies the requirements;
treat the building as having satisfied the requirements during the non‑compliance period.
12‑435 Meaning of non‑concessional MIT income
Non‑concessional MIT income means any of the following:
(a) *MIT cross staple arrangement income;
(b) *MIT trading trust income;
(c) *MIT agricultural income;
(d) *MIT residential housing income.
12‑436 Meaning of asset entity, operating entity, cross staple arrangement and stapled entity
(1) An asset entity in relation to an income year is a trust or partnership that is not covered by subsection 275‑10(4) of the Income Tax Assessment Act 1997 in relation to the income year.
(2) An operating entity in relation to an income year is a trust, partnership or company that is covered by subsection 275‑10(4) of the Income Tax Assessment Act 1997 in relation to the income year.
(3) For the purposes of this section, in determining whether a partnership or company is covered by subsection 275‑10(4) of the Income Tax Assessment Act 1997, treat the partnership or company as a trust.
(4) A cross staple arrangement is an *arrangement that is entered into by 2 or more entities (the arrangement entities) if:
(a) at least one of the arrangement entities is an *asset entity; and
(b) at least one of the arrangement entities is an *operating entity; and
(c) the following conditions are satisfied:
(i) one or more other entities (the external entities) each hold a *total participation interest in each arrangement entity;
(ii) the sum of the total participation interests held by the external entities in each arrangement entity is 80% or more.
(5) For the purposes of subparagraph (4)(c)(ii), in working out the sum of the *total participation interests held by the external entities in each arrangement entity, take into account:
(a) a particular *direct participation interest; or
(b) a particular *indirect participation interest;
held in the arrangement entity only once if it would otherwise be counted more than once.
(6) Subsection (7) applies if:
(a) an external entity holds *total participation interests in 2 or more arrangement entities; and
(b) either:
(i) the amount (the lowest participation interest amount) of one of those participation interests falls short of the amount of each of the other participation interests; or
(ii) the amount (the lowest participation interest amount) of 2 or more of those participation interests is the same but falls short of the amount of each of the other participation interests.
(7) For the purposes of paragraph (4)(c), treat the amount of the *total participation interest held by the external entity in each of the arrangement entities as being equal to the lowest participation interest amount.
(8) Each of the entities that entered into the *cross staple arrangement is a stapled entity in relation to the cross staple arrangement.
12‑437 Meaning of MIT cross staple arrangement income
(1) This section applies if:
(a) an amount is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity); and
(c) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12‑405(1)(a), (b), (c), (d) or (e).
(2) The amount is MIT cross staple arrangement income of the *managed investment trust if:
(a) either:
(i) the *managed investment trust is an *asset entity in relation to the income year and is a *stapled entity in relation to a *cross staple arrangement; or
(ii) the second entity is an asset entity in relation to the income year and is a stapled entity in relation to a cross staple arrangement; and
(b) either:
(i) if subparagraph (a)(i) applies—the second entity is an *operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; or
(ii) if subparagraph (a)(ii) applies—another entity (the third entity) is an operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; and
(c) either:
(i) if subparagraph (a)(i) applies—the amount is derived, received or made by the managed investment trust from the second entity; or
(ii) if subparagraph (a)(ii) applies—the amount is attributable to an amount derived, received or made by the second entity from the third entity.
(3) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is attributable to an amount that satisfies the following requirements:
(a) the amount is derived, received or made by a *stapled entity in relation to the *cross staple arrangement from an entity that is not a stapled entity in relation to the cross staple arrangement;
(b) the amount mentioned in paragraph (a) is *rent from land investment.
(4) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is, or is attributable to, an amount covered by subsection 12‑438(1).
Note: The managed investment trust may be an asset entity in relation to the cross staple arrangement. If so, it may have no MIT cross staple arrangement income for the income year as a result of the operation of this subsection.
(5) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is, or is attributable to, *rent from land investment that is:
(a) attributable to a facility, or an improvement to a facility; and
(b) referable to a time in the income year when the facility, or the improvement to the facility, is covered by section 12‑439.
(6) Subsection (7) applies if:
(a) an *asset entity in relation to the income year mentioned in paragraph (1)(a) makes a *capital gain because an *operating entity in relation to the income year *acquires an asset from the asset entity; and
(b) the asset entity and the operating entity are *stapled entities in relation to the *cross staple arrangement.
(7) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is attributable to the *capital gain.
12‑438 MIT cross staple arrangement income—de minimis exception
(1) For the purposes of subsection 12‑437(4), this subsection covers an amount if:
(a) the amount is *MIT cross staple arrangement income for the income year of an *asset entity in relation to the *cross staple arrangement; and
(b) the MIT cross staple arrangement income of the asset entity for the previous income year does not exceed 5% of the amount mentioned in subsection (3).
(2) For the purposes of subsection (1), in working out the *MIT cross staple arrangement income of the *asset entity for the previous income year, disregard subsections 12‑437(4) and (5).
(3) The amount is:
(a) if the *asset entity is not an *AMIT for the income year—the assessable income of the asset entity for the previous income year (worked out for the purposes of determining the *net income of the asset entity for the income year); or
(b) if the asset entity is an AMIT for the income year—the total assessable income (as mentioned in subsection 276‑265(2) of the Income Tax Assessment Act 1997) of the asset entity for the previous income year.
(4) For the purposes of subsection (3), in working out the assessable income, or the total assessable income, of the *asset entity for the previous income year, disregard any *net capital gain of the asset entity for that year.
(5) If the *asset entity did not exist in the previous income year:
(a) treat references in this section to the previous income year as instead being references to the income year; and
(b) treat references in this section to the *MIT cross staple arrangement income of the asset entity as instead being references to a reasonable estimate of the MIT cross staple arrangement income of the asset entity; and
(c) treat references in this section to the assessable income of the asset entity as instead being references to a reasonable estimate of the assessable income of the asset entity; and
(d) treat references in this section to the total assessable income of the asset entity as instead being references to a reasonable estimate of the total assessable income of the asset entity.
(6) If the *asset entity exists in an income year, but is not a *managed investment trust in relation to that income year, for the purposes of this section, treat it as a managed investment trust in relation to that income year that is not an *AMIT for that income year.
12‑439 MIT cross staple arrangement income—approved economic infrastructure facility exception
(1) This section covers a facility at a time if:
(a) the facility is covered by an approval of the Treasurer under this section that is in force at that time; and
(b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use.
(2) This section covers an improvement to a facility at a time if:
(a) the improvement to the facility is covered by an approval of the Treasurer under this section that is in force at that time; and
(b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use after it has been improved under the improvement.
(3) An *Australian government agency (other than the Commonwealth) may make an application to the Treasurer in respect of a facility, or an improvement to a facility, specified in the application.
(4) The Treasurer may approve the facility, or the improvement to the facility, specified in the application under subsection (3) if the Treasurer is satisfied that the following criteria are met:
(a) the facility is an *economic infrastructure facility;
(b) in the case of an application in respect of a facility:
(i) the estimated capital expenditure on the facility is $500 million or more; and
(ii) the facility is yet to be constructed; and
(iii) the facility will significantly enhance the long‑term productive capacity of the economy; and
(iv) approving the facility is in the national interest;
(c) in the case of an application in respect of an improvement to a facility:
(i) the estimated capital expenditure on the improvement is $500 million or more; and
(ii) the improvement is yet to be constructed; and
(iii) the improvement will significantly enhance the long‑term productive capacity of the economy; and
(iv) approving the improvement is in the national interest.
(5) An economic infrastructure facility is a facility that is any of the following:
(a) transport infrastructure;
(b) energy infrastructure;
(c) communications infrastructure;
(d) water infrastructure.
(6) An approval under subsection (4):
(a) must be in writing; and
(b) must specify the facility, or the improvement, that is approved; and
(c) must specify the date on which the approval comes into force; and
(d) may contain any other information that the Treasurer considers appropriate.
(7) The Treasurer may publish an approval under subsection (4) in any way that he or she considers appropriate.
(8) If the Treasurer decides not to approve the facility, or the improvement to a facility, specified in the application under subsection (3), the Treasurer must notify the applicant of the decision, in writing, as soon as practicable after making the decision.
12‑440 Transitional—MIT cross staple arrangement income
(1) This section applies if:
(a) before 27 March 2018, an *Australian government agency:
(i) decided to approve the *acquisition, creation or lease of a facility; and
(ii) publicly announced that decision; and
(iii) took significant preparatory steps to implement that decision; and
(b) either:
(i) a *cross staple arrangement was entered into in relation to the facility before 27 March 2018; or
(ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and
(c) all the entities that are *stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and
(d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5).
(2) This section also applies if:
(a) any of the following applies:
(i) an entity entered into a contract before 27 March 2018 for the *acquisition, creation or lease of a facility;
(ii) an entity owns, or is the lessee of, a facility at a time before 27 March 2018; and
(b) either:
(i) a *cross staple arrangement was entered into in relation to the facility before 27 March 2018; or
(ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and
(c) all the entities that are *stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and
(d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5).
(3) An amount included in the assessable income for an income year of a *managed investment trust is not MIT cross staple arrangement income of the managed investment trust if:
(a) the amount is, or is attributable to, an amount derived, received or made from another entity (the second entity); and
(b) the amount relates to the facility; and
(c) the second entity is a *stapled entity in relation to the *cross staple arrangement; and
(d) either:
(i) if subparagraph 12‑437(2)(a)(i) applies—the amount is *rent from land investment paid from an *operating entity in relation to the cross staple arrangement to the managed investment trust; or
(ii) if subparagraph 12‑437(2)(a)(ii) applies—the amount is attributable to rent from land investment paid from an operating entity in relation to the cross staple arrangement to an *asset entity in relation to the cross staple arrangement; and
(e) the time when the amount was derived, received or made by the managed investment trust meets the requirements in subsection (4).
(4) The time meets the requirements in this subsection if:
(a) where the facility to which the *cross staple arrangement relates is not an *economic infrastructure facility—the time is before 1 July 2031 and before the later of:
(i) 1 July 2026; and
(ii) the end of the period of 7 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income; or
(b) where the facility to which the cross staple arrangement relates is an economic infrastructure facility—the time is before 1 July 2039 and before the later of:
(i) 1 July 2034; and
(ii) the end of the period of 15 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income.
(5) An entity makes a choice in accordance with this subsection if:
(a) the entity makes the choice in the *approved form; and
(b) the entity makes the choice no later than:
(i) 30 June 2019; or
(ii) a later time allowed by the Commissioner; and
(c) the entity gives the choice to the Commissioner within 60 days after the entity makes the choice.
(6) The choice cannot be revoked.
12‑441 Integrity rule—concessional cross staple rent cap
(1) This section applies if:
(a) a *managed investment trust in relation to an income year derives, receives or makes an amount of *excepted MIT CSA income for the income year; and
(b) if the amount is excepted MIT CSA income because of subsection 12‑440(3)—paragraph 12‑440(4)(b) applies (15 year concession); and
(c) the amount of excepted MIT CSA income is, or is attributable to, *rent from land investment under a lease (the cross staple lease) entered into by:
(i) the *asset entity mentioned in paragraph 12‑437(2)(a) (the relevant asset entity); and
(ii) the *operating entity mentioned in paragraph 12‑437(2)(b) (the relevant operating entity).
(2) To the extent (if any) that the amount of the relevant asset entity’s *excepted MIT CSA income exceeds its *concessional cross staple rent cap for the income year, the following provisions do not apply to the amount of the *managed investment trust’s excepted MIT CSA income mentioned in paragraph (1)(a):
(a) subsection 12‑437(5);
(b) subsection 12‑440(3).
(3) If the relevant asset entity is not a *managed investment trust in relation to the income year, for the purposes of subsection (2), treat it as a managed investment trust in relation to the income year.
12‑442 Meaning of excepted MIT CSA income
An amount is excepted MIT CSA income of a *managed investment trust in relation to an income year if it would be *MIT cross staple arrangement income of the managed investment trust but for any of the following provisions:
(a) subsection 12‑437(5);
(b) subsection 12‑440(3).
12‑443 Concessional cross staple rent cap—existing lease with specified rent or rent method
(1) This section applies if:
(a) the amount mentioned in subsection 12‑441(1) is *excepted MIT CSA income because of subsection 12‑440(3); and
(b) the cross staple lease was entered into before 27 March 2018; and
(c) the cross staple lease, or associated documents, specified any of the following before 27 March 2018:
(i) the amount of annual rent under the lease for the first year of the lease that ends after 27 March 2018;
(ii) an objective method for determining the amount of annual rent under the lease; and
(d) if subparagraph (c)(ii) applies—the method is set out in the cross staple lease, or the associated documents, before 27 March 2018.
(2) If subparagraph (1)(c)(ii) applies, the concessional cross staple rent cap for an income year of the *managed investment trust is the amount of annual rent determined for the income year under the method mentioned in that subparagraph.
(3) If subparagraph (1)(c)(ii) does not apply, the concessional cross staple rent cap for an income year of the *managed investment trust is:
(a) for an income year where the lease, or the associated documents, specify the amount of annual rent for the corresponding year of the lease under subsection (4)—that amount; or
(b) for an income year where that amount is not so specified—the amount worked out under paragraph (a) in relation to the most recent year of the lease for which an amount is so specified, indexed annually in accordance with Subdivision 960‑M of the Income Tax Assessment Act 1997.
(4) An income year and a year of the lease correspond to each other under this subsection if both of those years end:
(a) after a particular 27 March; and
(b) on or before the next 27 March.
12‑444 Concessional cross staple rent cap—general
(1) This section applies if section 12‑443 does not apply.
(2) The concessional cross staple rent cap for an income year of the *managed investment trust is worked out as follows:
(a) first, work out a reasonable estimate of whichever of the following is applicable:
(i) if the relevant asset entity is a trust that is not an *AMIT—the relevant asset entity’s *net income, or *tax loss, for the income year;
(ii) if the relevant asset entity is an AMIT—the sum of the relevant asset entity’s *trust components with the character of assessable income, or the relevant asset entity’s tax loss, for the income year;
(iii) if the relevant asset entity is a partnership—the relevant asset entity’s net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), for the income year;
(b) next, work out a reasonable estimate of whichever of the following is applicable:
(i) if the relevant operating entity is a trust that is not an AMIT—the operating asset entity’s net income, or tax loss, for the income year;
(ii) if the relevant operating entity is a partnership—the relevant operating entity’s net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), for the income year;
(iii) otherwise—the relevant operating entity’s taxable income or tax loss for the income year;
(c) next, add the results of paragraphs (a) and (b);
(d) next, multiply the result of paragraph (c) by 0.8;
(e) next, subtract the result of paragraph (a) from the result of paragraph (d);
(f) next, add the amount of *excepted MIT CSA income mentioned in subsection 12‑441(1) to the result of paragraph (e).
If the result of paragraph (f) is a positive number, the concessional cross staple rent cap is that result. Otherwise, the concessional cross staple rent cap is nil.
(3) For the purposes of paragraphs (2)(a) and (b):
(a) treat the amount of a *tax loss, or of a partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), as a negative number; and
(b) disregard any *tax loss for a previous income year of the relevant asset entity or relevant operating entity.
12‑445 Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income
(1) This section applies if:
(a) an entity is an *asset entity in relation to an income year and is a *stapled entity in relation to a *cross staple arrangement; and
(b) the entity is entitled to a deduction for the income year against its assessable income that arises from *rent from land investment that it derives or receives in the income year; and
(c) the entity derives, receives or makes an amount of *excepted MIT CSA income in the income year (disregarding this section and subsection 12‑441(2)); and
(d) the amount of that excepted MIT CSA income exceeds the entity’s *concessional cross staple rent cap for the income year.
(2) The amount of the deduction can only be deducted against an amount of assessable income of the *asset entity as follows:
(a) first, the amount can only be deducted against an amount of assessable income that is *excepted MIT CSA income, to the extent that the excepted MIT CSA income does not exceed the entity’s *concessional cross staple rent cap for the income year;
(b) next, if an amount of the deduction remains after applying the rule in paragraph (a), the amount can only be deducted against an amount of assessable income that is *MIT cross staple arrangement income;
(c) next, if an amount of the deduction remains after applying the rules in paragraphs (a) and (b), the amount can be deducted against an amount of assessable income in accordance with other provisions of this Act.
(3) If the *asset entity is not a *managed investment trust in relation to the income year, for the purposes of determining whether an amount of its assessable income for the income year is *MIT cross staple arrangement income, treat it as a managed investment trust in relation to the income year.
12‑446 Meaning of MIT trading trust income
(1) This section applies if:
(a) an amount is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity); and
(c) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12‑405(1)(a), (b), (c), (d) or (e).
(2) The amount is MIT trading trust income of the *managed investment trust if:
(a) the managed investment trust holds a *total participation interest in the second entity of greater than nil; and
(b) the amount arises because of that total participation interest; and
(c) the second entity:
(i) is a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to the income year; or
(ii) is a partnership or a trust that is not a unit trust, but would be such a trading trust in relation to the income year if it were a unit trust throughout the income year; and
(d) the second entity is not a *public trading trust in relation to the income year.
(3) The amount is not MIT trading trust income of the *managed investment trust under subsection (2) to the extent that it is attributable to a *capital gain made from *CGT event E4 or *CGT event E10.
