What is foreign resident pay as you go withholding?
Employers and payers are required to withhold prescribed amounts from specific payments made to foreign resident payees.
Foreign resident payees include all foreign individual and non-individual entities (for example, companies, partnerships, trusts, government organisations and superannuation funds).
The payments are prescribed in Taxation Administration Amendment Regulations 2004 (no. 1), and include payments for:
- entertainment or sports activities
- construction and related activities, and
- casino gaming junket activities.
Entertainment or sports activities
The foreign resident withholding arrangement applies to both individuals and groups in the entertainment and sporting industries. Entertainment or sports activities include the activities of a performing artist or sportsperson.
Entertainment activities include the activities of a performing artist using intellectual, artistic, musical, physical or other personal skills by performing or presenting for an audience. Examples include, but are not limited to:
- giving a musical performance
- performing in a play
- giving an address
- involvement in a display.
Sports activities include, but are not limited to:
- team sports where team members are not employees (for example, cricket, rugby league, rugby union, soccer or netball)
- individual sports (for example, golf, tennis, surfing)
- other activities (for example, motor racing, cycling or horse racing).
It may also apply to individuals who provide services through their own corporate identity.
Foreign residents who provide support in the above industries may also be subject to foreign resident PAYG withholding. Examples include but are not limited to:
Construction or related activities
Construction and related activities include activities associated with the constructions, installation and upgrading of buildings, plant and fixtures.
Examples of constructions and related activities include, but are not limited to:
- commissioning and operation of facilities
- supervision and provision of personnel
- supply of plant and equipment.
Works include the construction, installation and upgrading of building, plant and fixtures.
Examples of construction works include, but are not limited to:
- mine site development
- natural resource infrastructure
- pipeline works
- railway or road works
- residential building
- resort development.
Casino gaming junket activities
The foreign resident withholding arrangement applies to payments for activities related to casino gaming junkets.
Activities conducted may include, but are not limited to:
- contracting with casinos
- contracting with players
- providing customer liaison services (for example, translating or interpreting)
- payments include cash and non-cash benefits.
Examples include, but are not limited to:
- monetary payments
- food and beverage.