A New Tax System (Tax Administration) Act 1999 (179 of 1999)

Schedule 1   Pay as you go (PAYG) withholding

Part 1   Amendment of the Taxation Administration Act 1953

1   Section 14-15

Repeal the link note, substitute:

Division 15 - Working out the amount to withhold

Table of Subdivisions

Guide to Division 15

15-A Working out how much to withhold

15-B Withholding schedules and regulations

15-C Declarations

Guide to Division 15

15-1 What this Division is about

This Division is mainly about how to work out how much an entity must withhold under Division 12.

In most cases, the entity will need to use either the Commissioner's withholding schedules or the regulations.

The entity will also need to take into account a TFN declaration or declaration under section 15-50 it has been given because, under the schedules and regulations, the declaration may affect how to calculate the amount to withhold.

This Division also deals with when an individual can make such a declaration (other than a TFN declaration) so as to change the amount that must be withheld from payments to the individual.

Subdivision 15-A - Working out how much to withhold

Table of sections

15-10 How much to withhold

15-15 Variation of amounts required to be withheld

15-10 How much to withhold

(1) The amount that Subdivision 12-B, 12-C or 12-D requires to be withheld from a payment is to be worked out under the withholding schedules made under section 15-25. However, if the regulations prescribe how the amount is to be worked out, then it is to be worked out under the regulations.

Note 1: A TFN declaration, declaration under section 15-50 or voluntary agreement may affect how much is required to be withheld under the withholding schedules or regulations.

Note 2: The Commissioner may vary an amount required to be withheld. See section 15-15.

(2) The amount that Subdivision 12-E, 12-F or 12-G (except one covered by section 12-325) requires to be withheld from a payment is to be worked out under the regulations.

Note 1: The amount that section 12-325 requires to be withheld is worked out under that section.

Note 2: The Commissioner may vary an amount required to be withheld. See section 15-15.

15-15 Variation of amounts required to be withheld

(1) The Commissioner may, for the purposes of meeting the special circumstances of a particular case or class of cases, vary the *amount required to be withheld by an entity from a *withholding payment (except a withholding payment covered by section 12-140 or 12-145). If the Commissioner does so, the amount is varied accordingly.

Note: Section 12-140 is about a payment arising from an investment where the recipient does not quote its tax file number (or, in some cases, its ABN). Section 12-145 is about an investor becoming presently entitled to income of a unit trust.

(2) The Commissioner's power to vary an amount includes the power to reduce the amount to nil.

(3) A variation must be made by a written notice:

(a) if it applies to a particular entity - that is given to that entity; or

(b) if it applies to a class of entities - that is given to each of the entities, or a copy of which is published in the Gazette.

Subdivision 15-B - Withholding schedules and regulations

Table of sections

15-25 Commissioner's power to make withholding schedules

15-30 Matters to be considered when making withholding schedules

15-35 Regulations about withholding

15-25 Commissioner's power to make withholding schedules

(1) For the purposes of collecting income tax and the other liabilities referred to in paragraphs 11-1(b) and (c), the Commissioner may make one or more withholding schedules specifying the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity from a *withholding payment covered by Subdivision 12-B, 12-C or 12-D.

(2) A withholding schedule may deal differently with:

(a) different payments; and

(b) different circumstances of the recipients of those payments; and

(c) different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

(3) The Commissioner may withdraw a withholding schedule.

(4) A withholding schedule, or the withdrawal of a withholding schedule:

(a) only applies if a notice of it is published in the Gazette; and

(b) only applies in relation to payments made after the day the notice is published, or after such later day as is specified by the Commissioner in the notice.

(5) The Commissioner must make each withholding schedule publicly available.

15-30 Matters to be considered when making withholding schedules

The Commissioner must have regard to the following matters when making a withholding schedule:

(a) the rates of income tax as specified in the Income Tax Rates Act 1986;

(b) the rates of Medicare levy as specified in the Medicare Levy Act 1986;

(c) the rates specified in section 106Q (about repayments of accumulated HEC debts) of the Higher Education Funding Act 1988;

(d) any prescribed *tax offsets;

(e) the family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999);

(f) the periods in respect of which *withholding payments are made;

(g) any other prescribed matter.

15-35 Regulations about withholding

(1) For the purposes of collecting income tax and the other liabilities referred to in section 11-1, the regulations may specify the amounts, formulas and procedures to be used for working out the *amount required to be withheld by an entity from a *withholding payment covered by Division 12 (except one covered by section 12-325).

(2) The regulations may deal differently with:

(a) different payments; and

(b) different circumstances of the recipients of those payments; and

(c) different periods in respect of which those payments are made.

This subsection does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

Subdivision 15-C - Declarations

Table of sections

15-50 Declarations

15-50 Declarations

Declarations about prescribed matters

(1) An individual who:

(a) expects to receive a *withholding payment covered by Subdivision 12-B, 12-C or 12-D from an entity; and

(b) wishes to have a prescribed matter relating to the individual's income tax or other liability referred to in paragraph 11-1(b) or (c) taken into account by the entity in working out the *amount required to be withheld from the payment;

may give the entity a declaration about the matter in the *approved form.

When declarations under subsection (1) can't be given

(2) The individual cannot give a declaration under subsection (1) unless:

(a) a *TFN declaration is in effect between the individual and the entity, or a *voluntary agreement covers the payment; and

(b) if the individual has given another entity a declaration on a prescribed matter - that declaration is not in effect.

Declarations changing information given in TFN declaration

(3) If:

(a) an individual has given a *TFN declaration to an entity; and

(b) the individual made a statement about a prescribed matter in the TFN declaration; and

(c) the individual's circumstances change in relation to the matter;

the individual may give the entity a declaration about the matter in the *approved form.

Regulations

(4) The regulations may prescribe:

(a) the matters about which a declaration under subsection (1) or (3) may be given; and

(b) when a declaration under subsection (1) or (3) starts or ceases to be in effect; and

(c) when a declaration under subsection (1) or (3) is taken to have been given.

(5) If:

(a) an individual gives an entity a declaration under subsection (1) or (3) about a matter; and

(b) the individual's circumstances change in relation to the matter;

the regulations may also prescribe when the individual must give the entity a new declaration about the matter.