12‑447 Transitional—MIT trading trust income
(1) This section applies if:
(a) an amount (the relevant amount) included in the assessable income for an income year of a *managed investment trust is *MIT trading trust income of the managed investment trust (disregarding this section); and
(b) immediately before 27 March 2018, the managed investment trust held a *total participation interest (the pre‑announcement TPI) of greater than nil in the second entity mentioned in subsection 12‑446(1) (the second entity); and
(c) the relevant amount was derived, received or made by the managed investment trust before 1 July 2026.
(2) Treat part of the relevant amount as not being *MIT trading trust income of the *managed investment trust.
(3) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (4) and (5).
(4) If the *total participation interest (the post‑announcement TPI) held by the *managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre‑announcement TPI, work out that fraction by dividing:
(a) the pre‑announcement TPI;
by:
(b) the post‑announcement TPI.
(5) Otherwise, the fraction is 1.
12‑448 Meaning of MIT agricultural income, Australian agricultural land for rent and Division 6C land
(1) This section applies if:
(a) an amount is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12‑405(1)(a), (b), (c), (d) or (e).
(2) The amount is MIT agricultural income of the *managed investment trust to the extent that it is attributable to an asset that is *Australian agricultural land for rent (whether or not held by the managed investment trust).
(3) Australian agricultural land for rent is *Division 6C land situated in Australia that:
(a) is used, or could reasonably be used, for carrying on a *primary production business; and
(b) is held primarily for the purposes of deriving or receiving rent.
(4) For the purposes of this section, if an *economic infrastructure facility is a fixture on *Australian agricultural land for rent:
(a) treat the economic infrastructure facility as being separate from the Australian agricultural land for rent; and
(b) treat the economic infrastructure facility as not being Australian agricultural land for rent.
(5) Division 6C land is land (within the meaning of Division 6C of Part III of the Income Tax Assessment Act 1936), and includes a thing if an investment in the thing would be an investment in land under subsection 102MB(1) of that Act.
12‑449 Transitional—MIT agricultural income
(1) This section applies if:
(a) an amount (the relevant amount) is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the relevant amount would be *MIT agricultural income (disregarding this section) of the managed investment trust because it is attributable to an asset that is *Australian agricultural land for rent; and
(c) the managed investment trust derived, received or made the relevant amount before 1 July 2026; and
(d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the asset:
(i) the managed investment trust held the asset just before 27 March 2018; or
(ii) before 27 March 2018, the managed investment trust entered into a contract for the *acquisition or lease of the asset; and
(e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity) held the asset:
(i) the second entity held the asset just before 27 March 2018; or
(ii) before 27 March 2018, the second entity entered into a contract for the acquisition or lease of the asset; and
(f) if paragraph (e) applies—immediately before 27 March 2018, the managed investment trust held a *total participation interest (the pre‑announcement TPI) of greater than nil in the second entity.
(2) If paragraph (1)(d) applies, treat the relevant amount as not being *MIT agricultural income of the *managed investment trust.
(3) If paragraph (1)(e) applies, treat part of the relevant amount as not being *MIT agricultural income of the *managed investment trust.
(4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6).
(5) If the *total participation interest (the post‑announcement TPI) held by the *managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre‑announcement TPI, work out that fraction by dividing:
(a) the pre‑announcement TPI;
by:
(b) the post‑announcement TPI.
(6) Otherwise, the fraction is 1.
12‑450 Meaning of MIT residential housing income
(1) This section applies if:
(a) an amount is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12‑405(1)(a), (b), (c), (d) or (e).
(2) The amount is MIT residential housing income of the *managed investment trust to the extent that it is attributable to a *residential dwelling asset (whether or not held by the managed investment trust).
Asset used to provide affordable housing
(3) The amount is not MIT residential housing income of the *managed investment trust under subsection (2) to the extent that it is referable to the use of the *residential dwelling asset to *provide affordable housing.
(4) If the amount is, or is attributable to, a *capital gain from a *CGT event, subsection (3) applies only if:
(a) the entity that held the *residential dwelling asset just before the time (the CGT event time) when the CGT event happened had held it for at least 3,650 days (consecutive or not); and
(b) each of those days satisfies the following requirements:
(i) the day is on or after 1 July 2017 and before the CGT event time;
(ii) the residential dwelling asset was used on the day to *provide affordable housing.
Income from a build to rent development
(5) Subject to subsection (7), the amount is not MIT residential housing income of the *managed investment trust under subsection (2) to the extent any of the following paragraphs applies to the amount in relation to a *dwelling of an *active build to rent development:
(a) the amount is, or is referable to, a payment of rental income under a lease of the dwelling;
(b) the amount is, or is attributable to, a *capital gain from a *CGT event in relation to the dwelling;
(c) all of the following subparagraphs apply:
(i) the amount is, or is attributable to, a part of a capital gain from a CGT event in relation to a *membership interest in an entity;
(ii) just before the time of the CGT event, all or part of the *market value of the membership interest is referable to the dwelling;
(iii) subsection (6) applies to the part of the capital gain.
(6) This subsection applies to the part of a *capital gain mentioned in paragraph (5)(c) worked out as follows:
Start formula start fraction Amount of the *capital gain times Value of the interest in the dwelling over Value of the membership interest end fraction end formula
where:
value of the interest in the dwelling means so much of the value of the membership interest as is referable to the *dwelling.
value of the membership interest means the *market value of the *membership interest just before the time of the *CGT event.
(7) Subsection (5) does not apply to an amount if:
(a) the *build to rent compliance period for each of the *dwellings of the *active build to rent development has ended; and
(b) assuming that the build to rent compliance period for each of the dwellings had not ended, the active build to rent development would have *ceased to be an active build to rent development.
12‑451 Transitional—MIT residential housing income
(1) This section applies if:
(a) an amount (the relevant amount) is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s *net income, or in the case of an *AMIT, the trust’s total assessable income, for the income year); and
(b) the relevant amount would be *MIT residential housing income (disregarding this section) of the *managed investment trust because it is attributable to a facility that consists of or contains a *residential dwelling asset; and
(c) the managed investment trust derived, received or made the relevant amount before 1 October 2027; and
(d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the facility:
(i) the managed investment trust held the facility just before the time mentioned in subsection (7); or
(ii) before the time mentioned in subsection (7), the managed investment trust entered into a contract for the *acquisition, creation or lease of the facility; and
(e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity) held the facility:
(i) the second entity held the facility just before the time mentioned in subsection (7); or
(ii) before the time mentioned in subsection (7), the second entity entered into a contract for the acquisition, creation or lease of the facility; and
(f) if paragraph (e) applies—immediately before the time mentioned in subsection (7), the managed investment trust held a *total participation interest (the pre‑announcement TPI) of greater than nil in the second entity.
(2) If paragraph (1)(d) applies, treat the relevant amount as not being *MIT residential housing income of the *managed investment trust.
(3) If paragraph (1)(e) applies, treat part of the relevant amount as not being *MIT residential housing income of the *managed investment trust.
(4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6).
(5) If the *total participation interest (the post‑announcement TPI) held by the *managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre‑announcement TPI, work out that fraction by dividing:
(a) the pre‑announcement TPI;
by:
(b) the post‑announcement TPI.
(6) Otherwise, the fraction is 1.
(7) The time is 4.30 pm, by legal time in the Australian Capital Territory, on 14 September 2017.
12‑452 Meaning of residential dwelling asset
(1) A residential dwelling asset is an asset that:
(a) is a *dwelling; and
(b) is *taxable Australian real property; and
(c) is *residential premises (other than *commercial residential premises); and
(d) is not a dwelling that:
(i) is used primarily to provide specialist disability accommodation (within the meaning of the National Disability Insurance Scheme (Specialist Disability Accommodation Conditions) Rule 2018); and
(ii) is enrolled in accordance with section 6 of that Rule; and
(e) is not a dwelling that:
(i) is used primarily to provide disability accommodation; and
(ii) is a dwelling of a kind prescribed by the regulations for the purposes of this subparagraph.
(2) Section 118‑120 (Extension to adjacent land) applies in relation to this section in the same way as it applies in relation to Subdivision 118‑B.
(3) To avoid doubt, for the purposes of applying section 118‑120 in relation to this section, a *dwelling’s *adjacent land may include land used primarily for private or domestic purposes in association with the dwelling and with one or more other dwellings.
12‑453 MIT agricultural income and MIT residential housing income—capital gains in relation to membership interests
(1) Subsection (2) applies if:
(a) any of the following provisions apply in relation to an amount:
(i) section 12‑448;
(ii) section 12‑450; and
(b) the amount is, or is attributable to, a *capital gain from a *CGT event in relation to an asset that is a *membership interest in an entity; and
(c) just before the CGT event happened, the entity held, directly or indirectly, one or more assets that are any of the following;
(i) *Australian agricultural land for rent;
(ii) a *residential dwelling asset.
(2) For the purposes of subsections 12‑448(2) and 12‑450(2):
(a) in a case where the *membership interest mentioned in subsection (1) passes the principal asset test in section 855‑30 of the Income Tax Assessment Act 1997 immediately before the time the *CGT event happens:
(i) if the assets mentioned in paragraph (1)(c) are all *Australian agricultural land for rent—treat the *capital gain as being wholly attributable to the Australian agricultural land for rent; or
(ii) if the assets mentioned in paragraph (1)(c) are all *residential dwelling assets—treat the capital gain as being wholly attributable to residential dwelling assets; or
(iii) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the *market value of the membership interest that is attributable to Australian agricultural land for rent equals or exceeds the market value of the membership interest that is attributable to residential dwelling assets—treat the capital gain as being wholly attributable to Australian agricultural land for rent; or
(iv) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the market value of the membership interest that is attributable to Australian agricultural land for rent falls short of the market value of the membership interest that is attributable to residential dwelling assets—treat the capital gain as being wholly attributable to residential dwelling assets; or
(b) in any other case—treat the capital gain:
(i) as not being attributable to Australian agricultural land for rent; and
(ii) as not being attributable to residential dwelling assets.
(3) For the purposes of subsection (2), in determining whether the *membership interest passes the principal asset test, treat references in section 855‑30 of the Income Tax Assessment Act 1997 to *taxable Australian real property as instead being references to an asset that is any of the following:
(a) *Australian agricultural land for rent;
(b) a *residential dwelling asset.
(4) For the purposes of this section, in working out the *market value of an asset, work out that market value just before the time the *CGT event mentioned in paragraph (1)(b) happens.
Subdivision 12‑J—FHSS released amounts
Table of sections
12‑460 FHSS released amounts
12‑460 FHSS released amounts
The Commissioner must withhold an amount from the *FHSS released amounts paid in respect of a person.
Division 12A—Distributions by AMITs (including deemed payments)
Table of Subdivisions
Guide to Division 12A
12A‑A Distributions by AMITs relating to dividend, interest and royalties
12A‑B Distributions by AMITs relating to Subdivision 12‑H fund payments
12A‑C Deemed payments by AMITs etc.
Guide to Division 12A
12A‑1 What this Division is about
When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member.
The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments.
Withholding liabilities under Subdivisions 12‑F and 12‑H do not apply in relation to deemed payments (although analogous liabilities may arise under Subdivision 12A‑C).
AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.
Subdivision 12A‑A—Distributions by AMITs relating to dividend, interest and royalties
Guide to Subdivision 12A‑A
12A‑5 What this Subdivision is about
Withholding liabilities under Subdivision 12‑F do not apply in relation to deemed payments arising under Subdivision 12A‑C relating to dividends, interest or royalties (although analogous liabilities may arise under Subdivision 12A‑C).
AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.
Table of sections
Operative provisions
12A‑10 Deemed payments—no obligation to withhold under Subdivision 12‑F (dividend, interest and royalty payments)
12A‑15 Dividend, interest or royalty payments relating to AMIT—requirement to give notice or make information available
12A‑20 Failure to give notice or make information available under section 12A‑15: administrative penalty
12A‑25 Meaning of AMIT DIR payment
12A‑30 Meaning of AMIT dividend payment
12A‑35 Meaning of AMIT interest payment
12A‑40 Meaning of AMIT royalty payment
Operative provisions
12A‑10 Deemed payments—no obligation to withhold under Subdivision 12‑F (dividend, interest and royalty payments)
(1) If the entity that receives a payment as mentioned in subsection 12‑215(1), 12‑250(1) or 12‑285(1) is the trustee of an *AMIT, the entity need not withhold an amount under that subsection from the payment if the payment arises because of the operation of section 12A‑205 (deemed payments).
Note: The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A‑C).
(2) Subsection (3) applies if:
(a) the entity that receives a payment as mentioned in subsection 12‑215(1), 12‑250(1) or 12‑285(1) is a *custodian; and
(b) it received the payment from an *AMIT.
(3) The entity need not withhold an amount under that subsection from the payment mentioned in that subsection if:
(a) the payment arises because of the operation of section 12A‑205 (deemed payments); or
(b) the payment is a *post‑AMMA actual payment in respect of a payment that so arises.
Note: Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A‑C).
(4) Disregard this section for the purposes of section 12A‑15.
12A‑15 Dividend, interest or royalty payments relating to AMIT—requirement to give notice or make information available
AMITs and custodians
(1) An entity that is an *AMIT or a *custodian must comply with subsection (2) if:
(a) the entity makes a payment to another entity (the recipient) from which an amount would have been required to be withheld under Subdivision 12‑F if:
(i) the entity were a company; and
(ii) the payment had been made to a foreign resident; and
(iii) the condition in either or both of paragraphs 12‑210(a) or (b), of paragraphs 12‑245(a) or (b) or of paragraphs 12‑280(a) or (b) (as the case requires) were satisfied; and
(b) an amount is not required to be withheld from the payment because:
(i) the recipient is not a foreign resident; or
(ii) the recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936) of the recipient in Australia, and the payment is attributable to the permanent establishment; and
(c) the payment is any of the following:
(i) a payment that arises because of the operation of section 12A‑205 (deemed payments);
(ii) a *pre‑AMMA actual payment in respect of a payment that so arises.
(2) The entity must:
(a) give to the recipient a written notice containing the details specified in subsection (3); or
(b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years.
(3) The notice must be given, or the details must be made available on a website, before or at the time when the payment is made and:
(a) must specify the part of the payment from which an amount would have been so required to have been withheld; and
(b) must specify the income year of the *AMIT to which that part relates.
Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12A‑20.
Other entities
(4) An entity that is not an *AMIT or a *custodian must comply with subsection (5) if:
(a) the entity receives a payment; and
(b) another entity (the subsequent recipient) is or becomes entitled:
(i) to receive from the entity; or
(ii) to have the entity credit to the subsequent recipient, or otherwise deal with on the subsequent recipient’s behalf or as the subsequent recipient directs;
an amount attributable to the payment; and
(c) the entity would have been required to withhold an amount from the payment under subsection 12‑215(1), 12‑250(1) or 12‑285(1) if the subsequent recipient had been a foreign resident; and
(d) an amount is not required to be withheld from the payment because:
(i) the subsequent recipient is not a foreign resident; or
(ii) the subsequent recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936) of the subsequent recipient in Australia, and the payment is attributable to the permanent establishment; and
(e) the payment is any of the following:
(i) a payment that arises because of the operation of section 12A‑205 (deemed payments);
(ii) a *pre‑AMMA actual payment in respect of a payment that so arises.
(5) The entity must:
(a) give to the subsequent recipient a written notice containing the details specified in subsection (6); or
(b) make those details available on a website in a way that the details are readily accessible to the subsequent recipient for not less than 5 continuous years.
(6) The notice must be given, or the details must be made available on a website, before or at the time when the amount is paid or credited to the subsequent recipient, or is dealt with on the subsequent recipient’s behalf or as the subsequent recipient directs, and:
(a) must specify the part of the payment referred to in paragraph (4)(a) from which an amount would have been so required to have been withheld; and
(b) must specify the income year of the *AMIT to which that part relates.
Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12A‑20.
12A‑20 Failure to give notice or make information available under section 12A‑15: administrative penalty
An entity that:
(a) is required to give a notice, or make details available on a website, under section 12A‑15 in relation to:
(i) a payment made to another entity; or
(ii) an amount paid or credited to, or dealt with on behalf of or as directed by, another entity; and
(b) fails to comply with that section;
is liable to pay to the Commissioner a penalty equal to the amount that would have been required to be withheld under this Subdivision (disregarding section 12‑300) in relation to amounts attributable to the payment or amount if the notice had been given or the details had been made available.
Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.
12A‑25 Meaning of AMIT DIR payment
An AMIT DIR payment means any of the following:
(a) an *AMIT dividend payment;
(b) an *AMIT interest payment;
(c) an *AMIT royalty payment.
12A‑30 Meaning of AMIT dividend payment
(1) This section applies to a trust that is an *AMIT for an income year.
(2) The object of this section is to ensure that the total of the *AMIT dividend payments that the trustee of the *AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).
(3) The amount is the total of the *determined member components for the *AMIT for the income year of the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F.
