• Natural resource payments

    A natural resource payment is made to a foreign resident and is based wholly or partly on the value or quantity of a natural resource produced or recovered in Australia.

    We can provide you with tailored technical assistance if you are not sure whether a payment is a natural resource payment or if there is an obligation to withhold an amount from the payment.

    Example 1

    A Malaysian geologist discovers an ore deposit in Western Australia and is then paid by a mining company $5 for every tonne produced from that ore deposit. The amount paid by the mining company is a natural resource payment.

    End of example

    Find out about:

    See also:

    Rate of withholding

    You must withhold an amount from a natural resource payment unless you are notified otherwise by us.

    Before making a natural resource payment, you must ask us what amount you should withhold. When writing to us, include the following information:

    • your name as the payer
    • all payee names
    • each payee's country of residence
    • the amount of the natural resource payments expected to be made annually.

    Generally, we will provide a certificate advising the withholding rate that must be applied to all payments.

    Send all requests to:

    • Australian Taxation Office
      Locked Bag 50
      PENRITH  NSW  2740

    We will notify you of any changes to the withholding rate.

    Reporting and paying

    Once you have commenced withholding from a natural resource payment, you will need to pay those amounts to us and report the payment and withholding amounts to both us and the payee.

    See also:

    Annual obligations

    At the end of the financial year, you must:

    • provide a payment summary to each of your payees
    • lodge a payment summary annual report.

    Payment summary

    Any 'free format' payment summary, receipt or remittance advice is acceptable but must include all of the following information:

    • the title 'PAYG withholding from natural resource payments to foreign residents – payment summary'
    • period covered – for example, 'Payment summary for the period 01/07/2016 – 30/06/2017'
    • your business name (as it appears on your activity statement) and Australian business number (ABN)
    • the name, overseas address, Australian tax file number (TFN) and ABN of your payee – if known
    • the total gross amount paid and total amount withheld (in whole Australian dollars)
    • the wording 'To be retained by the payee for tax purposes'
    • the name of your contact person and their phone contact details
    • the name of your authorised signing officer
    • the wording 'For information about your privacy, go to ato.gov.au/privacy'

    If you know the payee's TFN, you must also include the following statement:

    The Taxation Administration Act 1953 authorises your payer to ask you to provide your tax file number (TFN). While it is not compulsory to provide your TFN to your payer, they may have withheld at a higher rate if you did not. We will use your TFN to identify you in our records.

    You should send copies of these payment summaries to us.

    Annual report

    Your annual report must be lodged with us by 31 October each year and be in the format of a letter containing the following information:

    • the title 'PAYG withholding annual report – natural resource payments to foreign residents'
    • the financial year
    • your business name and ABN
    • the total gross payments made and total amounts withheld for all your foreign resident payees (in whole Australian dollars)
    • the name, overseas address, Australian TFN and ABN of each payee – if known
    • the total gross amount paid and total amount withheld (in whole Australian dollars) for each payee
    • the name of your contact person and their phone contact details
    • the name of your authorised signing officer
    • the wording 'For information about your privacy, go to ato.gov.au/privacy'

    Send your annual report to:

    • Australian Taxation Office
      Locked Bag 50
      PENRITH  NSW  2740
      Last modified: 05 Apr 2017QC 37343