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Taxation Laws Amendment Act (No. 3) 1998 (47 of 1998)

Schedule 4 Payment of RPS, PAYE and PPS deductions to Commissioner

Part 1 Insertion of new Division 1AAA

Income Tax Assessment Act 1936

1 After Division 1 of Part VI

Insert:

Division 1AAA - Payment of RPS, PAYE and PPS deductions to Commissioner

Subdivision A - Outline of Division

220AAA Outline of Division

This Division sets out when and how amounts deducted under:

(a) Division 1AA (RPS); and

(b) Division 2 (PAYE); and

must be paid to the Commissioner.

Remitters are divided into 3 categories - small, medium and large. The timing and method of payment depends on the category of the remitter.

Failure to remit payments or to comply with other requirements of this Division may be a criminal offence or result in penalties.

Subdivision B - Large remitters

220AAB Who is a large remitter - general

General rule

(1) Subject to this section, a person is a large remitter in relation to a particular month if any of the following paragraphs applies:

(a) the total of the deductions that the person makes under Divisions 1AA, 2 and 3A for the financial year ending on 30 June 1997 exceeded $1 million;

(b) both of the following subparagraphs apply:

(i) at the end of the financial year (the 1996-97 year ) ending on 30 June 1997, the person was included in a company group;

(ii) the total of the deductions under Divisions 1AA, 2 and 3A, for the 1996-97 year, of the persons that were included in that company group at the end of the 1996-97 year exceeded $1 million;

(c) the total of the deductions that the person makes under Divisions 1AA, 2 and 3A for any financial year ending on or after 30 June 1998 and before that month exceeded $1 million;

(d) both of the following subparagraphs apply:

(i) at the end of any financial year (the threshold year ) ending on or after 30 June 1998 and before that month, the person was included in a company group;

(ii) the total of the deductions under Divisions 1AA, 2 and 3A, for the threshold year, of the persons that were included in that company group at the end of the threshold year exceeded $1 million;

Note: Company group is defined in section 220AAI.

(e) that month is covered by a notice in force under section 220AAC;

and that month is not covered by a notice in force under subsection (3).

Not large remitter before certain times

(2) A person:

(a) is not a large remitter in relation to any month before July 1998; and

(b) is not a large remitter in relation to July or August 1998 unless the person is covered by paragraph (1)(a) or (b); and

(c) is not a large remitter because of paragraph (1)(c) or (d) in relation to July or August in a later financial year unless the person was a large remitter in relation to June of the previous financial year.

Commissioner's determination that person not a large remitter

(3) The Commissioner may, by notice in writing served on a person who would otherwise be a large remitter:

(a) determine that the person is not a large remitter in relation to:

(i) a month or months specified in the notice; or

(ii) all months after and including a month specified in the notice; and

(b) revoke or vary any such determination.

Note: A person who is not a large remitter because of this subsection will generally be a medium remitter: see paragraph 220AAJ(1)(d).

(4) A notice under subsection (3) does not have effect in relation to a particular month unless the notice was served before the beginning of the month.

220AAC Who is a large remitter - determination by Commissioner

(1) The Commissioner may, by notice in writing served on a person who would otherwise be a medium remitter or a small remitter in relation to a month:

(a) determine that the person is a large remitter in relation to:

(i) a month or months specified in the notice; or

(ii) all months after and including a month specified in the notice; and

(b) revoke or vary any such determination.

(2) A notice under subsection (1) does not have effect in relation to any month earlier than the second month following the month in which the notice is served.

Matters to have regard to

(3) In exercising powers under subsection (1), the Commissioner may have regard to the following matters:

(a) any arrangement that was entered into or carried out after 15 August 1989 for the purpose, or for purposes that included the purpose, of avoiding the application of section 220AAE or of paragraph 221F(5)(a) in relation to deductions made by a person;

(b) the extent (if any) to which the person concerned pays:

(i) salary or wages to persons to whom salary or wages were previously paid by another person; or

(ii) reportable payments to persons to whom reportable payments were previously paid by another person; or

(iii) prescribed payments to persons to whom prescribed payments were previously paid by another person;

(c) the amount that the Commissioner considers the person is likely to deduct under Divisions 1AA, 2 and 3A in the following 12 months;

(d) such other matters as the Commissioner considers relevant.