(4) A payment (the actual or deemed payment) that the trustee of a trust makes in relation to an income year is an AMIT dividend payment in relation to that year. However, the amount of the AMIT dividend payment is worked out under the following method statement, and may be:
(a) the amount of the actual or deemed payment; or
(b) the amount of the actual or deemed payment, increased or reduced as a result of the method statement.
Note: The payment by the trustee may be an actual payment, or a deemed payment under section 12A‑205.
Method statement
Step 1. Work out what it is reasonable to expect will be the amount mentioned in subsection (3).
Step 2. The AMIT dividend payment is so much of the step 1 amount as is reasonable having regard to:
(a) the object of this section; and
(b) the amounts of any earlier AMIT dividend payments made by the trustee in relation to the income year; and
(c) the expected amounts of any later AMIT dividend payments the trustee expects to make in relation to the income year.
(5) The amount mentioned in subsection (3) and the expected amounts of any later *AMIT dividend payments are to be worked out on the basis of the trustee’s knowledge when the payment is made.
(6) Subsection (5) does not apply if the payment is a payment arising because of the operation of section 12A‑205 (deemed payments).
(7) However, the payment is not an AMIT dividend payment in relation to the income year if:
(a) the payment is a *post‑AMMA actual payment in respect of another payment; and
(b) the other payment arises because of the operation of section 12A‑205; and
(c) the other payment is an AMIT dividend payment.
12A‑35 Meaning of AMIT interest payment
(1) This section applies to a trust that is an *AMIT for an income year.
(2) The object of this section is to ensure that the total of the *AMIT interest payments that the trustee of the *AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).
(3) The amount is the total of the *determined member components for the *AMIT for the income year of the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F.
(4) To work out the amount of an AMIT interest payment, apply subsections 12A‑30(4), (5), (6) and (7). For this purpose:
(a) treat references in those subsections to AMIT dividend payments as instead being references to AMIT interest payments; and
(b) treat the reference in subsection 12A‑30(4) to “the amount mentioned in subsection (3)” as instead being a reference to “the amount mentioned in subsection 12A‑35(3)”.
12A‑40 Meaning of AMIT royalty payment
(1) This section applies to a trust that is an *AMIT for an income year.
(2) The object of this section is to ensure that the total of the *AMIT royalty payments that the trustee of the *AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).
(3) The amount is the total of the *determined member components for the *AMIT for the income year of the character of a *royalty that is subject to a requirement to withhold under Subdivision 12‑F.
(4) To work out the amount of an AMIT royalty payment, apply subsections 12A‑30(4), (5), (6) and (7). For this purpose:
(a) treat references in those subsections to AMIT dividend payments as instead being references to AMIT royalty payments; and
(b) treat the reference in subsection 12A‑30(4) to “the amount mentioned in subsection (3)” as instead being a reference to “the amount mentioned in subsection 12A‑40(3)”.
Subdivision 12A‑B—Distributions by AMITs relating to Subdivision 12‑H fund payments
Guide to Subdivision 12A‑B
12A‑100 What this Subdivision is about
Withholding liabilities under Subdivision 12‑H do not apply in relation to deemed payments arising under Subdivision 12A‑C analogous to fund payments under Subdivision 12‑H (although analogous liabilities may arise under Subdivision 12A‑C).
AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.
Table of sections
Operative provisions
12A‑105 Deemed payments—no obligation to withhold under Subdivision 12‑H
12A‑110 Meaning of fund payment—AMITs
Operative provisions
12A‑105 Deemed payments—no obligation to withhold under Subdivision 12‑H
(1) The trustee mentioned in subsection 12‑385(1) need not withhold an amount under that subsection from the payment mentioned in that subsection if the payment arises because of the operation of section 12A‑205 (deemed payments).
Note: The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A‑C).
(2) The *custodian mentioned in subsection 12‑390(1) need not withhold an amount under that subsection from the later payment mentioned in that subsection if:
(a) the later payment arises because of the operation of section 12A‑205 (deemed payments); or
(b) the later payment is a *post‑AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a).
Note: Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A‑C).
(3) The entity mentioned in subsection 12‑390(4) need not withhold an amount under that subsection from the payment mentioned in that subsection if:
(a) the payment arises because of the operation of section 12A‑205 (deemed payments); or
(b) the payment is a *post‑AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a).
Note: The entity may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A‑C).
(4) Disregard this section for the purposes of section 12‑395.
12A‑110 Meaning of fund payment—AMITs
(1) This section applies to a trust that is an *AMIT for an income year.
(2) The object of this section is to ensure that the total of the *fund payments that the trustee of the *AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3).
(3) The amount is the sum of the following amounts:
(a) total of the *determined member components for the *AMIT for the income year of a character relating to assessable income, disregarding determined member components (the excluded components) of any of the following characters:
(i) the character of a *discount capital gain from a *CGT asset that is not *taxable Australian property;
(ii) the character of a *capital gain (other than a discount capital gain) from a CGT asset that is not taxable Australian property;
(iii) the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to, or exempted from, a requirement to withhold under Subdivision 12‑F;
(iv) the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to, or exempted from, a requirement to withhold under Subdivision 12‑F;
(v) the character of a *royalty that is subject to, or exempted from, a requirement to withhold under Subdivision 12‑F;
(vi) the character of *ordinary income, or *statutory income, from a source other than an *Australian source;
(vii) if a legislative instrument under subsection (4) specifies a character—that character;
(b) the total of each *capital loss of the AMIT from a *CGT event that:
(i) happened in the income year to a CGT asset that is not taxable Australian property; and
(ii) has been applied against a capital gain from a CGT event that happened in relation to a CGT asset that is taxable Australian property;
but only to the extent that each such capital loss has been so applied in the income year;
(c) the total of each amount to which subsection (3A) applies in relation to the income year.
(3A) If:
(a) the AMIT has a *net capital loss for an earlier income year; and
(b) one or more of the *capital losses the trust made during that earlier income year were from *CGT events that happened in relation to *CGT assets that were not *taxable Australian property; and
(c) in relation to the income year mentioned in paragraph (3)(c), some or all of the net capital loss is applied against a *capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property;
this subsection applies, for the income year mentioned in paragraph (3)(c), to an amount equal to so much of the net capital loss that is so applied as related to capital losses mentioned in paragraph (b) of this subsection.
(4) The Commissioner may, by legislative instrument, specify one or more characters for the purposes of subparagraph (3)(a)(vii).
(5) A payment (the actual or deemed payment) that the trustee of a trust makes in relation to an income year is a fund payment in relation to that year. However, the amount of the fund payment is worked out under the following method statement, and may be:
(a) the amount of the actual or deemed payment; or
(b) the amount of the actual or deemed payment, increased or reduced as a result of the method statement.
Note: The payment by the trustee may be an actual payment, or a deemed payment under section 12A‑205.
Method statement
Step 1. Reduce the actual or deemed payment by so much of it that is attributable to the excluded components.
Step 2. Work out what it is reasonable to expect will be the amount mentioned in subsection (3).
Do so on the basis that a *capital gain from *taxable Australian property of the trust that was or would be reduced under step 3 of the method statement in subsection 102‑5(1) of the Income Tax Assessment Act 1997 were double the amount it actually is.
Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to:
(a) the object of this section; and
(b) the step 1 amount; and
(c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and
(d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year.
(6) The amount mentioned in subsection (3) and the expected amounts of any later *fund payments are to be worked out on the basis of the trustee’s knowledge when the payment is made.
(7) Subsection (6) does not apply if the payment is a payment arising because of the operation of section 12A‑205 (deemed payments).
(8) However, the payment is not a fund payment in relation to the income year if:
(a) the payment (the actual payment) is a *post‑AMMA actual payment in respect of another payment; and
(b) the other payment arises because of the operation of section 12A‑205; and
(c) the other payment is a fund payment.
(9) An amount is also not a fund payment in relation to the income year unless it is paid:
(a) during the income year; or
(b) within 3 months after the end of the income year; or
(c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 years) allowed by the Commissioner.
(10) The Commissioner may allow a longer period as mentioned in paragraph (9)(c) only if the Commissioner is of the opinion that:
(a) if the other payment arises at a time because of the operation of section 12A‑205 (deemed payments)—the *AMIT complied with subsection 276‑455(1) of the Income Tax Assessment Act 1997 in respect of the income year (requirement to give AMMA statements within 3 months); or
(b) otherwise—the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.
Subdivision 12A‑C—Deemed payments by AMITs etc.
Guide to Subdivision 12A‑C
12A‑200 What this Subdivision is about
When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member.
The payment is generally the sum of the determined member components reflected in the statement that are of a character relating to assessable income, reduced by any previous actual payments related to those components.
The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments.
Table of sections
Operative provisions
12A‑205 Issue of AMMA statement etc. deemed to be payment
12A‑210 Post‑AMMA actual payment and pre‑AMMA actual payment in respect of deemed payment
12A‑215 AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc.
12A‑220 Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc.
Operative provisions
12A‑205 Issue of AMMA statement etc. deemed to be payment
(1) This section applies if:
(a) an entity (the first recipient) is or was a *member of a *withholding MIT in respect of an income year; and
(b) the withholding MIT is an *AMIT for the income year; and
(c) the AMIT gives the first recipient an *AMMA statement for the income year.
(2) For the purposes of this Part, Subdivision 840‑M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936:
(a) treat the trustee of the *AMIT as having made a payment (the first deemed payment) of an amount to the first recipient at the time the AMIT gave the first recipient the *AMMA statement; and
(b) treat the amount of the first deemed payment as being the amount worked out as follows:
(i) first, work out the total of all the *determined member components of all the *members of the AMIT of a character relating to assessable income for the income year;
(ii) next, identify each of the *pre‑AMMA actual payments (if any) made to those members in respect of all payments by the trustee to those members that arise from the operation of paragraph (a);
(iii) next, identify every *AMIT DIR payment (if any) and each *fund payment (if any) that arises from each such pre‑AMMA actual payment;
(iv) next, reduce the result of subparagraph (i) by the sum of each such AMIT DIR payment and fund payment;
(v) next, work out how much of the result of subparagraph (iv) is referable to the first recipient.
(3) Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936, treat the first recipient as having derived the first deemed payment just before the end of the income year to which the *AMMA statement relates.
(4) Subsection (5) applies if:
(a) the first recipient is a *custodian; and
(b) another entity (the subsequent recipient):
(i) starts to have, at a time, an entitlement to an amount that is reasonably attributable to all or part of the first deemed payment; or
(ii) would start to have, at a time, such an entitlement if the first deemed payment were an actual payment of an amount.
(5) For the purposes of this Part, Subdivision 840‑M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936:
(a) treat the first recipient as having made a payment (the subsequent deemed payment) of an amount to the subsequent recipient at that time; and
(b) treat the amount of the subsequent deemed payment as being the amount of the entitlement mentioned in subparagraph (4)(b)(i) or (ii); and
(c) treat the amount of the subsequent deemed payment as being attributable to the first deemed payment.
(6) Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936, treat the subsequent recipient as having derived the subsequent deemed payment at the time the subsequent deemed payment arises.
(7) If:
(a) an entity is a subsequent recipient mentioned in subsection (4) (including as a result of a previous operation of this subsection); and
(b) subsection (5) applies with the result that a payment is treated as having been made to the entity; and
(c) the entity is a *custodian;
apply subsections (4), (5) and (6) again as if the entity were the first recipient mentioned in subsection (4).
Note: This means that the entity is treated under subsection (5) as having made a payment to another entity if the other entity has (or would have) an entitlement as mentioned in paragraph (4)(b).
12A‑210 Post‑AMMA actual payment and pre‑AMMA actual payment in respect of deemed payment
(1) A payment that does not arise because of the operation of section 12A‑205 is a post‑AMMA actual payment in respect of a payment (the deemed payment) that does arise because of the operation of that section if:
(a) the payment and the deemed payment are both attributable to the same *member component for the *AMIT mentioned in that section; and
(b) the actual payment is made at or after the time the deemed payment arises.
(2) A payment that does not arise because of the operation of section 12A‑205 is a pre‑AMMA actual payment in respect of a payment (the deemed payment) that does arise because of the operation of that section if:
(a) the payment and the deemed payment are both attributable to the same *member component for the *AMIT mentioned in that section; and
(b) the actual payment is made before the time the deemed payment arises.
12A‑215 AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc.
(1) A trustee of a trust that is an *AMIT for an income year must pay an amount to the Commissioner if:
(b) the trustee makes a payment (the deemed payment) that arises because of the operation of section 12A‑205; and
(c) the payment is made to an entity (the recipient) that is:
(i) if the payment is a *fund payment and the trust is a *withholding MIT in relation to the income year—an entity covered by section 12‑410; or
(ii) if the payment is an *AMIT DIR payment made in relation to the income year—an entity that is not an Australian resident.
Note 1: 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 2: If the payment is made to a recipient not covered by subparagraph (c)(i) or (ii), the trustee is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see sections 12‑395 and 12A‑15.
(2) The amount that the trustee must pay is equal to the amount that the trustee would, if the assumptions in subsection (3) were made, have had to withhold under:
(a) if the deemed payment is a *fund payment—section 12‑385; or
(b) if the deemed payment is an *AMIT DIR payment—section 12‑210, 12‑245 or 12‑280.
(3) The assumptions are that:
(a) the deemed payment had not arisen because of the operation of section 12A‑205; and
(b) the deemed payment had instead been an actual payment; and
(c) if the deemed payment is an *AMIT DIR payment:
(i) where it corresponds to the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F—the trust had been a company, and it had paid it as a dividend; or
(ii) where it corresponds to the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F—it were the payment of interest; or
(iii) where it corresponds to the character of a *royalty that is subject to a requirement to withhold under Subdivision 12‑F—it were the payment of a royalty; and
(d) if the deemed payment is an AMIT DIR payment—the condition in either or both of paragraphs 12‑210(a) or (b), of paragraphs 12‑245(a) or (b) or of paragraphs 12‑280(a) or (b) (as the case requires) were satisfied.
(4) The trustee may recover from the recipient as a debt an amount that the trustee has paid to the Commissioner under subsection (1).
(5) The trustee is entitled to set off an amount that the trustee can recover from the recipient under subsection (4) against debts due by the trustee to the recipient.
12A‑220 Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc.
(1) A *custodian must pay an amount to the Commissioner if:
(a) the trustee of a trust that was an *AMIT for an income year and was a *withholding MIT in relation to the income year made a payment (the first deemed payment) that:
(i) arose because of the operation of section 12A‑205; and
(ii) was a *fund payment or an *AMIT DIR payment; and
(b) the custodian makes a payment (the subsequent deemed payment) that arises because of the operation of section 12A‑205; and
(c) the first deemed payment gave rise to the subsequent deemed payment, because of one or more operations of section 12A‑205; and
(d) the subsequent deemed payment or part of it (the covered part) was covered by a notice or information under:
(i) if the first deemed payment was a fund payment—section 12‑395; or
(ii) if the first deemed payment was an AMIT DIR payment—section 12A‑15; and
(e) the subsequent deemed payment is made to an entity (the recipient) that is:
(i) if the first deemed payment was a fund payment—covered by section 12‑410; or
(ii) if the first deemed payment was an AMIT DIR payment—not an Australian resident.
Note 1: 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 2: If the payment is made to a recipient not covered by subparagraph (e)(i) or (ii), the trustee is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see sections 12‑395 and 12A‑15.
(2) The amount that the *custodian must pay is the amount that the custodian would, if the assumptions in subsection (3) were made, have had to withhold under:
(a) if the first deemed payment was a *fund payment—subsection 12‑390(1); or
(b) if the first deemed payment was an *AMIT DIR payment—section 12‑210, 12‑245 or 12‑280.
(3) The assumptions are that:
(a) the subsequent deemed payment had not arisen because of the operation of section 12A‑205; and
(b) the subsequent deemed payment had instead been an actual payment; and
(c) if the first deemed payment was an *AMIT DIR payment:
(i) where the first deemed payment corresponded to the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F—the *custodian had been a company, and it had paid the subsequent deemed payment as a dividend; or
(ii) where the first deemed payment corresponded to the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to a requirement to withhold under Subdivision 12‑F—the subsequent deemed payment were the payment of interest; or
(iii) where the first deemed payment corresponded to the character of a *royalty that is subject to a requirement to withhold under Subdivision 12‑F—the subsequent deemed payment were the payment of a royalty; and
(d) if the first deemed payment was an AMIT DIR payment—the condition in either or both of paragraphs 12‑210(a) or (b), of paragraphs 12‑245(a) or (b) or of paragraphs 12‑280(a) or (b) (as the case requires) were satisfied.
(4) The *custodian may recover from the recipient as a debt an amount that the custodian has paid to the Commissioner under subsection (1).
(5) The *custodian is entitled to set off an amount that the custodian can recover from the recipient under subsection (4) against debts due by the custodian to the recipient.
Division 13—Alienated personal services payments
Table of sections
13‑1 Object of this Division
13‑5 Payment to the Commissioner in respect of alienated personal services payments
13‑10 Alienated personal services payments
13‑15 Personal services payment remitters
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01
13‑1 Object of this Division
The object of this Division is to ensure the efficient collection of income tax (and other liabilities) on any *personal services income included in an individual’s assessable income under Division 86 of the Income Tax Assessment Act 1997 by:
(a) putting *personal services entities receiving *alienated personal services payments in a position similar to their position if amounts were withheld from the payments under Division 12; but
(b) doing so in a way that enables them to comply with their obligations without having to withhold amounts separately from each payment.
