INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 3A - Collection of tax in respect of certain payments for work  

Subdivision B - Operative provisions  

SECTION 221YHA   INTERPRETATION  

221YHA(1)   [Definitions]  

In this Division, unless the contrary intention appears:

"construction permit"
means a permit or other approval that is required by a law of the Commonwealth, a State or a Territory in connection with the undertaking or carrying out of a construction project;

"construction project"
means:

(a) the construction, erection, installation, alteration, modification, repair or improvement of a structure;

(b) the demolition, destruction, dismantling or removal of a structure; or

(c) the undertaking of earthworks or the clearing of land,

and includes:

(d) the installation in, or in connection with, a structure of a system of, or device for, heating, insulation, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, security or fire protection;

(e) the painting or decorating of a structure;

(f) landscape gardening; and

(g) such other activities in relation to structures or land as may be prescribed for the purposes of this definition;

"contract"
means a contract, whether express or implied, whether or not in writing and whether or not enforceable, or intended to be enforceable, by legal proceedings;

"deduction exemption certificate"
means a certificate issued by the Commissioner under section 221YHQ ;

"deduction exemption certificate number"
means the number included in a deduction exemption certificate in accordance with paragraph 221YHQ(1A)(a) ;

"deduction form"

"deduction variation certificate"
means a certificate issued by the Commissioner under section 221YHP ;

"deduction variation certificate number"
means the number included in a deduction variation certificate in accordance with subsection 221YHP(3) ;

"deduction variation certificate percentage"
means the percentage specified in a deduction variation certificate in accordance with subsection 221YHP(2) ;

"eligible paying authority"
has the meaning given by subsection (4) of this section;

"first instalment payment"

"government body"
means the Commonwealth, a State, a Territory or an authority of the Commonwealth or a State or Territory;

"higher deduction percentage election"
has the meaning given by subsection 221YHR(4) ;

"higher deduction percentage election form"
has the meaning given by subsection 221YHR(3) ;

"householder"
has the meaning given by subsection (3) of this section;

"householder notification form"

"householder payment summary form"
means a document, in a form approved by the Commissioner for the purposes of this definition, that requires the provision of information relating to prescribed payments made by a householder in respect of the whole or part of a construction project;

"instalment series"

"invoice"

"issuing authority"
means a person or body that issues construction permits;

"month"

"non-declaration percentage"
means 48.25% or any other percentage that may be prescribed in substitution by regulations for the purposes of this definition;

"non-instalment payment"

"non-reportable payment"

"obligation transfer form"

"ordinary percentage"
means 20% or any other percentage that may be prescribed in substitution by regulations for the purposes of this definition;

"owner-builder"
has the meaning given by subsection (3B) of this section;

"payee"
means a person who receives, or is entitled to receive, a prescribed payment under a contract;

"payee declaration"
has the meaning given by subsection 221YHB(4) ;

"payee declaration form"
has the meaning given by subsection 221YHB(3) ;

"paying authority"
means a person who makes, or is liable to make, a prescribed payment;

"paying authority notification form"
means a document in a form published by the Commissioner in the Gazette for the purposes of this definition;

"payment"
means a payment that is made, or is liable to be made, under a contract the performance of which, in whole or in part, involves the performance of work (whether or not by the person to whom the payment is made or is liable to be made), but does not include:

(a) a payment of salary or wages within the meaning of section 221A , other than salary or wages to which paragraph (a) of the definition of ``salary or wages'' in subsection 221A(1) applies;

(b) a payment of exempt income; or

(c) a payment made to or by a trustee, being the trustee of the estate of a bankrupt or the liquidator of a company that is being wound up;

"payment summary form"
means a document, in a form approved by the Commissioner for the purposes of this definition, that requires the provision of information relating to prescribed payments made by paying authorities who are not householders in relation to the payments;

"person"
includes a company and a government body;

"prescribed certificate"

"prescribed payment"
means a payment of a kind declared by the regulations to be a prescribed payment for the purposes of this Division;

"reconciliation form"

"reconciliation statement form"
means a document, in a form approved by the Commissioner for the purposes of this definition, that requires the reconciliation of amounts deducted from prescribed payments and amounts of deductions sent to the Commissioner;

