Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Taxation Administration Act 1953
1 Subsection 10 - 5(1) in Schedule 1 (after table item 22A)
Insert:
22B | A payment (of a kind set out in the regulations) to a foreign resident | 12 - 315 |
22C | A payment (of a kind set out in the regulations) received for a foreign resident | 12 - 317 |
2 Subsection 12 - 1(2) in Schedule 1
Omit "or 12 - 120", substitute ", 12 - 120, 12 - 315 or 12 - 317".
3 Subsection 12 - 1(3) in Schedule 1
Omit "or 12 - 120", substitute ", 12 - 120, 12 - 315 or 12 - 317".
4 Subsection 12 - 5(2) in Schedule 1
Omit "the specific rules in the table", substitute "the specific rules in the table, and the specific rule in subsection (3)".
5 At the end of section 12 - 5 in Schedule 1 (before the note)
Add:
(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.
6 After Subdivision 12 - FA in Schedule 1
Insert:
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 (within the meaning of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936 ); 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; 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.
7 Subsection 15 - 10(2) in Schedule 1
After "12 - FA", insert ", 12 - FB".
8 Subsection 16 - 25(1) in Schedule 1 (note 2)
Omit "and 16 - 40", substitute ", 16 - 40 and 16 - 43".
9 Subsection 16 - 25(2) in Schedule 1 (note 2)
Omit "and 16 - 40", substitute ", 16 - 40 and 16 - 43".
10 At the end of subsection 16 - 35(4) in Schedule 1
Add "or by Subdivision 12 - FB (about payments to foreign residents)".
11 Subsection 16 - 40(2) in Schedule 1
Omit "entity", substitute " * exempt Australian government agency".
12 Subsection 16 - 40(2) in Schedule 1 (note)
Omit "entity", substitute "exempt Australian government agency".
13 After section 16 - 40 in Schedule 1
Insert:
(1) 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 (the penalty amount ) equal to that amount.
(2) The penalty amount is due at the time when the * exempt Australian government agency would have had to pay to the Commissioner the * amount required to be withheld.
Note: Division 298 in this Schedule contains machinery provisions for civil penalties.
14 Subsection 16 - 45(1) in Schedule 1
Omit "or 16 - 40", substitute ", 16 - 40 or 16 - 43".
15 Section 16 - 45 in Schedule 1 (heading)
Repeal the heading, substitute:
16 - 45 Remission of penalty under section 16 - 30, 16 - 40 or 16 - 43
16 Section 16 - 50 in Schedule 1
Omit "or 16 - 40", substitute ", 16 - 40 or 16 - 43".
17 Paragraph 16 - 153(1)(a) in Schedule 1
After "Subdivision 12 - FA", insert ", section 12 - 315".
18 Paragraph 16 - 153(1)(b) in Schedule 1
After "Subdivision 12 - FA", insert ", section 12 - 315".
19 Paragraph 16 - 153(1)(c) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
20 Paragraph 16 - 153(1)(d) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
21 Paragraph 16 - 155(1)(a) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
22 After paragraph 16 - 155(1)(b) in Schedule 1
Insert:
(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
23 Paragraph 16 - 160(1)(a) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
24 After paragraph 16 - 160(1)(b) in Schedule 1
Insert:
(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
25 At the end of section 18 - 10 in Schedule 1
Add:
(2) If an entity withholds an amount from a * withholding payment as required by section 12 - 317, apply sections 18 - 15, 18 - 20 and 18 - 25 in relation to the payment as if the payment had been made to the likely foreign recipient mentioned in section 12 - 317 (instead of to the intermediary mentioned in that section).
26 Paragraph 20 - 35(2)(a) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
27 Paragraph 20 - 35(2)(b) in Schedule 1
Omit "or 12 - 285", substitute ", 12 - 285 or 12 - 317".
28 Section 20 - 80 in Schedule 1 (before table item 1)
Insert:
1A | Decision not to grant an exemption under subsection 12 - 319(1) from withholding obligations in relation to sections 12 - 315 and 12 - 317 |
29 Subsection 250 - 10(2) in Schedule 1 (table item 100, column 3)
Omit "and 16 - 40(2)", substitute ", 16 - 40(2) and 16 - 43(2)".
30 Application of amendments
The amendments of the Taxation Administration Act 1953 made by this Schedule apply to payments made, and non - cash benefits provided, on or after 1 July 2003.