Note: Under Division 86 of the Income Tax Assessment Act 1997 (about alienation of personal services income), an individual’s personal services income that is gained or produced by another entity is in some cases included in the individual’s assessable income. Payments of this income by the entity might not be caught by Division 12.
13‑5 Payment to the Commissioner in respect of alienated personal services payments
Obligation to pay amounts
(1) A *personal services entity must pay an amount of tax to the Commissioner if:
(a) it receives an *alienated personal services payment that relates to an individual’s personal services income; and
(b) it receives the payment during a *PAYG payment period for which it is a *personal services payment remitter.
Working out the amounts
(2) Use this method statement to work out the amount:
Method statement
Step 1. Identify the payments that the *personal services entity makes to the individual during the period mentioned in paragraph (1)(b) that are *withholding payments covered by section 12‑35.
Step 2. Identify the amounts that:
(a) are included in the individual’s assessable income under section 86‑15 of the Income Tax Assessment Act 1997; and
(b) relate to *alienated personal services payments the entity receives during that period.
Step 3. Work out the sum of all the amounts that Division 12 would require the entity to withhold in respect of that period if both of these were taken into account:
(a) the payments identified in step 1; and
(b) the amounts identified in step 2, as if they were payments of salary covered by section 12‑35.
Step 4. Work out the sum of all the amounts withheld under section 12‑35 from the payments identified in step 1.
Step 5. Subtract the sum under step 4 from the sum under step 3.
Note: Example: For the PAYG payment period of 1 April 2001 to 30 June 2001, NewIT Pty. Ltd. received amounts totalling $18,000 that were Ron’s personal services income. NewIT does not conduct a personal services business.
Note: During the period, NewIT paid Ron $3,000 in salary. This is a withholding payment covered by section 12‑35 (step 1).
Note: $15,000 of the amount NewIT received is included in Ron’s assessable income under section 86‑15 of the Income Tax Assessment Act 1997 (step 2).
Note: If NewIT had paid the $15,000 in salary to Ron within 14 days after the end of the PAYG payment period, the amount that NewIT would have had to withhold under Division 12 on the total amount of $18,000 would have been $4,000 (step 3).
Note: NewIT withheld $500 from the salary payment of $3,000, as required by section 12‑35 (step 4).
Note: On the basis of these facts, the amount NewIT must pay to the Commissioner (step 5) is:
Start formula $4,000 minus $500 equals $3,500 end formula
(3) Subject to subsections (4) and (5), the *personal services entity must pay the amount to the Commissioner by the end of the 21st day after the end of the *PAYG payment period.
Note: A different rule applies for alienated personal services payments that large withholders and medium withholders make during the 2000‑01 income year. See section 13‑20.
(4) If:
(a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *PAYG payment period; and
(b) the personal services entity’s PAYG payment period is a *quarter;
the entity must pay that amount to the Commissioner as shown in the table:
(5) If:
(a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *PAYG payment period; and
(b) the personal services entity’s PAYG payment period is a month;
the entity must pay that amount to the Commissioner:
(c) by the end of the 28th day of the month following that period unless the PAYG payment period is a December; or
(d) by the end of the 28th day of the next February if the PAYG payment period is a December.
13‑10 Alienated personal services payments
An alienated personal services payment is a payment (including a payment in the form of a *non‑cash benefit) that a *personal services entity receives and that relates to an amount that:
(a) is included in an individual’s assessable income under Division 86 of the Income Tax Assessment Act 1997; or
(b) would be so included but for the fact that the entity received the income in the course of conducting a *personal services business.
For valuation of non‑cash benefits, see sections 21 and 21A of the Income Tax Assessment Act 1936.
13‑15 Personal services payment remitters
General
(1) A *personal services entity is a personal services payment remitter for a *PAYG payment period if, in the income year preceding that period:
(a) the entity’s *ordinary income or *statutory income included a person’s *personal services income; and
(b) the entity was not conducting a *personal services business.
Businesses not previously receiving personal services income
(2) A *personal services entity is a personal services payment remitter for a *PAYG payment period if:
(a) the entity’s *ordinary income or *statutory income did not include an individual’s *personal services income in any income year preceding that period; and
(b) it is reasonable to expect that, in the income year during which the period occurs, the entity’s income will include a person’s *personal services income that the entity will not have received in the course of conducting a *personal services business.
(3) It is not reasonable to expect that the *personal services entity will receive a person’s *personal services income in the course of conducting a *personal services business if it is reasonable to expect that:
(a) the entity will receive at least 80% of that income from the same entity (or one entity and its *associates); and
(b) the entity will not meet the results test under section 87‑18 of the Income Tax Assessment Act 1997.
Personal services business determinations taking effect
(4) However, a *personal services entity is not a personal services payment remitter for a *PAYG payment period if, during that period or an earlier PAYG payment period in the same income year, a *personal services business determination relating to the entity takes effect.
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01
(1) Subject to subsection (2), if:
(a) a *personal services entity must, under section 13‑5, pay an amount for *alienated personal services payments it received during a particular *PAYG payment period; and
(b) the period ends in a *quarter in the *financial year starting on 1 July 2000;
the payment must be paid to the Commissioner by the end of the 21st day after the end of the quarter.
(2) If:
(a) the *personal services entity is a *deferred BAS payer on the 21st day after the end of the *quarter; and
(b) the quarter ends on 31st March or 30th June of 2001;
the payment must be paid to the Commissioner by the end of the 28th day after the end of that quarter.
Division 14
—
Benefits, gains and taxable supplies for which amounts must be paid to the Commissioner
Table of sections
14‑1 Object of this Subdivision
14‑5 Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
14‑10 Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit
14‑15 Payer can recover amount paid to the Commissioner
14‑50 Object of this Subdivision
14‑55 Liability for TFN withholding tax
14‑60 Investment body may recover TFN withholding tax from investor
14‑65 Application of rules in Division 18
14‑75 Overpayment of TFN withholding tax
14‑85 Other laws do not exempt from TFN withholding tax
Subdivision 14‑A—Non‑cash benefits
14‑1 Object of this Subdivision
The object of this Subdivision is:
(a) to put entities that provide *non‑cash benefits, and entities that receive them, in a position similar to their position under Division 12 if payments of money had been made instead of the non‑cash benefits being provided; and
(b) in that way, to prevent entities from avoiding their obligations under Division 12 by providing non‑cash benefits.
14‑5 Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
(1) An entity (the payer) must pay an amount to the Commissioner before providing a *non‑cash benefit to another entity (the recipient) if Division 12 would require the payer to withhold an amount (the notionally withheld amount) if, instead of providing the benefit to the recipient, the payer made a payment to the recipient in money equal to the *market value of the benefit when the benefit is provided.
(2) The amount to be paid to the Commissioner is equal to the notionally withheld amount.
Note: Example: Nick is a building contractor who has entered into a voluntary agreement with Mike for the purposes of section 12‑55. Nick proposes to give Mike his old utility van (whose market value is $1,000) as payment for work Mike has done for him over a fortnight.
Note: If Nick were instead to pay Mike $1,000, Nick would have had to withhold $203 under Division 12 (in accordance with withholding rates current at the time).
Note: This section requires Nick to pay $203 to the Commissioner before giving the van to Mike.
(3) This section does not apply to providing:
(a) a *fringe benefit; or
(b) a benefit that is an exempt benefit under the Fringe Benefits Tax Assessment Act 1986; or
(c) a benefit that would be an exempt benefit under that Act if paragraphs (d) and (e) of the definition of employer in subsection 136(1) of that Act were omitted; or
(d) a benefit constituted by the acquisition of an *ESS interest *under an employee share scheme to which Subdivision 83A‑B or 83A‑C of the Income Tax Assessment Act 1997 applies.
14‑10 Dividend, interest or royalty received, for a foreign resident, in the form of a non‑cash benefit
If:
(a) an entity (the payer) receives in the form of a *non‑cash benefit:
(i) a *dividend of a company; or
(ii) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936); or
(iii) a *royalty; and
(b) section 12‑215, 12‑250 or 12‑285 would have required the payer to withhold an amount if the dividend, interest or royalty had been a payment in money;
the payer must pay that amount to the Commissioner before providing the benefit (or part of it) to another entity.
14‑15 Payer can recover amount paid to the Commissioner
(1) The payer may recover from the recipient as a debt an amount that the payer has paid to the Commissioner under section 14‑5.
(2) If the payer has paid an amount to the Commissioner under section 14‑10, the payer may:
(a) if the payer has provided all of the benefit to another entity—recover the amount from that other entity as a debt; or
(b) if the payer has provided a part of the benefit to another entity—recover from that other entity as a debt the corresponding proportion of the amount paid to the Commissioner.
(3) If the payer can recover an amount from another entity under this section, the payer is entitled to set the amount off against debts due by the payer to the other entity.
Subdivision 14‑B—Accruing gains
14‑50 Object of this Subdivision
The object of this Subdivision is to put the parties to a *Part VA investment with an accruing gain in a position similar to what would have been their position under Subdivision 12‑E (Payments where TFN or ABN not quoted) if the *investment body had paid the gain in money to the *investor at the end of the income year.
14‑55 Liability for TFN withholding tax
(1) *TFN withholding tax is payable if:
(a) in relation to a *Part VA investment, an amount (the accrued gain) is included in the *investor’s assessable income for an income year under section 159GQ of the Income Tax Assessment Act 1936 (about gains accruing on securities); and
(b) the investment:
(i) is of a kind mentioned in item 1 or 2 of the table in subsection 202D(1) of that Act; or
(ii) is of a kind mentioned in item 3 of that table and is non‑transferable; and
(c) the term of the investment does not end during the income year; and
(d) section 12‑140 would have required the *investment body to withhold an amount (the TFN withholding amount) from a payment of the accrued gain to the investor, if the investment body had made the payment at the end of the income year and section 12‑150 had not been enacted.
Note: Section 202D of the Income Tax Assessment Act 1936 lists the investments in connection with which tax file numbers are to be quoted.
(2) The amount of *TFN withholding tax is equal to the TFN withholding amount.
(3) The *TFN withholding tax is payable jointly and severally by the *investor and the *investment body.
(4) However, if the *investment body is the Commonwealth or an *untaxable Commonwealth entity:
(a) the *TFN withholding tax is payable by the *investor; and
(b) the investor is taken to have authorised the investment body to pay the TFN withholding tax on the investor’s behalf.
(5) The *TFN withholding tax is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(a).
Note 1: When it is due and payable, the TFN withholding tax is payable to the Commissioner: see paragraph 255‑5(1)(b).
Note 2: An entity by whom it is payable must pay it to the Commissioner in accordance with Subdivision 16‑B: see subsection 16‑70(3). If any of it remains unpaid, the entity is liable to pay general interest charge: see section 16‑80.
Note 3: The Commissioner may defer the time at which TFN withholding tax becomes due and payable: see section 255‑10.
(6) The adoption (under section 18 of the Income Tax Assessment Act 1936) of an accounting period ending on a day other than 30 June is disregarded for the purposes of:
(a) this section; and
(b) the application of Division 16E of Part III of that Act for the purposes of this section.
14‑60 Investment body may recover TFN withholding tax from investor
(1) The *investment body may recover from the *investor as a debt any of the *TFN withholding tax that it pays.
(2) The *investment body is entitled to set off an amount that it can recover from the *investor under this section against:
(a) a debt due by it to the investor; or
(b) an amount that is accruing to the investor, or stands to the investor’s credit, in respect of the *Part VA investment, even if the amount is not yet due.
14‑65 Application of rules in Division 18
These provisions:
(a) subsection 18‑15(1) and sections 18‑20 and 18‑25 (about credits for amounts withheld from withholding payments); and
(b) section 18‑80 (about refunds when exemption declaration not given);
apply as if any of the *TFN withholding tax that has been paid were an amount withheld under subsection 12‑140(1) from a *withholding payment covered by that subsection and made to the *investor during:
(c) unless the *investor has adopted (under section 18 of the Income Tax Assessment Act 1936) an accounting period ending on a day other than 30 June—the income year referred to in paragraph 14‑55(1)(a); or
(d) if the investor has adopted such an accounting period—the income year in which the TFN withholding tax is paid.
Note: Unless the investor has adopted such an accounting period, the credit under section 18‑15, 18‑20 or 18‑25 will be in respect of the income year before the one in which the TFN withholding tax is paid.
14‑75 Overpayment of TFN withholding tax
If *TFN withholding tax has been overpaid:
(a) the Commissioner must refund the amount overpaid; and
(b) the *investor is not entitled to a credit under section 18‑15, 18‑20 or 18‑25 in respect of the amount overpaid.
14‑85 Other laws do not exempt from TFN withholding tax
(1) A provision of a law passed before the commencement of this section that purports to exempt an entity from liability to pay *TFN withholding tax, or to pay taxes that include TFN withholding tax, does not exempt that entity from liability to pay TFN withholding tax.
(2) A provision of a law passed at or after the commencement of this section that purports to exempt an entity from liability to pay taxes under the laws of the Commonwealth, or to pay certain taxes under those laws that include *TFN withholding tax, is not to be interpreted as exempting the entity from liability to pay TFN withholding tax, unless it specifically mentions TFN withholding tax.
Subdivision 14‑C—Shares and rights under employee share schemes
Table of sections
14‑155 Liability for TFN withholding tax (ESS)
14‑160 Employer may give individual tax file numbers to provider
14‑165 Provider may recover TFN withholding tax (ESS) from individual
14‑170 Application of rules in Division 18
14‑175 Overpayment of TFN withholding tax (ESS)
14‑180 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997
14‑155 Liability for TFN withholding tax (ESS)
(1) Tax (TFN withholding tax (ESS)) imposed by the Income Tax (TFN Withholding Tax (ESS)) Act 2009 is payable if:
(a) a company (the provider) provides one or more *ESS interests to an individual under an *employee share scheme; and
(b) as a result, an amount is included in the individual’s assessable income under Division 83A of the Income Tax Assessment Act 1997 for an income year (taking into account subsection (2) of this section); and
(c) the individual has quoted neither of the following to the provider before the end of the income year:
(i) if the individual acquired the interests in relation to any services provided to the provider, or to a *subsidiary of the provider, in the course or furtherance of an *enterprise *carried on by the individual—the individual’s *ABN;
(ii) in any case—the individual’s *tax file number.
(2) For the purposes of paragraph (1)(b), disregard sections 83A‑33 and 83A‑35 of the Income Tax Assessment Act 1997 (about reducing the amount included in the individual’s assessable income).
Note: Disregard the 30 day rule in subsections 83A‑115(3) and 83A‑120(3) of the Income Tax Assessment Act 1997 for the purposes of this Subdivision: see subsection 392‑5(6) in this Schedule.
(3) The *TFN withholding tax (ESS) is payable by the provider.
(4) The *TFN withholding tax (ESS) is due and payable at the end of 21 days after the end of the income year referred to in paragraph (1)(b).
Note 1: When it is due and payable, the TFN withholding tax (ESS) is payable to the Commissioner: see paragraph 255‑5(1)(b).
Note 2: The provider must pay the TFN withholding tax (ESS) to the Commissioner in accordance with Subdivision 16‑B: see subsection 16‑70(4). If any of it remains unpaid, the provider is liable to pay general interest charge: see section 16‑80.
Note 3: The Commissioner may defer the time at which TFN withholding tax (ESS) becomes due and payable: see section 255‑10.
14‑160 Employer may give individual tax file numbers to provider
(1) The individual is taken to have authorised a *subsidiary (the employer) of the provider to inform the provider of the individual’s *tax file number if:
(a) the individual has made a *TFN declaration in relation to the employer; and
(b) some or all of the *ESS interests mentioned in paragraph 14‑155(1)(a) were provided to the individual in relation to the individual’s employment by the employer.
(2) If the employer does so, the individual is taken, for the purposes of this Subdivision and Division 392 (Employee share scheme reporting), to have quoted his or her *tax file number to the provider.
14‑165 Provider may recover TFN withholding tax (ESS) from individual
(1) The provider may recover from the individual as a debt any of the *TFN withholding tax (ESS) the provider pays.
(2) The provider is entitled to set off an amount that the provider can recover from the individual under this section against a debt due by the provider to the individual.
14‑170 Application of rules in Division 18
These provisions:
(a) subsection 18‑15(1) (about credits for amounts withheld from withholding payments); and
(b) sections 18‑65 and 18‑70 (about refunds of amounts withheld in error);
apply as if any of the *TFN withholding tax (ESS) that has been paid were an amount withheld under section 12‑35 from a *withholding payment made to the individual and covered by that section.
14‑175 Overpayment of TFN withholding tax (ESS)
If *TFN withholding tax (ESS) has been overpaid:
(a) the Commissioner must refund the amount overpaid; and
(b) the individual is not entitled to a credit under section 18‑15 in respect of the amount overpaid.
