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 221YHQ   DEDUCTION EXEMPTION CERTIFICATES AND REPORTING EXEMPTION APPROVALS  

221YHQ(1)   [Requests re exemption]  

A person may apply to the Commissioner, in a form approved by the Commissioner for the purpose, for:

(a) the issue to the person of a deduction exemption certificate; or

(b) approval for the person to quote a reporting exemption number.

221YHQ(1A)   [Duty of Commissioner]  

If the conditions in subsection (2) are met or subsection (4) applies, the Commissioner must, in accordance with the application, either:

(a) issue the deduction exemption certificate to the person and include in it a number as its deduction exemption certificate number; or

(b) by writing sent to the person, approve the person quoting, in the manner set out in subsection (10), a specified number as a reporting exemption number during a period (not exceeding 3 years) specified in the approval.

221YHQ(2)   [Conditions of issue]  

For the purposes of subsection (1A), the conditions are that:

(a) the Commissioner is satisfied:

(i) that the applicant has, for a period (in this paragraph referred to as the ``relevant period'' ) of 3 years immediately preceding the date of the application, been regularly engaged in carrying on business in Australia;

(ii) that, during the relevant period, the applicant has, in relation to each business carried on by the applicant during the relevant period:

(A) maintained such accounting and taxation records in relation to the business as correctly record and explain the transactions and financial position of the business;

(B) conducted the business at or from established premises that were advertised to the public as being premises from which the business was carried on; and

(C) conducted all financial transactions relating to the business through a bank account or bank accounts that was or were separate from any private or domestic account maintained by the applicant;

(iii) that, during the relevant period, the applicant has satisfactorily complied with his obligations under Acts administered by the Commissioner; and

(iv) (Omitted by No 227 of 1992)

(b) if the applicant kept taxation and accounting records in relation to the year of income in relation to which the applicant last furnished a return of income under section 161 and the records:

(i) include a balance sheet; and

(ii) have been audited by a person who, in the opinion of the Commissioner, is competent and qualified to audit the records,

the applicant has furnished to the Commissioner a declaration by a prescribed person that the prescribed person has examined the records and has satisfied himself that, to the best of his knowledge and belief based on that examination, the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income;

(c) if the applicant is a company, partnership or trustee of a trust estate and is not required to furnish a declaration in accordance with paragraph (b) in relation to the year of income in relation to which the applicant last furnished a return of income under section 161 - the applicant has furnished to the Commissioner:

(i) a statement setting out details of all property (including money) acquired or disposed of by the applicant during that year of income;

(ii) a statement reconciling the details specified in accordance with subparagraph (i) with the assessable income and allowable deductions specified in the return of income; and

(iii) a declaration by a prescribed person that the prescribed person has examined the statements prepared in accordance with subparagraphs (i) and (ii) and has satisfied himself that, to the best of his knowledge and belief based on that examination, the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income;

(d) if the applicant is not a company, partnership or trustee of a trust estate and is not required to furnish a declaration in accordance with paragraph (b) in relation to the year of income in relation to which the applicant last furnished a return of income under section 161 - the applicant has furnished to the Commissioner:

(i) a statement setting out details of all property (including money) acquired or disposed of by the applicant during that year of income (including details relating to acquisitions or disposals of a private or domestic nature);

(ii) a statement reconciling the details specified in accordance with subparagraph (i) with the assessable income and allowable deductions specified in the return of income; and

(iii) a declaration by a prescribed person that the prescribed person has examined the statements prepared in accordance with subparagraphs (i) and (ii) and has satisfied himself that, to the best of his knowledge and belief based on that examination, the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income; and

(e) where paragraph (c) or (d) applies in relation to the applicant and the Commissioner requires any statements or declarations of the kind referred to in those paragraphs in relation to an associate of the applicant - the applicant or the associate has furnished to the Commissioner those statements or declarations.