(4) The reference in paragraph (3)(a) to paragraph 221F(5)(a) is a reference to that paragraph as in force before the commencement of Schedule 4 to the Taxation Laws Amendment Act (No. 3) 1998.

220AAD Application to cease to be a large remitter

A person who is a large remitter in relation to a month may apply in writing to the Commissioner for a determination under subsection 220AAB(3) that the person is not a large remitter in relation to particular months.

220AAE When amounts must be remitted

(1) A person who is a large remitter in relation to a month must pay to the Commissioner the amount of any deductions that the person makes under Division 1AA, 2 or 3A during that month as set out in the following table:

Table of payments by large remitters
Item	Day on which amount deducted	Payment day
1	Saturday or Sunday	The second Monday after that day
2	Monday or Tuesday	The first Monday after that day
3	Wednesday	The second Thursday after that day
4	Thursday or Friday	The first Thursday after that day

Note: The payments covered by items 1 and 2 would normally be paid together, as would the payments covered by items 3 and 4.

(2) The payments must be sent in sufficient time for them to be received by the Commissioner in the ordinary course of events on or before the payment day specified in the table.

(3) A person (other than a government body) who intentionally or recklessly contravenes this section is guilty of an offence punishable on conviction by imprisonment for a maximum period of 12 months.

Note: See section 220AAV for an alternative civil penalty for contravening this section.

220AAF How amounts must be paid

A large remitter must pay an amount by a means of electronic transfer approved in writing by the Commissioner. If a large remitter pays an amount other than by electronic transfer, the large remitter will be liable for a penalty under section 220AAW.

220AAG What else must be sent

(1) Each payment that is made to the Commissioner must be accompanied by a statement about the payment and about the deductions in relation to which the payment is made.

(2) The Commissioner may, by written notice, require statements to be in a particular form, contain particular information and be given in a particular manner. For example, the Commissioner may require certain statements to be given by way of electronic transmission.

220AAH Variation of requirements

The Commissioner may, in such cases and to the extent the Commissioner thinks fit, by written notice given to a large remitter:

(a) extend any time set out in section 220AAE for compliance with the requirements of that section; or

(b) with the agreement of the large remitter, vary the requirements of section 220AAF or 220AAG in their application to the large remitter.

220AAI Grouping of companies

(1) For the purposes of this Division, a company group consists of any collection of 2 or more companies each of which is a group company in relation to each of the others.

(2) For the purposes of this section, a company is a group company in relation to another company if:

(a) one of the companies is a 100% subsidiary of the other company; or

(b) each of the companies is a 100% subsidiary of the same third company.

(3) A company (the subsidiary company ) is a 100% subsidiary of another company (the holding company ) if all the shares in the subsidiary company are beneficially owned by:

(a) the holding company; or

(b) one or more 100% subsidiaries of the holding company; or

(4) A company (other than the subsidiary company) is a 100% subsidiary of the holding company if, and only if:

(a) it is a 100% subsidiary of the holding company; or

(b) it is a 100% subsidiary of a 100% subsidiary of the holding company;

because of any other application or applications of this section.

Subdivision C - Medium remitters

220AAJ Who is a medium remitter - general

General rule

(1) Subject to this section, a person is a medium remitter in relation to a particular month if the person is not a large remitter in relation to that month and any of the following paragraphs applies:

(a) the total of the deductions that the person makes under Divisions 1AA, 2 and 3A for the period between 1 July 1997 and 31 March 1998 exceeded $18,750;

(b) the total of the deductions that the person makes under Divisions 1AA, 2 and 3A for any financial year ending on or after 30 June 1998 and before that month exceeded $25,000;

(d) that month is covered by a notice in force under subsection 220AAB(3) (determination that the person is not a large remitter);

and that month is not covered by a notice in force under subsection (3).

