Large Business Bulletin: April 2012

New TOFA method for calculating PAYG instalment income

There is a new method for taxation of financial arrangements (TOFA) taxpayers to calculate their pay as you go (PAYG) instalment income.

For most TOFA taxpayers the new method will start to apply when you calculate your PAYG instalment income in the first instalment quarter of your 2013 income year. However, this may differ depending on your balance date and type of entity.

For example, TOFA taxpayers with a 30 June balance date will apply the new method when they calculate their PAYG instalment income in the first instalment quarter of the 2013 income year. TOFA taxpayers with a 31 December balance date will apply the new method when they calculate their PAYG instalment income in the first instalment quarter of the 2014 income year.

Partners in a partnership and beneficiaries of a trust, where the relevant partnership or trust is a TOFA entity, will begin using the new method for calculating their proportion of the partnership's or trust's instalment income in instalment quarters which start after 29 November 2011 (when the new rules were enacted), where the last completed income year of the partnership or trust was:

• an income year which started on or after 1 July 2010
• an income year where the TOFA rules applied to the partnership's or trust's financial arrangements.

For more information, go to www.ato.gov.au/tofa and access PAYG instalments for TOFA entities.

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• An easier way to get in touch
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• Large Business and International, Indirect Tax and Tax Counsel Network organisational charts
• New TOFA method for calculating PAYG instalment income
• AUSkey update