14‑180 Application of certain provisions of Division 83A of the Income Tax Assessment Act 1997
The following provisions of the Income Tax Assessment Act 1997 have effect for the purposes of this Subdivision in the same way as they have for the purposes of Division 83A of that Act:
(a) section 83A‑130 (about takeovers and restructures);
(b) section 83A‑305 (about associates);
(c) section 83A‑320 (about trusts);
(d) section 83A‑325 (about relationships similar to employment);
(e) section 83A‑335 (about stapled securities);
(f) section 83A‑340 (about indeterminate rights).
Subdivision 14‑D—Capital proceeds involving foreign residents and taxable Australian property
Table of sections
14‑200 Certain acquisitions of taxable Australian property from foreign residents
14‑205 Effect of look‑through earnout rights
14‑210 Whether an entity is a relevant foreign resident
14‑215 Excluded transactions
14‑220 Commissioner clearance certificates
14‑225 Entity declarations
14‑230 Administrative penalties for false or misleading declarations
14‑235 Varying amounts to be paid to the Commissioner
14‑200 Certain acquisitions of taxable Australian property from foreign residents
(1) You must pay to the Commissioner an amount if:
(a) you become the owner of a *CGT asset as a result of *acquiring it from one or more entities under one or more transactions; and
(b) subsection 14‑210(1) (about foreign residents) applies to at least one of those entities at the time one of those transactions is entered into; and
(c) at that time, the CGT asset is:
(i) *taxable Australian real property; or
(ii) an *indirect Australian real property interest; or
(iii) an option or right to acquire such property or such an interest;
unless a transaction referred to in paragraph (a) is excluded under section 14‑215.
Note: You must pay the amount on account of income tax possibly payable by the entities on their capital proceeds resulting from your acquisition of the CGT asset.
(2) You must pay the amount to the Commissioner on or before the day you became the *CGT asset’s owner.
Note: There are penalties for failing to pay the amount (see Division 16).
(3) The amount to be paid to the Commissioner is:
(a) unless paragraph (b) applies—an amount equal to 15% of:
(i) the first element of the *CGT asset’s *cost base just after the *acquisition, ignoring paragraphs 112‑36(1)(b) and (c) of the Income Tax Assessment Act 1997 (about the effect of look‑through earnout rights); less
(ii) if the acquisition is the result of you exercising an option—any payment you made, and the *market value of any property you gave, for the option (or to renew or extend it); or
(b) the varied amount applying under section 14‑235.
(4) This section does not apply if the amount that would otherwise be payable is nil.
14‑205 Effect of look‑through earnout rights
Acquisitions of taxable Australian property from foreign residents
(1) You must pay to the Commissioner an amount if:
(a) you are required under section 14‑200 to pay an amount to the Commissioner in relation to your *acquisition of a *CGT asset; and
(b) under a *look‑through earnout right relating to the CGT asset and the acquisition, you provide a *financial benefit to one or more entities; and
(c) subsection 14‑210(1) (about foreign residents) would apply to at least one of those entities at the time you provide the financial benefit if section 14‑210 were modified as described in subsection (2) of this section; and
(d) an amount is not already required to be withheld from a *withholding payment relating to the financial benefit.
Note 1: To work out the amount payable, see subsection (4).
Note 2: You must pay the amount on account of income tax possibly payable by the entities on their increased capital proceeds from receiving the financial benefit.
Modifications of the relevant foreign residents test
(2) The modifications of section 14‑210 are as follows:
When you must pay the amount
(3) You must pay the amount to the Commissioner on or before the day you provide the *financial benefit.
Note: There are penalties for failing to pay the amount (see Division 16).
(4) The amount to be paid to the Commissioner is:
(a) unless paragraph (b) applies—an amount equal to 15% of the *market value of the *financial benefit; or
(b) the varied amount applying under section 14‑235.
14‑210 Whether an entity is a relevant foreign resident
Is the entity a foreign resident at the time of the transaction?
(1) This subsection applies to an entity at the time a transaction is entered into if, at that time:
(a) you know that the entity is a foreign resident; or
(b) you reasonably believe that the entity is a foreign resident; or
(c) you do not reasonably believe that the entity is an Australian resident, and either:
(i) the entity has an address outside Australia (according to any record that is in your possession, or is kept or maintained on your behalf, about the transaction); or
(ii) you are authorised to provide a related financial benefit to a place outside Australia (whether to the entity or to anyone else); or
(d) the entity has a connection outside Australia of a kind specified in the regulations; or
(e) the *CGT asset to which the transaction relates is:
(i) *taxable Australian real property; or
(ii) an *indirect Australian real property interest, the holding of which causes a company title interest (within the meaning of Part X of the Income Tax Assessment Act 1936) to arise.
Note: This subsection is relevant to whether you must pay an amount to the Commissioner under section 14‑200.
Exception—the entity gives you a clearance certificate
(2) Despite subsection (1), that subsection does not apply to the entity in relation to the transaction if:
(a) before you pay the Commissioner under section 14‑200 in relation to the *CGT asset to which the transaction relates, the entity gives you a certificate about the entity that:
(i) was issued under subsection 14‑220(1); and
(ii) is for a period covering the time the transaction is entered into; and
(b) the CGT asset is of a kind described in paragraph (1)(e) of this section.
Exception—the entity gives you a residency or interests declaration
(3) Despite subsection (1), that subsection does not apply to the entity in relation to the transaction if:
(a) before you pay the Commissioner under section 14‑200 in relation to the *CGT asset to which the transaction relates, the entity gives you a declaration that:
(i) is about the entity or the CGT asset; and
(ii) was given under subsection 14‑225(1) or (2); and
(iii) is for a period covering the time the transaction is entered into; and
(b) when you are given the declaration, you do not know the declaration to be false; and
(c) for a declaration given under subsection 14‑225(1)—the CGT asset is not of a kind described in paragraph (1)(e) of this section.
14‑215 Excluded transactions
A transaction that results in the *acquisition of a *CGT asset is excluded under this section if:
(b) the transaction is on an *approved stock exchange; or
(c) the transaction is conducted using a crossing system (within the meaning of the *market integrity rules); or
(d) an amount is already required to be withheld (other than under Subdivision 14‑E) from a *withholding payment relating to the transaction; or
(e) subsection 26BC(3) of the Income Tax Assessment Act 1936 (about securities lending arrangements) applies in relation to the transaction as a result of the transaction being covered by subparagraph (a)(ii) of that subsection; or
(f) any of the entities to which subsection 14‑210(1) (about foreign residents) applies at the time of the transaction:
(i) is a company for which any of the conditions in paragraph 161A(1)(a) of the Corporations Act 2001 (about insolvency and external administration) is satisfied; or
(ii) is, under a *foreign law, in the same or a similar position to a company covered by subparagraph (i); or
(g) the transaction arises from any of the following:
(i) the administration of the estate of a bankrupt;
(ii) a composition or scheme of arrangement accepted under Division 6 of Part IV of the Bankruptcy Act 1966;
(iii) a debt agreement under Part IX of that Act;
(iv) a personal insolvency agreement under Part X of that Act;
(v) circumstances that are, under a foreign law, the same or similar to those in any of the above subparagraphs.
Note: This section is relevant to whether you must pay an amount to the Commissioner under section 14‑200.
14‑220 Commissioner clearance certificates
(1) The Commissioner may certify that, based on information before the Commissioner, there is nothing to suggest that an entity is or will be a foreign resident during a specified period.
Note: Such a certificate could result in you not being required to pay an amount under this Subdivision (see subsection 14‑210(2)).
(2) A certificate under subsection (1):
(a) may be issued on application to the Commissioner in the *approved form; and
(b) is to be in writing; and
(c) applies only for the purposes of this Subdivision.
(3) For the purposes of (but without limiting) paragraph 388‑50(1)(c), the Commissioner may require an application for a certificate under subsection (1) to state:
(a) whether the applicant holds or will hold specified *CGT assets on behalf of another entity during any part of the period for which the certificate is sought; and
(b) whether the applicant knows or reasonably believes that the other entity is or will be a foreign resident during that period.
Note: Section 388‑50 sets out when an application is in the approved form.
(4) A certificate issued under subsection (1) is not a legislative instrument.
14‑225 Entity declarations
Declaration that an entity is an Australian resident
(1) An entity may, in writing, declare that, for a specified period, the entity is and will be an Australian resident.
Note: Such a declaration could result in you not being required to pay an amount under this Subdivision (see subsection 14‑210(3)).
Declaration that asset not an indirect Australian real property interest
(2) An entity may, in writing, declare that, for a specified period, specified *CGT assets are *membership interests but not *indirect Australian real property interests.
Note: Such a declaration could result in you not being required to pay an amount under this Subdivision (see subsection 14‑210(3)).
Limit on the periods for which declarations have effect
(3) A period specified in a declaration under this section is of no effect to the extent that it includes days later than 6 months after the day the declaration is made.
Declarations are not legislative instruments
(4) A declaration under this section is not a legislative instrument.
14‑230 Administrative penalties for false or misleading declarations
Knowingly making false or misleading declarations
(1) You are liable to pay the Commissioner a penalty of 120 penalty units if:
(a) you make a statement; and
(b) the statement is, or purports to be, a declaration under section 14‑225; and
(c) the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and
(d) you know, at the time of making the statement, that it is so false or misleading.
Note: Division 298 contains machinery provisions for administrative penalties.
Recklessly making false or misleading declarations
(2) You are liable to pay the Commissioner a penalty of 80 penalty units if:
(a) you make a statement; and
(b) the statement is, or purports to be, a declaration under section 14‑225; and
(c) the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and
(d) you were reckless in connection with the making of the statement.
Note: Division 298 contains machinery provisions for administrative penalties.
Not taking reasonable care in making declarations
(3) You are liable to pay the Commissioner a penalty of 40 penalty units if:
(a) you make a statement; and
(b) the statement is, or purports to be, a declaration under section 14‑225; and
(c) the statement is false or misleading in a material particular, whether because of things in it or omitted from it; and
(d) you did not take reasonable care in connection with the making of the statement.
Note: Division 298 contains machinery provisions for administrative penalties.
14‑235 Varying amounts to be paid to the Commissioner
Policies relevant to varying amounts
(1) In exercising a power under this section to vary an amount, the Commissioner must have regard to the need to protect a creditor’s right to recover a debt.
Varying particular amounts
(2) The Commissioner may, in writing, vary a particular amount payable by you to the Commissioner under this Subdivision. The variation takes effect when you become aware of it.
Note: Decisions to vary, or not to vary, are reviewable (see section 20‑80).
(3) Any of the following entities may apply to the Commissioner in the *approved form for a variation under subsection (2):
(a) you;
(b) an entity from which you *acquire, or could acquire, the *CGT asset;
(c) an entity that is owed a debt by an entity covered by paragraph (b).
(4) A variation made under subsection (2) is not a legislative instrument.
Varying classes of amounts
(5) The Commissioner may, by legislative instrument, vary classes of amounts payable to the Commissioner under this Subdivision.
Amounts may be reduced to nil
(6) The Commissioner’s power under subsection (2) or (5) to vary an amount includes the power to reduce the amount to nil.
Subdivision 14‑E—GST payable on taxable supplies of certain real property
Table of sections
14‑250 Recipients of certain taxable supplies of real property must pay amounts to Commissioner
14‑255 Notification by suppliers of residential premises etc.
14‑250 Recipients of certain taxable supplies of real property must pay amounts to Commissioner
Liability to pay an amount
(1) You must pay to the Commissioner an amount if:
(a) you are the recipient (within the meaning of the *GST Act) of a *taxable supply that is, or includes, a *supply to which subsection (2) applies; and
(b) in a case where the supply is a supply of *potential residential land—either:
(i) you are not registered (within the meaning of that Act); or
(ii) you do not acquire the thing supplied for a *creditable purpose.
(2) This subsection applies to a *supply, by way of sale or long‑term lease (within the meaning of the *GST Act), of:
(a) *new residential premises that:
(i) have not been created through *substantial renovations of a building; and
(ii) are not *commercial residential premises; or
(b) *potential residential land that:
(i) is included in a *property subdivision plan; and
(ii) does not contain any building that is in use for a commercial purpose;
other than a supply that is of a kind determined by the Commissioner under subsection (3).
(3) The Commissioner may, by legislative instrument, determine that subsection (2) does not apply to a kind of *supply specified in the determination.
When the amount must be paid
(4) You must pay the amount on or before:
(a) the day on which:
(i) any of the *consideration for the *supply (other than consideration provided as a deposit) is first provided; or
(ii) if the supplier is your *associate, and the supply is without consideration—the supply is made; or
(b) if a determination under subsection (5) applies—the day provided under that determination.
(5) The Commissioner may determine, by legislative instrument, circumstances in which amounts under this section are to be paid on or before the day provided under the determination. The determination may provide for amounts to be paid in instalments.
The amount to be paid
(6) The amount to be paid to the Commissioner is an amount equal to:
(a) if the *margin scheme applies to the *supply:
(i) the percentage, of the amount provided under subsection (7), determined by the Minister under subsection (8); or
(ii) if there is no such determination—7% of the amount provided under subsection (7); or
(b) otherwise—1/11 of the amount provided under subsection (7).
(7) For the purposes of paragraphs (6)(a) and (b), the amount is:
(a) if the contract for the *supply specifies an amount (the contract price) that is the *price for the supply, subject to normal adjustments that apply on completion of transactions of that kind—that contract price; or
(b) otherwise—the *price for the supply.
(8) The Minister may, by legislative instrument, determine a percentage exceeding 7%, but not exceeding 9%, for the purposes of subparagraph (6)(a)(i).
(9) Despite subsection (6), if:
(a) the supplier is your *associate; and
(b) the *supply is without *consideration or is for consideration that is less than the *GST inclusive market value;
the amount to be paid to the Commissioner is an amount equal to 10% of the *GST exclusive market value (within the meaning of the *GST Act) of the supply.
(10) Despite subsections (6) and (9), if:
(a) the *supply does not consist solely of one or more supplies to which subsection (2) applies; and
(b) it is practicable to ascertain, at the time any of the *consideration for the supply (other than consideration provided as a deposit) is first provided, the amount (the reduced amount) of the amount provided under subsection (6) or (9) that relates to supplies to which subsection (2) applies;
the amount provided under subsection (6) or (9) is taken (other than for the purposes of this subsection) to be the reduced amount.
Multiple recipients
(11) If there is more than one recipient (within the meaning of the *GST Act) of the *supply (the original supply):
(a) treat each recipient as being the recipient of a separate supply; and
(b) treat the amount under subsection (6), (9) or (10) (as the case requires) for such a separate supply as being the same proportion of that amount for the original supply, as the proportion of the original supply that is constituted by that separate supply.
Treat recipients who are joint tenants as a single recipient for the purposes of this subsection.
14‑255 Notification by suppliers of residential premises etc.
(1) You must not make a *supply, by way of sale or long‑term lease (within the meaning of the *GST Act), of *residential premises or of *potential residential land to another entity unless, before making the supply, you have given to the other entity a written notice stating:
(a) whether the other entity will be required to make a payment under section 14‑250 in relation to the supply; and
(b) if the other entity will be required to make such a payment in relation to the supply:
(i) the name and *ABN of the entity that is liable to pay the *GST on the supply; and
(ii) the amount that the other entity will be required to pay to the Commissioner under section 14‑250 in relation to the supply; and
(iii) when the other entity will be required to pay that amount; and
(iv) if some or all of the *consideration for the supply will not be expressed as an amount of *money—the *GST inclusive market value of so much of the consideration as will not be expressed as an amount of money; and
(v) such other matters as are specified in the regulations.
(2) However, subsection (1):
(a) does not apply to a supply of *commercial residential premises; and
(b) does not apply to a supply of *potential residential land to another entity if the other entity:
(i) is registered (within the meaning of the *GST Act); and
(ii) acquires the land for a *creditable purpose.
(3) To avoid doubt, a failure to comply with subsection (1) does not affect the other entity’s obligation to make a payment under section 14‑250.
Strict liability offence
(4) You must not fail to give a notice required under this section.
Penalty: 100 penalty units.
(5) An offence against subsection (4) is a strict liability offence.
Note: For strict liability, see section 6.1 of the Criminal Code.
Administrative penalty
(6) You are liable to pay the Commissioner a penalty of 100 penalty units if you fail to give a notice required under this section.
Note: Division 298 contains machinery provisions for administrative penalties.
(7) However, you are not liable to a penalty for failing to meet the requirements of paragraph (1)(b) in relation to a supply if, at the time you gave the notice, you reasonably believed that you were not required to meet those requirements in relation to that supply.
Division 15—Working out the amount to withhold
Table of Subdivisions
Guide to Division 15
15‑A Working out how much to withhold
15‑B Withholding schedules and regulations
15‑C Declarations
Guide to Division 15
15‑1 What this Division is about
This Division is mainly about how to work out how much an entity must withhold under Division 12.
In most cases, the entity will need to use either the Commissioner’s withholding schedules or the regulations.
The entity will also need to take into account a TFN declaration or declaration under section 15‑50 it has been given because, under the schedules and regulations, the declaration may affect how to calculate the amount to withhold.
This Division also deals with when an individual can make such a declaration (other than a TFN declaration) so as to change the amount that must be withheld from payments to the individual.