Not medium remitter before certain times

(2) A person:

(a) is not a medium remitter in relation to any month before July 1998; and

(b) is not a medium remitter in relation to July, August or September 1998 unless the person is covered by paragraph (1)(a), (c) or (d); and

(c) is not a medium remitter because of paragraph (1)(b) in relation to July, August or September in a later financial year unless the person was a medium remitter in relation to June of the previous financial year.

Commissioner's determination that person not a medium remitter

(3) The Commissioner may, by notice in writing served on a person who would otherwise be a medium remitter:

(a) determine that the person is not a medium remitter in relation to:

(i) a month or months specified in the notice; or

(ii) all months after and including a month specified in the notice; and

(b) revoke or vary any such determination.

Note: A person who is not a medium remitter because of this subsection will be a small remitter.

(4) A notice under subsection (3) does not have effect in relation to a particular month unless the notice was served before the beginning of the month.

220AAK Who is a medium remitter - determination by Commissioner

(1) The Commissioner may, by notice in writing served on a person who would otherwise be a small remitter:

(a) determine that the person is a medium remitter in relation to:

(i) a month or months specified in the notice; or

(ii) all months after and including a month specified in the notice; and

(b) revoke or vary any such determination.

(2) A notice under subsection (1) does not have effect in relation to any month earlier than the second month following the month in which the notice is served.

Matters to have regard to

(3) In exercising powers under subsection (1), the Commissioner may have regard to the following matters:

(a) any failure to comply with one or more of the person's obligations under this Division as a result of which the Commissioner considers that it is no longer appropriate for the person to be a small remitter;

(b) any arrangement that was entered into or carried out after 13 May 1997 for the purpose, or for purposes that included the purpose, of avoiding the application of section 220AAM in relation to deductions made by a person;

(i) salary or wages to persons to whom salary or wages were previously paid by another person; or

(ii) reportable payments to persons to whom reportable payments were previously paid by another person; or

(iii) prescribed payments to persons to whom prescribed payments were previously paid by another person;

(d) the amount that the Commissioner considers the person is likely to deduct under Divisions 1AA, 2 and 3A in the following 12 months;

(e) such other matters as the Commissioner considers relevant.

220AAL Application to cease to be a medium remitter

A person who is medium remitter in relation to a month may apply in writing to the Commissioner for a determination under subsection 220AAJ(3) that the person is not a medium remitter in relation to particular months.

220AAM When amounts must be remitted

(1) A person who is a medium remitter in relation to a month must pay to the Commissioner the amount of any deductions that the medium remitter makes under Division 1AA, 2 or 3A in that month not later than the 7th day after the end of the month.

(2) The amounts must be sent in sufficient time for them to be received by the Commissioner in the ordinary course of events on or before the day specified in subsection (1).

Note: See section 220AAV for an alternative civil penalty for contravening this section.

220AAN How amounts must be paid

A medium remitter must pay an amount:

(a) by a means of electronic transfer approved in writing by the Commissioner; or

(b) by any other means approved in writing by the Commissioner.

220AAO What else must be sent

(1) Each payment that is made to the Commissioner must be accompanied by a statement about the payment and about the deductions in relation to which the payment is made.

220AAP Variation of requirements

The Commissioner may, in such cases and to the extent the Commissioner thinks fit, by written notice given to a medium remitter:

(a) extend the time set out in section 220AAM for compliance with the requirements of that section; or

(b) with the agreement of the medium remitter, vary the requirements of section 220AAN or 220AAO in their application to the medium remitter.

Subdivision D - Small remitters

220AAQ Who is a small remitter

A person is a small remitter in relation to any month in relation to which the person is neither a large remitter nor a medium remitter.

