Taxation Determination

TD 93/50

Income tax: do amounts withheld from payments for work and services constitute 'an amount of relevant tax ... paid by a person' for the purposes of subsection 9(1) of the Taxation (Interest on Overpayments and Early Payments) Act 1983 ?

Please note that the PDF version is the authorised version of this ruling.

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FOI status:

may be releasedFOI number: I 1214485

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]

1. Yes. Where an amount withheld from payments for work and services under Subdivision 12 B of Schedule 1 to the Taxation Administration Act 1953 (TAA) exceeds the tax liability assessed for the year of income, subsection 18-15(1) of Schedule 1 to the TAA requires the excess amounts withheld to be credited against any other tax payable by the employee.

2. Subsection 9(4) of the Taxation (Interest on Overpayments and Early Payments) Act 1983 (TIOEPA) operates so that when amounts withheld by an employer (and which have been remitted to the Commissioner) are credited against the tax liability of an employee, the employee is deemed to have paid the tax to the extent of the amount so credited. The provision operates generally where an amount paid by one person has been applied against the tax liability of another person.

3. The crediting or absorption of the amounts withheld against tax outstanding is 'an amount of relevant tax ... paid by a person' for the purposes of subsection 9(1) of the TIOEPA. The employee is deemed to have paid that amount on the day on which the amount is applied against the employee's tax liability, usually the date of the relevant assessment.

Example:

A taxpayer lodges an objection against his/her 2000/01 tax assessment of $1,000. The assessment is not paid. On 31 July 2002, the taxpayer's 2001/02 assessment issues with excess amounts withheld of $400 over the tax assessed for the year. The excess amounts withheld are applied against the tax outstanding. The taxpayer's objection to the 2000/01 assessment is allowed and the $400 previously withheld in respect of the 2001/02 assessment is then refunded. The taxpayer is deemed to have paid $400 to the Commissioner on 31 July 2002 towards the outstanding 2000/01 tax for the purposes of calculating interest on overpayments.

Commissioner of Taxation
25/3/93

Previously issued as Draft TD 93/D11

References

ATO references:
NO Cas 0050

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 92/150
IT 2069
IT 2295
IT 2381

Subject References:
interest on overpayments
overpaid tax
tax refunds
taxation objections and appeals

Legislative References:
TIOEP Act 1983 9(1)
TIOEP Act 1983 9(4)
TAA 1953 Sch 1 Subdiv 12-B
TAA 1953 Sch 1 18-15(1)

TD 93/50 history

	Date:	Version:	Change:
	25 March 1993	Original ruling
You are here	29 November 2006	Consolidated ruling

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