Taxation Administration Act 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-5 - PAY AS YOU GO (PAYG) WITHHOLDING  

Division 18 - Recipient ' s entitlements and obligations  

Subdivision 18-D - Directors etc. of non-complying companies  

PAYG withholding non-compliance tax

SECTION 18-135   ASSOCIATES OF DIRECTORS OF NON-COMPLYING COMPANIES  

Liability to pay PAYG withholding non-compliance tax

18-135(1)    
An individual must pay * PAYG withholding non-compliance tax in relation to a company for an income year of the individual if:

(a) at a time when another individual (the director ) was a director (within the meaning of the Corporations Act 2001 ) of the company, the first individual was an * associate of the director; and

(b) the company was required to pay to the Commissioner under subsection 16-70(1) in this Schedule amounts:

(i) the company withheld from * withholding payments the company made to any entities during the income year of the individual; and

(ii) to which subsection (2) of this section applies; and

(c) the company did not pay the total of those amounts to the Commissioner on or before the last day (the non-compliance day ) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16-70(1) ; and

(d) subsection (3) or (6) of this section applies; and

(e) a credit to which the individual is entitled under section 18-15 is attributable to an extent to * amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.

Note:

For the purposes of paragraph (1)(e), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 16-70(1) .

18-135(2)    
This subsection applies to * amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day ) under subsection 16-70(1) , if:

(a) all of the following subparagraphs apply:

(i) the director was a director (within the meaning of the Corporations Act 2001 ) of the company on the payment day;

(ii) the individual was an * associate of the director on the payment day;

(iii) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the payment day; or

(b) all of the following subparagraphs apply:

(i) the director became a director of the company after the payment day;

(ii) the director was still a director of the company 30 days after becoming a director;

(iii) the individual was an * associate of the director throughout that 30 day period;

(iv) the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16-70(1) on or before the last of those 30 days.

18-135(3)    
This subsection applies if the Commissioner is satisfied that:

(a) because of:

(i) the individual ' s relationship with the director; or

(ii) a relationship of the individual with the company;

the individual knew, or could reasonably have been expected to know, of the company ' s failure to pay the total of the amounts mentioned in paragraph (1)(c) to the Commissioner; and

(b) none of the following subparagraphs applies:

(i) the individual took all reasonable steps to influence the director to cause the company to notify the Commissioner under Subdivision 18-C of the relevant * amounts withheld;

(ii) the individual took all reasonable steps to influence the director to cause one of the events mentioned in subsection (4) to happen, or there were no reasonable steps the individual could have taken to influence the director to cause any of those events to happen;

(iii) the individual reported the company ' s non-payment to the Commissioner or to another authority with responsibilities relevant to the operation of the company.

Example:

Other authorities with responsibilities relevant to the operation of the company could include the Minister, the police, ASIC or the Building and Construction Industry Commissioner.

18-135(4)    
The following are the events:

(a) the company pays the total of the amounts mentioned in paragraph (1)(c) to the Commissioner;

(b) an administrator of the company is appointed under section 436A , 436B or 436C of the Corporations Act 2001 ;

(ba) a small business restructuring practitioner for the company is appointed under section 453B of that Act;

(c) the company begins to be wound up (within the meaning of that Act).

18-135(5)    
In determining what are reasonable steps for the purposes of paragraph (3)(b), have regard to:

(a) when, and for how long, the individual was an * associate of the director; and

(b) when, and for how long, the director was a director and took part in the management of the company; and

(c) all other relevant circumstances.

18-135(6)    
This subsection applies if:

(a) the individual was an employee of the company; and

(b) the Commissioner is satisfied that the company treated the individual more favourably than it treated other employees of the company.

Amount of tax

18-135(7)    
The amount of the * PAYG withholding non-compliance tax the individual must pay is the lesser of:

(a) the extent of the credit mentioned in paragraph (1)(e); and

(b) the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).