220AAR When amounts must be remitted

(1) A person who is a small remitter in relation to a month must pay to the Commissioner the amount of any deductions that the person makes under Division 1AA, 2 or 3A in that month not later than the 7th day after the end of the quarter in which the month occurs. The quarters end at the end of 31 March, 30 June, 30 September and 31 December.

(2) The amounts must be sent in sufficient time for them to be received by the Commissioner in the ordinary course of events on or before the day specified in subsection (1).

Note: See section 220AAV for an alternative civil penalty for contravening this section.

220AAS How amounts must be paid

A small remitter must pay an amount:

(a) by a means of electronic transfer approved in writing by the Commissioner; or

(b) by any other means approved in writing by the Commissioner.

220AAT What else must be sent

(1) Each payment that is made to the Commissioner must be accompanied by a statement about the payment and about the deductions in relation to which the payment is made.

220AAU Variation of requirements

The Commissioner may, in such cases and to the extent the Commissioner thinks fit, by written notice given to a small remitter:

(a) extend the time set out in section 220AAR for compliance with the requirements of that section; or

(b) with the agreement of the small remitter, vary the requirements of section 220AAS or 220AAT in their application to the small remitter.

Subdivision E - Offences and penalties

220AAV Penalty for failure to send deductions to Commissioner

(1) This section applies if an amount (the principal amount ) payable to the Commissioner under section 220AAE, 220AAM or 220AAR by a person remains unpaid after the end of the period within which it is required to be paid.

(2) The principal amount continues to be payable by the person to the Commissioner.

Persons other than government bodies

(3) If the person is not a government body, the person is liable to pay to the Commissioner, by way of penalty:

(a) an amount (the relevant penalty amount ) equal to 20% of the principal amount; and

(b) an amount at the rate of 16% per annum of the sum of:

(i) so much of the principal amount as remains unpaid; and

(ii) so much of the relevant penalty amount as remains unpaid;

computed from the end of that period.

Government bodies

(4) If the person is a government body other than the Commonwealth, the person is liable to pay to the Commissioner, by way of penalty, an amount at the rate of 16% per annum on so much of the principal amount as remains unpaid, computed from the end of that period.

220AAW Large remitters - non-electronic payment

If a person, other than a government body, who is a large remitter pays an amount (the principal amount ) other than by electronic transfer, the person is liable to pay to the Commissioner, by way of penalty, an amount equal to the greater of:

(a) $500; or

(b) 16% per annum on the principal amount for a period of 7 days.

220AAX Commissioner may remit penalties

(1) This section applies to a penalty payable by a person under section 220AAV or 220AAW.

(2) The Commissioner may remit the whole or a part of a penalty payable under section 220AAV or 220AAW.

Criteria for remission - interest-based penalties

(3) If the penalty is payable by a person under paragraph 220AAV(3)(b) or subsection 220AAV(4) in relation to another amount that has not been paid (the principal amount ), the Commissioner may only remit the whole or a part of the penalty if:

(a) the Commissioner is satisfied that:

(i) the circumstances that contributed to the delay in payment of the principal amount were not due to, or caused directly or indirectly by, an act or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; or

(b) the Commissioner is satisfied that:

(i) the circumstances that contributed to the delay in payment of the principal amount were due to, or caused directly or indirectly by, an act or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and

(iii) having regard to the nature of those circumstances, it would be fair and reasonable to remit the whole or the part of the penalty; or

(c) the Commissioner is satisfied that there are special circumstances because of which it would be fair and reasonable to remit the penalty or the part of the penalty.

Criteria for remission - paying other than electronically

(4) If the penalty is payable by a person under section 220AAW, the Commissioner may only remit the whole or a part of the penalty if:

(a) the Commissioner is satisfied that:

(i) the circumstances that contributed to the payment not being made by electronic transfer were not due to, or caused directly or indirectly by, an act or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; or

(b) the Commissioner is satisfied that:

(i) the circumstances that contributed to the payment not being made by electronic transfer were due to, or caused directly or indirectly by, an act or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and

(iii) having regard to the nature of those circumstances, it would be fair and reasonable to remit the whole or the part of the penalty; or

(c) the Commissioner is satisfied that there are special circumstances because of which it would be fair and reasonable to remit the penalty or the part of the penalty.