Subdivision 15‑A—Working out how much to withhold
Table of sections
15‑10 How much to withhold
15‑15 Variation of amounts required to be withheld
15‑10 How much to withhold
(1) The amount that Subdivision 12‑B, 12‑C or 12‑D requires to be withheld from a payment is to be worked out under the withholding schedules made under section 15‑25. However, if the regulations prescribe how the amount is to be worked out, then it is to be worked out under the regulations.
Note 1: A TFN declaration, declaration under section 15‑50 or voluntary agreement may affect how much is required to be withheld under the withholding schedules or regulations.
Note 2: The Commissioner may vary an amount required to be withheld. See section 15‑15.
(2) The amount that Subdivision 12‑E, 12‑F, 12‑FA, 12‑FAA, 12‑FB, 12‑FC, 12‑G (except one covered by section 12‑325) or 12‑J requires to be withheld from a payment is to be worked out under the regulations.
Note 1: The amount that section 12‑325 requires to be withheld is worked out under that section.
Note 2: The Commissioner may vary an amount required to be withheld. See section 15‑15.
(3) The amount that Subdivision 12‑H requires to be withheld from a payment or receipt is worked out under subsection 12‑385(2), 12‑390(2) or 12‑390(5).
15‑15 Variation of amounts required to be withheld
(1) The Commissioner may, for the purposes of meeting the special circumstances of a particular case or class of cases, vary the *amount required to be withheld by an entity from a *withholding payment (except a withholding payment covered by section 12‑140, 12‑145, 12‑175 or 12‑180 or Subdivision 12‑FC or 12‑H). If the Commissioner does so, the amount is varied accordingly.
Note 1: Section 12‑140 is about a payment arising from an investment where the recipient does not quote its tax file number (or, in some cases, its ABN).
Note 2: Sections 12‑175 and 12‑180 are about a payment of the income of a closely held trust to a beneficiary, where the beneficiary does not quote the beneficiary’s tax file number.
Note 3: Section 12‑145 is about an investor becoming presently entitled to income of a unit trust.
Note 3A: Subdivision 12‑FC is about certain labour mobility programs.
Note 4: Subdivision 12‑H is about distributions of withholding MIT income.
(2) The Commissioner’s power to vary an amount includes the power to reduce the amount to nil.
(3) A variation must be made:
(a) if it applies to a particular entity—by a written notice given to that entity; or
(b) if it applies to a class of entities—by legislative instrument.
Subdivision 15‑B—Withholding schedules and regulations
Table of sections
15‑25 Commissioner’s power to make withholding schedules
15‑30 Matters to be considered when making withholding schedules
15‑35 Regulations about withholding
15‑25 Commissioner’s power to make withholding schedules
(1) For the purposes of collecting income tax and the other liabilities referred to in paragraphs 11‑1(b), (ca), (caa), (cb), (cc), (cd), (da) and (db), the Commissioner may, by legislative instrument, make one or more withholding schedules specifying the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity:
(a) from a *withholding payment covered by Subdivision 12‑B, 12‑C or 12‑D; or
(b) an *alienated personal services payment to which Division 13 applies.
(2) A withholding schedule may deal differently with:
(a) different payments; and
(b) different circumstances of the recipients of those payments; and
(c) different periods in respect of which those payments are made.
This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.
15‑30 Matters to be considered when making withholding schedules
The Commissioner must have regard to the following matters when making a withholding schedule:
(a) the rates of income tax as specified in the Income Tax Rates Act 1986;
(b) the rates of *Medicare levy as specified in the Medicare Levy Act 1986;
(c) the methods for working out, for any financial year starting on or after 1 July 2025, the following:
(i) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 46(1) (about repayments of accumulated AASL debt) of the Australian Apprenticeship Support Loans Act 2014;
(ii) the amounts referred to in paragraphs 154‑20(1)(a) and (b) (about repayments of accumulated HELP debt) of the Higher Education Support Act 2003;
(iii) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 1061ZVHA(1) (about repayments of accumulated SSL debt) of the Social Security Act 1991;
(iv) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 1061ZZFD(1) (about repayments of accumulated FS debts) of the Social Security Act 1991;
(v) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 10F(1) (about repayments of accumulated ABSTUDY SSL debt) of the Student Assistance Act 1973;
(vi) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 12ZLC(1) (about repayments of accumulated FS debts) of the Student Assistance Act 1973;
(vii) the amounts referred to in paragraphs (a) and (b) of the definition of applicable repayable amount for the purposes of subsection 23EA(1) (about repayments of accumulated VETSL debts) of the VET Student Loans Act 2016;
(d) any *tax offsets;
(e) the family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999);
(f) the periods in respect of which *withholding payments are made;
(fa) in relation to withholding payments that are *working holiday taxable income—whether an entity is registered under section 16‑147;
(g) any other prescribed matter.
15‑35 Regulations about withholding
(1) For the purposes of collecting income tax and the other liabilities referred to in section 11‑1, the regulations may specify the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity from a *withholding payment covered by Division 12 (except one covered by section 12‑325).
(2) The regulations may deal differently with:
(a) different payments; and
(b) different circumstances of the recipients of those payments; and
(c) different periods in respect of which those payments are made.
This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.
Subdivision 15‑C—Declarations
Table of sections
15‑50 Declarations
15‑50 Declarations
Declarations about matters
(1) An individual who:
(a) expects to receive a *withholding payment covered by Subdivision 12‑B, 12‑C or 12‑D, or an *alienated personal services payment to which Division 13 applies, from an entity; and
(b) wishes to have a matter relating to the individual’s income tax or other liability referred to in paragraph 11‑1(b), (ca), (caa), (cb), (cc), (cd), (da) or (db) taken into account by the entity in working out the *amount required to be withheld from the payment;
may give the entity a declaration about the matter in the *approved form.
When declarations under subsection (1) can’t be given
(2) The individual cannot give a declaration under subsection (1) unless:
(a) a *TFN declaration is in effect between the individual and the entity, or a *voluntary agreement covers the payment; and
(b) if the individual has given another entity a declaration on any matter—that declaration is not in effect.
Declarations changing information given in TFN declaration
(3) If:
(a) an individual has given a *TFN declaration to an entity; and
(b) the individual made a statement about a matter in the TFN declaration; and
(c) the individual’s circumstances change in relation to the matter;
the individual may give the entity a declaration about the matter in the *approved form.
Regulations
(4) The regulations may prescribe:
(b) when a declaration under subsection (1) or (3) starts or ceases to be in effect; and
(c) when a declaration under subsection (1) or (3) is taken to have been given.
(5) If:
(a) an individual gives an entity a declaration under subsection (1) or (3) about a matter; and
(b) the individual’s circumstances change in relation to the matter;
the regulations may also prescribe when the individual must give the entity a new declaration about the matter.
Division 16—Payer’s obligations and rights
Table of Subdivisions
Guide to Division 16
16‑A To withhold
16‑B To pay withheld amounts to the Commissioner
16‑BA To be registered
16‑C To provide information
16‑D Additional rights and obligations of entity that makes a payment
Guide to Division 16
16‑1 What this Division is about
This Division sets out the obligations and rights of an entity required to withhold an amount under Division 12, or to pay an amount to the Commissioner under Division 12A, 13 or 14.
Note: The entity may also have obligations under other legislation. See, for example, the obligation to keep records under section 262A of the Income Tax Assessment Act 1936.
Subdivision 16‑A—To withhold
Table of sections
When to withhold
16‑5 When to withhold an amount
16‑7 Treat entity obliged to pay under Subdivision 12A‑C as having withheld amount under Division 12
16‑20 Payer discharged from liability to recipient for amount withheld
Penalties for not withholding
16‑25 Failure to withhold: offence
16‑30 Failure to withhold: administrative penalty for entity other than exempt Australian government agency
16‑35 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty
16‑40 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment
16‑43 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.
When to withhold
16‑5 When to withhold an amount
If Division 12 requires an entity to withhold an amount from a payment, the entity must do so when making the payment.
Note 1: An entity is required to withhold an amount under section 12‑145 when an investor becomes presently entitled to income of a unit trust.
Note 1A: A trustee of a closely held trust is required to withhold an amount under section 12‑180 when a beneficiary is presently entitled to unpaid income of the trust.
Note 2: If section 12‑215, 12‑250 or 12‑285, or subsection 12‑390(4), requires an entity to withhold an amount from a payment received by the entity, the entity must do so at the time required by that provision.
16‑7 Treat entity obliged to pay under Subdivision 12A‑C as having withheld amount under Division 12
For the purposes of this Division:
(a) if an entity must pay an amount to the Commissioner under Subdivision 12A‑C, treat the entity as being obliged to withhold the amount under Division 12; and
(b) if an entity has paid an amount to the Commissioner under Subdivision 12A‑C, treat the entity as having withheld the amount under Division 12.
16‑20 Payer discharged from liability to recipient for amount withheld
(1) An entity that:
(a) withholds an amount as required by Division 12; or
(b) pays to the Commissioner an amount as required by Division 12A, 13 or 14;
is discharged from all liability to pay or account for that amount to any entity except the Commissioner.
Note: The entity may be required to refund the amount in some circumstances. See Subdivision 18‑B.
(2) An entity is discharged from all liability to pay so much of the total amount payable to *acquire a *CGT asset as is equal to any amount the entity pays to the Commissioner under Subdivision 14‑D in relation to the acquisition.
Penalties for not withholding
16‑25 Failure to withhold: offence
(1) An entity must not fail to withhold an amount as required by Division 12.
Penalty: 10 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: See sections 16‑30, 16‑35, 16‑40 and 16‑43 for an alternative administrative penalty.
(2) An entity must not fail to pay to the Commissioner an amount as required by Division 12A or 13 or Subdivision 14‑A, 14‑B, 14‑C or 14‑D.
Penalty: 10 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: See sections 16‑30, 16‑35, 16‑40 and 16‑43 for an alternative administrative penalty.
(3) An offence against subsection (1) or (2) is a strict liability offence.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) If a person is convicted of an offence in relation to:
(a) a failure by that person or someone else to withhold an amount as required by Division 12; or
(b) a failure by that person or someone else to pay to the Commissioner an amount as required by Division 12A or 13 or Subdivision 14‑A, 14‑B, 14‑C or 14‑D;
the court may order the convicted person to pay to the Commissioner an amount up to the *amount required to be withheld. The court may so order in addition to imposing a penalty on the convicted person.
16‑30 Failure to withhold: administrative penalty for entity other than exempt Australian government agency
(1) An entity (except an *exempt Australian government agency) that:
(a) fails to withhold an amount as required by Division 12; or
(b) fails to pay an amount to the Commissioner as required by Division 12A, 13 or 14;
is liable to pay to the Commissioner a penalty equal to that amount.
Note 1: An entity may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner’s determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).
Note 2: Division 298 in this Schedule contains machinery provisions for administrative penalties.
(2) Subsection (1) does not apply in relation to a failure to pay an amount to the Commissioner as required by Subdivision 14‑E if:
(a) the amount relates to a *taxable supply of *new residential premises (other than *commercial residential premises); and
(b) the entity was given a notice under section 14‑255:
(i) stating that the premises are not new residential premises; or
(ii) indicating that the entity will not be required to pay an amount to the Commissioner under section 14‑250 in relation to the supply; and
(c) at the time *consideration for the supply (other than consideration provided as a deposit) is first provided, there was nothing in:
(i) the contract for the supply; or
(ii) any other circumstances relating to the supply;
that made it unreasonable for the entity to believe that the statement or indication was correct.
(3) Subsection (1) does not apply in relation to a failure to pay an amount to the Commissioner in relation to a *taxable supply as required by Subdivision 14‑E if:
(a) the entity required to pay the amount in relation to the supply gives the supplier a bank cheque on or before the day *consideration for the supply (other than consideration provided as a deposit) is first provided; and
(b) the bank cheque is for the amount the entity is required to pay to the Commissioner, and is payable to the Commissioner.
16‑35 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment other than dividend, interest or royalty
(1) An *exempt Australian government agency that:
(a) fails to withhold an amount as required by Division 12; or
(b) fails to pay to the Commissioner an amount as required by Division 14;
is liable to pay to the Commissioner a penalty of 20 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: Division 298 in this Schedule contains machinery provisions for administrative and civil penalties.
Exception
(4) This section does not apply in relation to an *amount required to be withheld from a *withholding payment covered by Subdivision 12‑F (about dividend, interest or royalty payment) or by Subdivision 12‑FB (about payments to foreign residents).
16‑40 Failure to withhold: administrative penalty for exempt Australian government agency in relation to dividend, interest or royalty payment
An *exempt Australian government agency that:
(a) fails to withhold an amount as required by Division 12 from a *withholding payment covered by Subdivision 12‑F (about dividend, interest or royalty payment); or
(b) fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;
is liable to pay to the Commissioner a penalty equal to that amount.
Note 1: An exempt Australian government agency may become liable under this section in respect of a payment it made or received that is taken to have been subject to withholding tax as a result of a Commissioner’s determination under subsection 177F(2A) of the Income Tax Assessment Act 1936 (see also subsection 177F(2F) of that Act).
Note 2: Division 298 in this Schedule contains machinery provisions for administrative penalties.
16‑43 Failure to withhold: administrative penalty for exempt Australian government agency in relation to payment to foreign resident etc.
An *exempt Australian government agency that:
(a) fails to withhold an amount as required by Division 12 from a *withholding payment covered by Subdivision 12‑FB (about payments to foreign residents); or
(b) fails to pay to the Commissioner an amount as required by Division 14 in respect of a withholding payment covered by that Subdivision;
is liable to pay to the Commissioner a penalty equal to that amount.
Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.
Subdivision 16‑B—To pay withheld amounts to the Commissioner
Table of sections
When and how to pay amounts to the Commissioner
16‑70 Entity to pay amounts to Commissioner
16‑75 When amounts must be paid to Commissioner
16‑80 Penalty for failure to pay within time
16‑85 How amounts are to be paid
Who is a large, medium or small withholder
16‑95 Meaning of large withholder
16‑100 Meaning of medium withholder
16‑105 Meaning of small withholder
16‑110 Commissioner may vary withholder’s status downwards
16‑115 Commissioner may vary withholder’s status upwards
When and how to pay amounts to the Commissioner
16‑70 Entity to pay amounts to Commissioner
(1) An entity that withholds an amount under Division 12 must pay the amount to the Commissioner in accordance with this Subdivision.
(2) An entity that must pay an amount to the Commissioner under Division 13 or Subdivision 14‑A must do so in accordance with section 16‑85.
(3) An entity that must pay an amount to the Commissioner under Subdivision 14‑B, 14‑C, 14‑D or 14‑E must do so in accordance with sections 16‑80 and 16‑85.
Note: For provisions about the collection and recovery of amounts payable to the Commissioner under this Part, see Part 4‑15.
16‑75 When amounts must be paid to Commissioner
Large withholder
(1) A *large withholder must pay to the Commissioner as shown in the table an amount it withholds under Division 12 (other than section 12‑175 or 12‑180) during a month.
<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.6pt; border-top:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Payments by large withholders</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">If the amount is withheld on this day of week:</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">It must be paid to the Commissioner on or before:</span></p></td></tr></thead><tbody><tr><td style="width:24.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:144.25pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Saturday or Sunday</span></p></td><td style="width:153.1pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The second Monday after that day</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Monday or Tuesday</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The first Monday after that day</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Wednesday</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The second Thursday after that day</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:144.25pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Thursday or Friday</span></p></td><td style="width:153.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The first Thursday after that day</span></p></td></tr></tbody></table>
Medium withholders
(2) Subject to subsection (2A), a *medium withholder must pay to the Commissioner an amount that it withholds during a month under Division 12 (other than section 12‑175 or 12‑180) by the end of the 21st day of the next month.
(2A) If a *medium withholder:
(a) withholds an amount during a month under Division 12 (other than section 12‑175 or 12‑180); and
(b) is a *deferred BAS payer on the 21st day of the month (the next month) following that month;
the medium withholder must pay that amount to the Commissioner by the end of the 28th day of:
(c) the next month unless the amount is withheld during December; or
(d) the next February if the amount is withheld during December.
Small withholders
(3) Subject to subsection (4), if a *small withholder withholds an amount under Division 12 (other than section 12‑175 or 12‑180) during a month in a *quarter, it must pay the amount to the Commissioner by the end of the 21st day of the month after the end of that quarter.
(4) If a *small withholder:
(a) withholds an amount under Division 12 (other than section 12‑175 or 12‑180) during a month in a *quarter; and
(b) is a *deferred BAS payer on the 21st day of the month after the end of that quarter;
the small withholder must pay that amount to the Commissioner as shown in the table:
Payment of income of closely held trust
(5) A trustee must pay to the Commissioner an amount the trustee withholds under section 12‑175 or 12‑180 from a payment made during an income year. The trustee must do so:
(a) by the end of the 28th day of the next month following the day by which the trustee was required to give to the Commissioner a report under subsection 16‑152(1) for the income year; or
(b) within a longer period allowed by the Commissioner.