"remittance advice form"
means a document, in a form approved by the Commissioner for the purposes of this definition, that requires the provision of information relating to deductions from prescribed payments that are sent to the Commissioner;

"reporting exemption certificate"

"reporting exemption declaration"

"structure"
includes a part of a structure;

"subsequent instalment payment"

"tax file number"
has the meaning given by section 202A ;

"work"
includes:

(a) services; and

(b) work of a professional, technical, skilled or artistic kind,

and, without limiting the generality of the foregoing, includes activities of a kind referred to in subparagraph 221A(2)(c)(i) or (ii).

221YHA(2)   [Related construction activities]  

Where:

(a) each of 2 or more activities would, but for this subsection, constitute a construction project; and

(b) the activities are so related that, taken together, they are reasonably capable of being regarded as a single activity,

the activities shall, for the purposes of the application of this Division, be taken to be a single construction project and not to constitute separate construction projects.

221YHA(3)   [Householder]  

Subject to subsection (3A), where:

(a) a natural person enters into a contract or contracts for the undertaking or carrying out by another person, or by other persons, of a construction project, or of a part of a construction project;

(b) the payments to be made by the natural person under the contract or contracts are wholly or principally of a private or domestic nature; and

(c) the cost of the construction project, including the cost of:

(i) goods or materials used in, or forming part of, the construction project; and

(ii) surveying, design or other activities preliminary to the construction project,

may reasonably be expected to exceed $10,000,

the natural person is, for the purposes of this Division, a householder in relation to any prescribed payment that is made, or is liable to be made, by the natural person under the contract or contracts.

221YHA(3A)   [Owner-builders]  

For the purposes of this Division, a person is not a householder in relation to a prescribed payment in relation to which the person is an owner-builder.

221YHA(3B)   [Natural person owner-builder]  

Where:

(a) if subsection (3A) had not been enacted, a natural person would, for the purposes of this Division, be a householder in relation to a prescribed payment that is made, or is liable to be made, by the natural person under a contract or contracts for the undertaking or carrying out of a construction project, or of a part of a construction project;

(b) an issuing authority has issued in the name of:

(i) the natural person; or

(ii) a person (in this subsection referred to as the ``authorised person'' ) other than the natural person,

a construction permit in respect of the construction project;

(ba) if subparagraph (b)(i) applies and the natural person has entered into a contract with another person (in this paragraph called the ``actual builder'' ) in relation to the construction project:

(i) so much of the construction project as is proposed to be carried out or undertaken by the actual builder or pursuant to a contract or contracts entered into, or proposed to be entered into, by the actual builder; and

(ii) so much of the construction project as has been carried out or undertaken by, or pursuant to a contract or contracts entered into by, the actual builder;

together constitute neither the whole nor the greater part of the construction project; and

(c) in a case where subparagraph (b)(ii) applies:

(i) so much of the construction project as is proposed to be carried out or undertaken by the authorised person or pursuant to a contract or contracts entered into, or proposed to be entered into, by the authorised person; and

(ii) so much of the construction project as has been carried out or undertaken by, or pursuant to a contract or contracts entered into by, the authorised person,

together constitute neither the whole nor the greater part of the construction project,

the natural person is, for the purposes of this Division, an owner-builder in relation to any prescribed payment that is made, or is liable to be made, by the natural person under the contract or contracts referred to in paragraph (a).

221YHA(4)   [Eligible paying authority]  

For the purposes of this Division, a person who is a paying authority in relation to a prescribed payment is an eligible paying authority in relation to the prescribed payment if:

(a) the person is not a natural person; or

(b) the person is a natural person and:

(i) the person is a householder, or an owner-builder, in relation to the payment; or

(ii) the payment is not wholly or principally of a private or domestic nature.

221YHA(5)   [Certain prescribed payments not of private or domestic nature]  

Without limiting the generality of subsections (3) and (4), a prescribed payment made by a natural person shall be taken not to be of a private or domestic nature if it is made by the person in his capacity as trustee of a trust estate or as a member of a religious, charitable, social, cultural, recreational or other organization or body.

221YHA(6)    

221YHA(7)