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  • When should I withhold tax?

    You are required to withhold amounts when making payments to foreign residents for construction and related activities. Withholding is required from all payments, including payments to subcontractors.

    Works include the construction, installation and upgrading of buildings, plants and fixtures. Examples of construction works include, but are not limited to:

    • dams
    • electricity links
    • mine site development
    • natural gas field development
    • natural resource infrastructure
    • oilfield development
    • pipeline works
    • power generation infrastructure
    • railway or road works
    • residential building
    • resort development
    • retail or commercial development
    • road and rail developments
    • airport upgrades
    • telecommunications equipment upgrades
    • water treatment plant works.

    Related activities

    Related activities such as commissioning of infrastructure, training and support of personnel to operate infrastructure and supervision during the initial phase of operation are also included.

    Other related activities include activities associated with the construction, installation and upgrading of buildings, plant and fixtures.

    Examples include, but are not limited to:

    • administration
    • assembly
    • decommissioning plant
    • commissioning and operation of facilities
    • costing
    • engineering
    • erection
    • fabrication
    • hook up
    • installation
    • project management
    • site management
    • supervision and provision of personnel
    • supply of plant and equipment
    • warranty repairs.

    Making payments to an agent

    In some circumstances you may have to make payments to an agent on behalf of a foreign resident.

    You should withhold from payments made to an agent as though the payment were made directly to the foreign resident. This is the case even if the agent is a resident in Australia.

    If an Australian resident agent receives a payment subject to foreign resident withholding on behalf of an overseas resident and an amount has not already been withheld from that payment, the agent must withhold from the payment.

      Last modified: 03 Mar 2020QC 17606