16‑80 Penalty for failure to pay within time
If an amount that an entity must pay to the Commissioner under subsection 16‑70(1) or (3) remains unpaid after the time by which it is due to be paid, the entity is liable to pay *general interest charge on the unpaid amount for each day in the period that:
(a) started at the beginning of the day by which the unpaid amount was due to be paid; and
(b) finishes at the end of the last day, at the end of which, any of the following remains unpaid:
(i) the unpaid amount;
(ii) general interest charge on any of the unpaid amount.
16‑85 How amounts are to be paid
Large withholder
(1) A *large withholder must pay to the Commissioner by a means of *electronic payment:
(a) an amount that it withholds under Division 12; and
(b) an amount that it pays to the Commissioner under Division 13 or 14.
Note 1: A different rule applies for some large withholders for July and August 2000. See section 16‑130.
Note 2: A penalty applies if a large withholder fails to pay electronically as required—see section 288‑20.
Note 3: A large withholder must also pay other tax debts electronically—see section 8AAZMA.
Medium or small withholder
(2) A *medium withholder or *small withholder must pay to the Commissioner:
(a) any amount that it withholds under Division 12; and
(b) any amount that it pays to the Commissioner under Division 13 or 14;
by a means of *electronic payment, or any other means approved in writing by the Commissioner.
Commissioner may vary payment method
(3) The Commissioner may, with an entity’s agreement, vary the means by which the withholder pays amounts to the Commissioner under this Subdivision. The variation must be by written notice given to the entity.
Who is a large, medium or small withholder
16‑95 Meaning of large withholder
(1) An entity is a large withholder for a particular month (the current month) in a *financial year starting on or after 1 July 2001 if:
(a) it was a *large withholder for June 2001; or
(b) the *amounts withheld by the entity during a financial year ending at least 2 months before the current month exceeded $1 million; or
(c) both of the following apply:
(i) at the end of a financial year (the threshold year) ending at least 2 months before the current month, the entity was one of a number of companies that were at that time all members of the same *wholly‑owned group;
(ii) the amounts withheld by those companies during the threshold year exceeded $1 million; or
(d) the Commissioner determines under section 16‑115 that the entity is a large withholder for the current month.
Note: Different rules apply for working out who is a large withholder for a month in 2000‑01. See section 16‑125.
Exception
(2) However, the entity is not a *large withholder if the Commissioner determines under section 16‑110 that it is a *medium withholder or a *small withholder for the current month.
16‑100 Meaning of medium withholder
(1) An entity is a medium withholder for a particular month (the current month) in a *financial year starting on or after 1 July 2001 if it is not a *large withholder for that month and:
(a) it was a *medium withholder for June 2001; or
(b) the *amounts withheld by the entity during a financial year ending before the current month exceeded $25,000; or
(c) the Commissioner determines under section 16‑110 or 16‑115 that the entity is a medium withholder for the current month.
Note: Different rules apply for working out who is a large withholder for a month in 2000‑01. See section 16‑125.
(2) However, the entity is not a *medium withholder if the Commissioner determines under section 16‑110 or 16‑115 that the entity is a *large withholder or a *small withholder for the current month.
16‑105 Meaning of small withholder
An entity is a small withholder for a particular month if:
(a) there is at least one *amount withheld by the entity during that month; and
(b) the entity is neither a *large withholder nor a *medium withholder for that month.
16‑110 Commissioner may vary withholder’s status downwards
(1) The Commissioner may, by giving written notice to a *withholder:
(a) make the following determinations:
(i) a determination that a *large withholder is a *medium withholder or a *small withholder;
(ii) a determination that a medium withholder is a small withholder; or
(b) revoke or vary any such determination.
(2) The notice must state that the determination applies:
(a) for specified months; or
(b) for all months from and including a specified month.
(3) The determination has no effect for a particular month unless the notice is given before that month.
(4) An entity that would otherwise be a *large withholder or a *medium withholder for a particular month may apply in writing to the Commissioner for a determination under this section.
Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.
16‑115 Commissioner may vary withholder’s status upwards
(1) The Commissioner may, by giving written notice to a *withholder:
(a) make the following determinations:
(i) a determination that a *small withholder is a *medium withholder or a *large withholder;
(ii) a determination that a medium withholder is a large withholder; or
(b) revoke or vary any such determination.
(2) The notice must state that the determination applies:
(a) for specified months; or
(b) for all months from and including a specified month.
(3) A determination that a *small withholder is a *medium withholder has no effect for a particular month unless the notice is given before that month.
(4) Any other determination under this section has no effect for a month that is earlier than the second month after the month in which the notice is given.
(5) The Commissioner may, in making a determination under this section, have regard to the following:
(a) the sum of the amounts that the Commissioner considers to be likely to be the *amounts required to be withheld by the entity in the following 12 months;
(b) the extent (if any) to which the entity makes or receives *withholding payments that were previously made or received by another entity;
(c) any failure by the entity to comply with its obligations under this Part;
(d) any *arrangement that was entered into or carried out for the purpose of lengthening the intervals at which the entity is required to pay to the Commissioner amounts withheld from withholding payments;
(e) such other matters as the Commissioner considers relevant.
Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.
Subdivision 16‑BA—To be registered
Table of sections
Registration of withholders
16‑140 Withholders must be registered
16‑141 Registration and cancellation
Branch registration
16‑142 Branches may be registered
16‑143 Separate amounts for entities and branches
16‑144 Cancellation of branch registration
16‑145 Effect on branches of cancelling the entity’s registration
Registration of employers of working holiday makers
16‑146 Employers of working holiday makers must be registered
16‑147 Registering employers of working holiday makers
16‑148 Cancelling the registration of employers of working holiday makers
Registration of withholders
16‑140 Withholders must be registered
(1) An entity that must pay an amount to the Commissioner under:
(a) subsection 16‑70(1) (about amounts withheld under Division 12); or
(aaa) Division 12A (about deemed payments by AMITs); or
(aa) Division 13 (about payments in respect of alienated personal services payments); or
(b) Subdivision 14‑A, 14‑B, 14‑C or 14‑D (about payments in respect of non‑cash benefits or capital proceeds);
must apply to register with the Commissioner.
(2) The entity must apply in the *approved form by the day on which the entity is first required:
(a) to withhold an amount under Division 12; or
(b) to pay an amount to the Commissioner under Division 12A or 13 or Subdivision 14‑A, 14‑B, 14‑C or 14‑D.
However, the Commissioner may allow a longer period for applying.
(3) An entity that contravenes this section is liable to an administrative penalty of 5 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: Division 298 contains machinery provisions for administrative and civil penalties.
16‑141 Registration and cancellation
The Commissioner may register an entity or cancel the registration of an entity at any time.
Branch registration
16‑142 Branches may be registered
(1) The Commissioner may register a branch of a registered entity if:
(a) the entity applies, in the *approved form, for registration of the branch; and
(b) the entity has an *ABN or has applied for one; and
(c) the Commissioner is satisfied that the branch maintains an independent system of accounting, and can be separately identified by reference to:
(i) the nature of the activities carried on through the branch; or
(ii) the location of the branch; and
(d) the Commissioner is satisfied that the entity is *carrying on an enterprise through the branch, or intends to carry on an enterprise through the branch, from a particular date specified in the application.
A branch that is so registered is a PAYG withholding branch.
Note: A branch may be both a PAYG withholding branch under this Subdivision and a GST branch under the GST Act.
(2) The Commissioner may register a branch of a *government entity or a *non‑profit sub‑entity if:
(a) the branch or sub‑entity applies, in the *approved form, for registration; and
(b) the branch or sub‑entity has an *ABN or has applied for one.
A branch or sub‑entity that is so registered is also a PAYG withholding branch.
16‑143 Separate amounts for entities and branches
(1) If an entity has a *PAYG withholding branch, this Part applies to the entity as if the amounts that it must pay to the Commissioner under this Part were separated into the following classes:
(a) for each such branch of the entity, a class of amounts that relate to the branch; and
(b) a class of amounts that do not relate to any of the entity’s branches.
Note: This section does not impose any legal obligations on the branches. The entity remains legally responsible under this Part for all amounts that relate to its branches.
(2) Those amounts are worked out as if the branch were a separate entity and as if:
(a) all payments made through the branch, from which amounts are required to be withheld under Division 12, were made by that separate entity; and
(aa) all *alienated personal services payments received through the branch, in respect of which Division 13 requires an amount to be paid to the Commissioner, were received by that separate entity; and
(b) all *non‑cash benefits or *capital proceeds provided through the branch, in respect of which Division 14 requires an amount to be paid to the Commissioner, were provided by that separate entity.
16‑144 Cancellation of branch registration
The Commissioner must cancel the registration of a *PAYG withholding branch of an entity if the Commissioner is satisfied that the branch does not satisfy paragraph 16‑142(c) or (d).
16‑145 Effect on branches of cancelling the entity’s registration
If an entity’s registration is cancelled, the registration of any *PAYG withholding branches of the entity ceases to have effect.
Registration of employers of working holiday makers
16‑146 Employers of working holiday makers must be registered
(1) An entity must apply to the Commissioner to register under section 16‑147 if:
(a) the entity must pay an amount to the Commissioner under subsection 16‑70(1) from salary, wages, commission, bonuses or allowances it pays to an individual as the individual’s *working holiday taxable income; and
(b) in a case where a period has been determined under subsection 16‑148(5) during which the entity cannot apply under this section—the period has ended.
(2) The entity must apply in the *approved form by the day on which the entity is first required to withhold an amount under Division 12 from salary, wages, commission, bonuses or allowances it pays to an individual as the individual’s *working holiday taxable income.
(3) However, the Commissioner may allow a longer period for applying.
(4) An entity that contravenes this section is liable to an administrative penalty of 20 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: Division 298 contains machinery provisions for administrative and civil penalties.
(5) This section does not affect an obligation that an entity has under section 16‑140.
16‑147 Registering employers of working holiday makers
(1) The Commissioner must register an entity under this section if, and only if, the entity:
(a) has applied under section 16‑146 for registration; and
(b) has made a declaration to the Commissioner, in the *approved form, that states that the entity:
(i) has a genuine business requirement to employ one or more *working holiday makers; and
(ii) agrees to comply with the Fair Work Act 2009 in relation to its employment of any individual who is a working holiday maker; and
(iii) agrees to check that any individual it employs as a working holiday maker holds a visa that causes that person to be a working holiday maker; and
(c) has given to the Commissioner, in the approved form, information relating to its employment, or proposed employment, of working holiday makers.
(2) Subparagraph (1)(b)(i) does not apply if the entity is not carrying on a *business.
(3) The registration takes effect on the day determined by the Commissioner.
Notification of the Commissioner’s decision
(4) The Commissioner must notify the entity of:
(a) the Commissioner’s decision on the application; and
(b) if the Commissioner decides to register the entity—the day on which the registration takes effect;
within 30 days after the making of the application.
Note: The decision on the application is reviewable (see section 20‑80).
(5) If the Commissioner decides to register the entity, the *Australian Business Registrar must enter in the *Australian Business Register a statement that the entity is registered under this section. The statement must specify the day on which the registration takes effect.
(7) A failure to comply with subsection (4) or (5) does not affect the validity of the Commissioner’s decision.
Basis of registration
(8) A registration under this section is granted on the basis that:
(a) the registration may be cancelled under section 16‑148; and
(b) the registration may be cancelled, suspended, varied or made subject to conditions by or under later legislation; and
(c) no compensation is payable if the registration is cancelled, suspended, varied or made subject to conditions as mentioned in any of the above paragraphs.
16‑148 Cancelling the registration of employers of working holiday makers
(1) The Commissioner may cancel an entity’s registration under section 16‑147 if:
(a) the entity advises the Commissioner, in the *approved form, that the entity does not employ, and does not intend to employ, any individual who is a *working holiday maker; or
(b) the Commissioner is satisfied that:
(i) the entity; or
(ii) if the entity is a partnership—any of the partners; or
(iii) if the entity is a company—any director, shareholder or employee of the company who participates in the management or control of the company; or
(iv) if the entity is a trustee of a trust—any appointer of trustees of the trust, or any person who participates in the control of the trust;
is not a fit and proper person.
(2) The cancellation takes effect on the day determined by the Commissioner. The day must not be earlier than the day on which notice of the cancellation is given under subsection (6).
(3) If the Commissioner is considering whether the entity, or another person mentioned in subparagraph (1)(b)(ii), (iii) or (iv), is a fit and proper person, the Commissioner must give the entity a notice that:
(a) informs the entity accordingly; and
(b) invites the entity to make submissions to the Commissioner on the matter within 28 days after the Commissioner gives the notice.
(4) Without limiting the matters to which the Commissioner may have regard in considering whether the entity, or another person mentioned in subparagraph (1)(b)(ii), (iii) or (iv), is a fit and proper person, the Commissioner must have regard to:
(a) whether a court has made a finding, in proceedings commenced by the Fair Work Ombudsman, that the entity has contravened the Fair Work Act 2009; and
(b) whether the entity has failed to withhold amounts as required by Division 12; and
(c) any relevant information the entity has provided in submissions to the Commissioner within the period specified in paragraph (3)(b).
(5) The Commissioner must, having regard to the reasons for the cancellation, determine a period, starting when the cancellation takes effect, during which the entity cannot apply under section 16‑146 for registration.
Notification of the cancellation
(6) The Commissioner must notify the entity of:
(a) the cancellation; and
(b) the day on which the cancellation takes effect; and
(c) the period determined under subsection (5) for the cancellation.
Note: A decision to cancel, including a determination under subsection (5), is reviewable (see section 20‑80).
(7) The *Australian Business Registrar must enter in the *Australian Business Register a statement that the entity’s registration under section 16‑147 has been cancelled. The statement must specify the day on which the cancellation takes effect.
(8) A failure to comply with subsection (6) or (7) does not affect the validity of the Commissioner’s decision.
Subdivision 16‑C—To provide information
Table of sections
To the Commissioner
16‑150 Commissioner must be notified of amounts
16‑152 Annual reports—Withholding payments covered by section 12‑175
16‑153 Annual reports—other payments
To recipients of withholding payments
16‑155 Annual payment summary
16‑156 Annual payment summary for sections 12‑175 and 12‑180
16‑157 Payment summary for Subdivision 12‑H
16‑160 Part‑year payment summary
16‑165 Payment summaries for superannuation lump sums and payments for termination of employment
16‑166 Payment summary for a departing Australia superannuation payment
16‑167 Payment summary for payment to recipient who does not quote ABN
16‑170 Form and content of payment summary
16‑175 Penalty for not providing payment summary
16‑180 Commissioner may exempt entity from giving payment summary
16‑182 Definition of reportable employer superannuation contribution
To the Commissioner
16‑150 Commissioner must be notified of amounts
(1) An entity that must pay an amount (even if it is a nil amount) to the Commissioner, other than an amount to which subsection (4) applies, under:
(a) subsection 16‑70(1) (about amounts withheld under Division 12); or
(aa) Division 13 (about payments in respect of alienated personal services payments); or
(b) Subdivision 14‑A, 14‑B, 14‑C or 14‑D (about payments in respect of non‑cash benefits or capital proceeds);
must notify the Commissioner of the amount on or before the day on which the amount is due to be paid (regardless of whether it is paid). The notification must be in the *approved form and lodged with the Commissioner.
Note: This section does not apply to amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
(2) An entity that must pay an amount (even if it is a nil amount) to the Commissioner under Subdivision 14‑E (about payments in respect of taxable supplies of certain real property) must notify the Commissioner of the amount:
(a) on or before the day provided in a determination under subsection (3); or
(b) if there is no such determination—on or before the day on which the amount is due to be paid (regardless of whether it is paid).
The notification must be in the *approved form and lodged with the Commissioner.
(3) The Commissioner may, by legislative instrument, determine when the Commissioner must be notified for the purposes of paragraph (2)(a).
(4) If:
(a) an entity must pay an amount (even if it is a nil amount) to the Commissioner under subsection 16‑70(1) (about amounts withheld under Division 12); and
(b) subsection 12‑450(5) (about income from a build to rent development) applies to the amount;
the entity must notify the Commissioner of the amount:
(c) on or before the day provided in a determination under subsection (5) of this section; or
(d) if there is no such determination—on or before the day on which the amount is due to be paid (regardless of whether it is paid).
The notification must be in the *approved form and lodged with the Commissioner.
(5) The Commissioner may, by legislative instrument, determine when the Commissioner must be notified for the purposes of paragraph (4)(c).
16‑152 Annual reports—Withholding payments covered by section 12‑175
Reports about withholding payments
(1) A trustee must give a report to the Commissioner in the *approved form if the trustee made any *withholding payments covered by section 12‑175 or 12‑180 (about payments from the income of certain closely held trusts) during an income year.
(2) The trustee must give the report under subsection (1) to the Commissioner:
(a) not later than 3 months after the end of the income year; or
(b) within such further period (if any) as the Commissioner allows.
Reports about trust distributions
(3) A trustee must give a report to the Commissioner in the *approved form if the trustee would be taken to have made any *withholding payments covered by section 12‑175 or 12‑180 during an income year if the relevant beneficiary had not *quoted the beneficiary’s *tax file number as mentioned in paragraph 12‑175(2)(a) or 12‑180(2)(a).
Note: The effect of subsection (3) is that the trustee must report amounts distributed to beneficiaries even if the trustee was not required to withhold from those distributions.