Notification of decisions

(5) If the Commissioner makes a decision:

(a) to remit part only of a penalty payable under paragraph 220AAV(3)(a) or section 220AAW; or

(b) not to remit any part of such a penalty;

the Commissioner must give written notice of the decision to the person liable to pay the penalty.

220AAY Reduction of late payment penalty where judgment debt carries interest

(1) For the purposes of this section, each of the following amounts is a principal amount :

(a) an amount of the kind referred to in subsection 220AAV(1) as the principal amount;

(b) an amount of the kind referred to in paragraph 220AAV(3)(a) as the relevant penalty amount.

(2) This section applies if judgment is given by, or entered in, a court for the payment of:

(a) the whole or a part of a principal amount; or

(b) an amount that includes the whole or a part of a principal amount.

Principal amount still due and payable

(3) A person's liability to a penalty (the interest-based penalty ) under paragraph 220AAV(3)(b) or subsection 220AAV(4) is to be worked out on the basis that the principal amount or the part of the principal amount, as the case may be, does not cease to be due and payable only because of the giving or entering of the judgment.

Reduction of interest-based penalties

(4) If the judgment debt carries interest, the interest-based penalty that would otherwise be payable in relation to the principal amount or the part of the principal amount, as the case may be, is to be reduced by the amount worked out using the formula:

Amount of interest * (Whole or part of principle amount/Amount of judgement debt)

220AAZ Failure to send statements to Commissioner - offence

A person (other than a government body) who contravenes section 220AAG, 220AAO or 220AAT is guilty of an offence punishable on conviction by a fine not exceeding 20 penalty units.

Subdivision F - Recovery of amounts by Commissioner

220AAZA Recovery of amounts by Commissioner

Recoverable amount

(1) In this section:

recoverable amount means any of the following amounts:

(a) an amount payable to the Commissioner under this Division by a person other than the Commonwealth;

(b) the unpaid amount of an estimate under section 222AGA that relates to a liability under this Division;

(d) an amount that is due and payable under an agreement under section 222ALA that relates to:

(i) a liability under this Division; or

(ii) a liability to pay an estimate relating to a liability under this Division;

even if the agreement also relates to a liability that is not of a kind referred to in subparagraph (i) or (ii);

(e) a penalty payable under Subdivision B of Division 9 in relation to a company's liability under this Division;

(f) a penalty payable under Subdivision C of Division 9 in relation to an estimate relating to a company's liability under this Division;

(g) a penalty payable under Subdivision D of Division 9 in relation to a company's liability to pay an amount of the kind mentioned in paragraph (d).

(2) A recoverable amount is a debt due to the Commonwealth.

(3) A recoverable amount is payable to the Commissioner.

(4) A recoverable amount may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his or her official name.

Criminal proceedings - ancillary order for payment

(5) If proceedings for an offence against this Division are brought against the person by whom a recoverable amount is payable, the court before which the proceedings are brought may order the person to pay the amount to the Commissioner.

Averments

(6) The provisions of section 8ZL of the Taxation Administration Act 1953 (which deals with averments) apply in proceedings for the recovery of a recoverable amount in a corresponding way to the way in which they apply in relation to a prosecution for a prescribed taxation offence within the meaning of Part III of that Act.

Evidentiary certificate

(7) In an action for the recovery of a recoverable amount, a written certificate stating that the sum specified in the certificate was, as at the date of the certificate, due by a specified person to the Commonwealth in respect of a recoverable amount is prima facie evidence of the matters stated in the certificate. The certificate must be signed by the Commissioner, a Second Commissioner, a Deputy Commissioner or a delegate of the Commissioner.