221YHQ(3)   [References]  

For the purposes of subsection (2):

(a) (Omitted by No 124 of 1984.)

(b) a reference to a prescribed person is a reference to:

(i) a person who is a registered tax agent within the meaning of Part VIIA ; or

(ii) a person who, in the opinion of the Commissioner, is competent and qualified to furnish a declaration required by that subsection; and

(c) a reference to an associate of a person (in this paragraph referred to as the ``relevant person'' ) is a reference to:

(i) where the relevant person is a company (including a company in the capacity of trustee of a trust estate) - any person who is a director of, or shareholder in, the company;

(ii) where the relevant person is a partnership - any of the partners in the partnership; and

(iii) in any other case - any relative of the relevant person.

221YHQ(4)   [Where unreasonable not to issue certificate]  

If the conditions in subsection (2) are not met, but having regard to:

(a) the purpose of this Division; and

(b) the special circumstances (if any) that exist or existed in relation to the applicant; and

(c) such other matters (if any) as the Commissioner thinks fit;

the Commissioner is of the opinion that it would be unreasonable not to issue the deduction exemption certificate or approve the person quoting a reporting exemption number, the Commissioner must issue the certificate or approve the quoting.

221YHQ(5)   [Special circumstances re company, partnership, trustee]  

The special circumstances to which the Commissioner may have regard in the application of subsection (4) in relation to a person being a company, a partnership or the trustee of a trust estate include:

(a) in the case of a company being a private company in relation to the year of income next preceding the year of income to which, or to part of which, the certificate, if issued, or approval to quote, if given, will relate - the extent to which the requirements of subparagraphs (2)(a)(i), (ii) and (iii) have been complied with in relation to any businesses carried on by directors of, or shareholders in, the company;

(b) in the case of a company to which paragraph (a) does not apply - the extent to which the requirements of subparagraphs (2)(a)(i), (ii) and (iii) have been complied with in relation to any businesses carried on by directors of the company;

(c) in the case of a partnership - the extent to which the requirements of subparagraphs (2)(a)(i), (ii) and (iii) have been complied with in relation to any businesses carried on by partners in the partnership; or

(d) in the case of a trustee of a trust estate - the extent to which the requirements of subparagraphs (2)(a)(i), (ii) and (iii) have been complied with in relation to any businesses (not including the business of the trust estate) carried on by the trustee.

221YHQ(6)    

221YHQ(7)   [``Person regularly engaged in carrying on business in Australia'']  

In the application of subparagraph (2)(a)(i) in relation to a person in the capacity of trustee of a trust estate, the reference to the person having been regularly engaged in carrying on business in Australia shall be read as a reference to the person having been regularly engaged in carrying on the business of the trust estate in Australia.

221YHQ(8)   [Period certificate in force]  

A deduction exemption certificate comes into force when it is issued to the applicant and, subject to section 221YHS , remains in force at all times afterwards.

221YHQ(9)   [Validity of approval to quote]  

Subject to section 221YHSA , an approval to quote a reporting exemption number is in force at all times during the period specified in the approval.

221YHQ(10)   [How to quote reporting exemption number]  

If the Commissioner has given approval to a person to quote a number as a reporting exemption number, the person quotes the number to an eligible paying authority by giving written notice to the eligible paying authority, while the approval is in force, stating the number and the day on which the period specified in the approval ends.

221YHQ(11)   [Duty of eligible paying authority]  

If a person quotes a reporting exemption number to an eligible paying authority, the eligible paying authority must keep the notice:

(a) if the eligible paying authority is a householder in relation to all prescribed payments that the eligible paying authority makes to the person during the period specified in the approval - for 1 year after the end of the financial year in which the period ends; and

(b) in any other case - for 5 years after the end of the financial year in which the period ends.

221YHQ(12)   [Penalty]  

If the eligible paying authority (not being a government body) contravenes subsection (11), he or she is guilty of an offence punishable on conviction by a maximum fine of $1,000.