(4) The trustee must give the report under subsection (3) to the Commissioner:
(a) by the end of the day on which the trustee lodges the trust’s *income tax return for the income year; or
(b) within such further period (if any) as the Commissioner allows.
Miscellaneous
(5) Subsections 16‑153(5), (6) and (7) apply to this section in the same way as they apply to section 16‑153.
16‑153 Annual reports—other payments
(1) An entity must give a report to the Commissioner in the *approved form, not later than 31 October after the end of a *financial year, if during the financial year:
(a) the entity made any payment from which an amount was required to be withheld under section 12‑190, Subdivision 12‑F (other than section 12‑215, 12‑250 or 12‑285), Subdivision 12‑FA, section 12‑315 or Subdivision 12‑FC or 12‑G; or
(b) the entity provided any *non‑cash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to section 12‑190, Subdivision 12‑F (other than section 12‑215, 12‑250 or 12‑285), Subdivision 12‑FA, section 12‑315 or Subdivision 12‑G; or
(c) the entity received any payment from which an amount was required to be withheld under section 12‑215, 12‑250, 12‑285 or 12‑317; or
(d) the entity received any non‑cash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to section 12‑215, 12‑250, 12‑285 or 12‑317.
Note: A report under this subsection will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
(2) An entity must give a report to the Commissioner in the form required by subsection (3), not later than 14 August after the end of a *financial year, if during the financial year:
(a) the entity made any payment from which an amount was required to be withheld under Subdivision 12‑B, 12‑C or 12‑D; or
(aa) the entity received any *alienated personal services payment in respect of which an amount was required to be paid to the Commissioner under Division 13; or
(b) the entity provided any *non‑cash benefit in respect of which an amount was required to be paid to the Commissioner under Division 14 because of the application of that Division in relation to Subdivision 12‑B, 12‑C or 12‑D; or
(c) any person has a *reportable fringe benefits amount for the income year ending at the end of the financial year in respect of the person’s employment by the entity; or
(d) the entity made *reportable employer superannuation contributions in respect of a person’s employment.
Note: A report under this subsection will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
(3) The report under subsection (2) must be either:
(a) a report in the *approved form; or
(b) a report consisting of:
(i) copies of all the summaries that the entity gave in relation to the *financial year under section 16‑155 in respect of payments, *non‑cash benefits, *alienated personal services payments, *reportable fringe‑benefit amounts and *reportable employer superannuation contributions covered by subsection (2) of this section; and
(ii) an accompanying statement in the approved form.
(4) An entity must give a report to the Commissioner in the *approved form if the entity is required to withhold amounts under Subdivision 12‑H in relation to *fund payments made by a particular *withholding MIT (the paying trust) in relation to an income year of that trust.
Note: The entity may be the withholding MIT itself or a custodian or other entity.
(4A) The report under subsection (4) must be given:
(a) not later than 14 days after the end of 6 months after the end of the income year of the *withholding MIT in relation to which the relevant *fund payments were made; or
(b) within a longer period allowed by the Commissioner.
(5) In applying this section:
(a) a requirement to pay a nil amount to the Commissioner is to be treated as a requirement to pay an amount to the Commissioner; and
(b) a requirement to withhold a nil amount is to be treated as a requirement to withhold an amount.
(6) The Commissioner may, to meet the special circumstances of a particular case or class of cases, vary the requirements of this section.
(7) A variation must be made:
(a) if it applies to a particular entity—by a written notice given to that entity; or
(b) if it applies to a class of entities—by legislative instrument.
To recipients of withholding payments
16‑155 Annual payment summary
(1) Within 14 days after the end of a *financial year, an entity (the payer) must give a *payment summary (and a copy of it) to another entity (the recipient) if:
(a) during the year the payer made one or more *withholding payments (other than withholding payments covered by section 12‑85, 12‑175, 12‑180, 12‑190, 12‑215, 12‑250, 12‑285, 12‑317, 12‑385 or 12‑390) to the recipient; or
(b) during the year the payer received one or more withholding payments covered by section 12‑215, 12‑250 or 12‑285 and, in relation to each of them, the recipient is the foreign resident mentioned in the section; or
(baa) during the year the payer received one or more withholding payments covered by section 12‑317 and, in relation to each of them, the recipient is the likely foreign recipient mentioned in the section; or
(ba) during the year the payer received one or more withholding payments covered by Division 13 and, in relation to each of them, an amount is included in the recipient’s assessable income under Division 86 of the Income Tax Assessment Act 1997; or
(bb) because of section 86‑40 of the Income Tax Assessment Act 1997, the payer is taken to have paid salary to the recipient on the last day of the year; or
(c) the recipient is an individual and has a *reportable fringe benefits amount, for the income year ending at the end of that financial year, in respect of his or her employment (within the meaning of the Fringe Benefits Tax Assessment Act 1986) by the payer; or
(d) the recipient is an individual and *reportable employer superannuation contributions have been made by the payer, in respect of the individual’s employment, during the year.
(2) The *payment summary must cover:
(a) if paragraph (1)(a), (b) or (ba) applies—each of the *withholding payments mentioned in that paragraph, except one covered by a previous payment summary (and a copy of it) given by the payer to the recipient under section 16‑160; and
(aa) if paragraph (1)(bb) applies—each of the withholding payments constituted by the salary mentioned in that paragraph, except one covered by a previous payment summary (and a copy of it) given by the payer to the recipient under section 16‑160; and
(b) if paragraph (1)(c) applies—the *reportable fringe benefits amount, except so much of it as is covered by a previous payment summary (and a copy of it) given by the payer to the recipient under this section; and
(c) if paragraph (1)(d) applies—the total of the *reportable employer superannuation contributions, except so much of those contributions as are covered by a previous payment summary given by the payer to the recipient under section 16‑160.
Note: A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
Parental leave pay paid in error
(3) Despite subsection (2), the *payment summary must not cover a *withholding payment if:
(a) the withholding payment is a payment of an amount purported to have been paid by way of *parental leave pay; and
(b) the amount was not lawfully so payable.
(4) The payer must, within 28 days of becoming aware that the *payment summary covers a *withholding payment to which subsection (3) applies:
(a) give the recipient an amended payment summary that does not cover the withholding payment; or
(b) give the recipient notice in the *approved form; or
(c) give the Secretary (within the meaning of the Paid Parental Leave Act 2010) notice in writing that the payer does not intend to give the recipient an amended payment summary or notice under this subsection.
16‑156 Annual payment summary for sections 12‑175 and 12‑180
(1) A trustee must give a *payment summary to a beneficiary of the trust, if the trustee made any *withholding payments covered by section 12‑175 or 12‑180 to the beneficiary during the income year.
(2) The *payment summary:
(a) must cover each of the *withholding payments mentioned in subsection (1); and
(b) may be in electronic form; and
(c) must be given:
(i) not later than 14 days after the day by which the trustee was required to give the Commissioner a report under subsection 16‑152(1) for the income year; or
(ii) within a longer period allowed by the Commissioner.
16‑157 Payment summary for Subdivision 12‑H
(1) An entity (the payer) must give a *payment summary to another entity (the recipient) if the payer made *withholding payments covered by section 12‑385 or 12‑390 to the recipient in relation to *fund payments made by a particular *withholding MIT (the paying trust) in relation to an income year of that trust.
Note: The entity may be the withholding MIT itself or a custodian or other entity.
(2) The *payment summary:
(a) must cover each of the *withholding payments mentioned in subsection (1); and
(b) may be in electronic form; and
(c) must be given:
(i) not later than 14 days after the end of 6 months after the end of the income year of the *withholding MIT in relation to which the relevant *fund payments were made; or
(ii) within a longer period allowed by the Commissioner.
16‑160 Part‑year payment summary
(1) An entity (the payer) must give a *payment summary (and a copy of it) to another entity (the recipient) if, not later than 21 days before the end of a *financial year, the recipient asks in writing for a payment summary covering:
(a) one or more *withholding payments (other than withholding payments covered by section 12‑85, 12‑190, 12‑215, 12‑250, 12‑285, 12‑317, 12‑385 or 12‑390) that the payer made to the recipient during the year; or
(b) one or more withholding payments covered by section 12‑215, 12‑250 or 12‑285, or a part of each such payment, that the payer received during the year for the recipient, if the recipient is the foreign resident mentioned in the section; or
(ba) one or more withholding payments covered by section 12‑317, or a part of each such payment, that the payer received during the year for the recipient, if the recipient is the likely foreign recipient mentioned in that section; or
(c) one or more withholding payments covered by Division 13 that the payer received during the year and that are included in the recipient’s assessable income for the income year under section 86‑15 of the Income Tax Assessment Act 1997;
other than a payment covered by a previous payment summary (and a copy of it) given under this section.
Note: A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
(2) The payer must comply with the request within 14 days after receiving it, unless:
(a) the recipient is an individual and has a *reportable fringe benefits amount, for the income year ending at the end of that *financial year, in respect of his or her employment (within the meaning of the Fringe Benefits Tax Assessment Act 1986) by the payer; or
(b) the payer has made *reportable employer superannuation contributions, in respect of the recipient’s employment, during the financial year.
(3) Despite subsection (1), the *payment summary must not cover a *withholding payment if:
(a) the withholding payment is a payment of an amount purported to have been paid by way of *parental leave pay; and
(b) at the time the recipient asks for the payment summary, the payer is aware that the amount was not lawfully so payable.
16‑165 Payment summaries for superannuation lump sums and payments for termination of employment
(1) Within 14 days after an entity (the payer) makes a payment covered under subsection (2) to a person (the recipient), the entity must:
(a) give a *payment summary to the recipient that covers the payment (and no other payments); and
(b) give a copy of the summary to the Commissioner.
(2) The following payments are covered under this subsection if they are *withholding payments:
(a) a *superannuation lump sum;
(b) a payment that is an *employment termination payment or would be one except that it is received more than 12 months after termination of employment, other than a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
Note: A payment summary under this section will not cover amounts that an employer notifies to the Commissioner under Division 389: see section 389‑20.
16‑166 Payment summary for a departing Australia superannuation payment
Within 14 days after an entity (the payer) makes a *departing Australia superannuation payment, the payer must:
(a) give a *payment summary that covers the payment to the recipient of the payment; and
(b) give a copy of the summary to the Commissioner.
16‑167 Payment summary for payment to recipient who does not quote ABN
(1) An entity (the payer) that makes a *withholding payment covered by section 12‑190 (about payments to recipients who do not quote their ABN) to another entity (the recipient) must give the recipient a *payment summary (and a copy of it) that covers that payment, unless the *amount required to be withheld from the payment is nil.
(2) The summary must cover only that payment.
(3) The payer must give the summary to the recipient when making the payment, or as soon as practicable afterwards.
16‑170 Form and content of payment summary
(1) A payment summary (except one relating to section 12‑175 or 12‑180 or Subdivision 12‑H) is a written statement that:
(a) names the payer and the recipient; and
(b) if the recipient has given the recipient’s *tax file number or *ABN to the payer—states the tax file number or ABN; and
(c) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the payer from those withholding payments; and
(d) specifies the *financial year in which the withholding payments were made; and
(e) specifies the *reportable fringe benefits amount (if any) that it covers and the income year to which that amount relates; and
(f) specifies the *reportable employer superannuation contributions (if any) that it covers and the income year to which those contributions relate; and
(g) is in the *approved form.
(1AAA) A payment summary relating to section 12‑175 or 12‑180 is a statement that:
(a) names the trustee and the beneficiary; and
(b) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the trustee from those withholding payments; and
(c) specifies the income year of the trust to which it relates; and
(d) is in the *approved form.
(1AA) A payment summary relating to Subdivision 12‑H is a statement that:
(a) names the payer and the recipient; and
(b) if the recipient has given the recipient’s *tax file number or *ABN to the payer—states the tax file number or ABN; and
(c) states the total of the *withholding payments (if any) that it covers, and the total of the *amounts withheld by the payer from those withholding payments; and
(d) specifies the income year of the relevant *withholding MIT to which it relates.
(1A) For any of the *withholding payments to which paragraph 16‑155(2)(aa) applies, paragraph (1)(d) is taken to refer to the *financial year preceding the financial year in which the withholding payments were received.
(2) The Commissioner may, in writing, require particular information to be included in a *payment summary or a class of payment summaries.
(3) A *payment summary may consist of 2 or more statements that each complies with subsection (1) and together cover what section 16‑155, 16‑156, 16‑160, 16‑165, 16‑166 or 16‑167 (as appropriate) requires the payment summary to cover.
(4) The Commissioner may vary any requirements under subsection (1), (1AAA), (2) or (3) by written notice given to an entity. The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.
16‑175 Penalty for not providing payment summary
(1) An entity must not fail to comply with any requirements under section 16‑155, 16‑156, 16‑157, 16‑160, 16‑165, 16‑166 or 16‑167, or subsection 16‑170(1), (1AAA), (1AA), (2) or (3) (including any requirements varied by the Commissioner under subsection 16‑170(4)).
Penalty: 20 penalty units.
Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
(2) An offence under subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
16‑180 Commissioner may exempt entity from giving payment summary
(1) The Commissioner may, having regard to the circumstances of a particular case or class of cases, exempt an entity from specified requirements of any of sections 16‑155 to 16‑167. If the Commissioner does so, the exemption has effect accordingly.
(2) An exemption must be made:
(a) if it applies to a particular entity—by a written notice given to that entity; or
(b) if it applies to a class of entities—by legislative instrument.
16‑182 Definition of reportable employer superannuation contribution
(1) A reportable employer superannuation contribution, for an individual for an income year, is an amount that has been, is, or will be contributed in respect of the income year:
(a) by an employer of the individual, or an *associate of the employer, for the individual’s benefit; and
(b) to a *superannuation fund or an *RSA;
to the extent that either or both of the following paragraphs apply:
(c) the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the size of the amount;
(d) the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the way the amount was, is or will be contributed so that his or her assessable income is reduced.
(2) However, an amount is not a reportable employer superannuation contribution to the extent that it is included in the individual’s assessable income for the income year.
(3) For the purposes of this section, employer has the expanded meaning given by section 12 of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).
(4) For the purposes of this section, disregard whether any *superannuation benefits arising from a contribution are payable to a *SIS dependant of the individual if the individual dies before or after becoming entitled to receive the benefits.
(5) For the purposes of paragraph (1)(c), treat the individual as neither having, nor being able reasonably to be expected to have, the capacity to influence the size of the amount if:
(a) the employer or *associate is required to contribute the amount by:
(i) an *industrial instrument; or
(ii) the rules of a *superannuation fund; and
(b) the individual does not and did not have, and is not able reasonably to be expected to have or have had, the capacity to influence the content of that instrument or those rules, to the extent that the instrument or rules relate to:
(i) the requirement to contribute the amount; or
(ii) the size of the amount.
Subdivision 16‑D—Additional rights and obligations of entity that makes a payment
Table of sections
16‑195 Payer’s right to recover amounts of penalty: certain withholding taxes
16‑195 Payer’s right to recover amounts of penalty: certain withholding taxes
(1) An entity that has paid an amount of penalty under section 16‑30, 16‑35 or 16‑40 for a *withholding payment covered by:
(a) Subdivision 12‑F (about a dividend, interest or royalty payment); or
(aa) section 12‑305 (about a departing Australia superannuation payment); or
(ab) Subdivision 12‑FC (about labour mobility programs); or
(b) section 12‑320 (about a mining payment); or
(c) Subdivision 12‑H (about distributions of withholding MIT income);
may recover an amount equal to the amount of penalty from the person liable to pay the *withholding tax, or *mining withholding tax, for the withholding payment.
Note Sections 16‑30, 16‑35 and 16‑40 provide for an administrative penalty for failing to comply with Division 12 or 14.
(2) Subsection (3) applies if an entity has paid an amount of penalty under section 12‑415 to the Commissioner for a failure to give a notice, or to make details available on a website, as required by section 12‑395 in relation to an amount (the relevant amount).
(3) The entity may recover from another entity that is liable to pay *managed investment trust withholding tax in relation to an amount attributable to the relevant amount the lesser of:
(a) an amount equal to the amount of that tax that the other entity is liable to pay; and
(b) the amount of the penalty.
Division 18—Recipient’s entitlements and obligations
Table of Subdivisions
18‑A Crediting withheld amounts
18‑B Refund of certain withheld amounts
18‑C Recipient’s obligations
18‑D Directors etc. of non‑complying companies
Subdivision 18‑A—Crediting withheld amounts
Guide to Subdivision 18‑A
18‑1 What this Subdivision is about
In general, an entity:
• that receives a withholding payment (except one covered by section 12‑215, 12‑250 or 12‑285, Subdivision 12‑FC, or subsection 12‑390(4)); or
• that is the foreign resident for which a withholding payment covered by section 12‑215, 12‑250 or 12‑285, Subdivision 12‑FC, or subsection 12‑390(4), (or a part of it) is received;
is entitled to a credit for the amount withheld from the withholding payment.
However, if that entity is a partnership or trust, a partner, beneficiary or trustee may be entitled to the credit.
This Subdivision tells you:
• who is entitled to a credit; and
• how to work out the amount of the credit.
How a credit is applied is set out in Division 3 of Part IIB.