Multiple amounts owing

(8) If:

(a) 2 or more recoverable amounts are payable by a person; and

(b) an amount (the eligible payment ) is paid to the Commissioner in respect of one or more of those recoverable amounts; and

the Commissioner may:

(d) apply the eligible payment in partial discharge of the sum of the recoverable amounts payable; and

(e) recover as a debt due to the Commonwealth the amount by which the sum of the recoverable amounts payable exceeds the eligible payment.

The Commissioner may do those things in spite of any direction to the contrary by or on behalf of the person by whom the recoverable amounts are payable or the person making the eligible payment.

Application of Divisions 8 and 9

(9) If the Commissioner applies or recovers an amount under subsection (8), the Commissioner may make a written determination about how the amount is to be taken, for the purposes of Divisions 8 and 9, to have been applied towards discharging any one or more of the recoverable amounts referred to in paragraph (8)(a). A determination has effect accordingly.

(10) In making a statement (whether orally or in writing and whether or not under oath) for a purpose connected with proceedings to recover a recoverable amount from a person (the debtor ), the maker of the statement (who may be the debtor) may, in so far as the statement relates to a question about whether the debtor has a defence, ignore the possibility that a statutory declaration relating to an estimate may be given to the Commissioner, or an affidavit relating to an estimate may be filed, under Subdivision B, C or D of Division 8.

Interpretation

(11) An expression used in paragraphs (1)(b) to (g) has the same meaning as in Division 8.

Subdivision G - Miscellaneous

220AAZB Power of Commissioner to obtain information

Section 264 applies, for the purposes of this Division, as if the reference in paragraph (1)(b) of that section to a person's income or assessment were a reference to a matter relevant to the administration or operation of this Division.

Note: Section 264 empowers the Commissioner to obtain information.

220AAZC Declarations

A form that is approved by the Commissioner for the purposes of this Division may be required to contain a declaration by the person using the form.

220AAZD Application of this Division to partnerships

This Division applies to a partnership as if the partnership were a person, but it applies with the following changes:

(a) obligations that would be imposed on the partnership are imposed instead on each partner, but may be discharged by any of the partners;

(b) the partners are jointly and severally liable to pay an amount that would be payable by the partnership;

(c) any offence against this Division that would otherwise be committed by the partnership is taken to have been committed by each partner who:

(i) aided, abetted, counselled or procured the relevant act or omission; or

(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the partner).

220AAZE Application of this Division to unincorporated companies

(1) This Division applies to an unincorporated company as if the company were a person, but it applies with the following changes:

(a) obligations that would be imposed on the company are imposed instead on each member of the committee of management of the company, but may be discharged by any of those members;

(b) any offence against this Division that would otherwise be committed by the company is taken to have been committed by each member of the committee of management of the company who:

(i) aided, abetted, counselled or procured the relevant act or omission; or

(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the member).

220AAZF Review of decisions

A person who is dissatisfied with any of the following decisions may object against the decision in the manner set out in Part IVC of the Taxation Administration Act 1953:

(a) a refusal to determine under subsection 220AAB(3) that a person is not a large remitter in relation to particular months;

(b) a decision to revoke or vary a determination under subsection 220AAB(3) that a person is not a large remitter in relation to particular months;

(d) a refusal to determine under subsection 220AAJ(3) that a person is not a medium remitter in relation to particular months;

(e) a decision to revoke or vary a determination under subsection 220AAJ(3) that a person is not a medium remitter in relation to particular months;

(f) a determination under subsection 220AAK(1) that a person is a medium remitter in relation to particular months;

(g) a decision referred to in subsection 220AAX(5) (remission of penalties).

220AAZG Interpretation

In this Division:

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

person means any of the following:

(a) a company;

(b) a partnership;

(d) a government body;

(e) any other person.

Note 1: Section 220AAZD sets out additional rules about partnerships.

Note 2: Section 220AAZE sets out additional rules about unincorporated companies.

prescribed payment has the same meaning as in Division 3A.

reportable payment has the same meaning as in Division 1AA.

salary or wages has the same meaning as in Division 2.

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