INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 3B - Collection of tax in respect of certain payments  

Subdivision B - Deductions from certain payments  

SECTION 221YHZC   DUTIES OF PAYERS  

221YHZC(1)   [Offence]  

Where a person who is liable to make a natural resource payment to a non-resident:


(a) ascertains under subsection 221YHZB(1) the amount required to be deducted from a payment to the non-resident; or


(b) is required, as a condition of a certificate issued to the person under subsection 221YHZB(4) , to deduct an amount from a payment to the non-resident:

the person shall, at the time of making the payment, deduct from the payment the amount required to be deducted.

Penalty: $1,000.

Note:

For an alternative sanction for failing to deduct the amount required to be deducted, see subsection (3).

221YHZC(1AAAA)   [Payments made after 30 June 2000]  

Subsection (1A) does not apply to a payment made after 30 June 2000.

Note:

Instead, the investment body must withhold an amount under section 12-140 or 12-145 in Schedule 1 to the Taxation Administration Act 1953 .

221YHZC(1A)   [Duties of investment body]  

Subject to subsections (1B) and (1E), where after the end of the phasing-in period mentioned in section 202DA :


(a) the investment body in relation to a Part VA investment is liable to pay income, in respect of the investment;


(b) the income is unattributed income in respect of the investment; and


(c) the amount of the income is not less than:


(i) if each investor in relation to the investment (not being an investment of a kind mentioned in item 6 in the table in subsection 202D(1) ) was, on the 1 January preceding the payment, less than 16 years of age and the investment body is aware of the age of the investor - the amount ascertained in accordance with regulations made for the purposes of this subparagraph;

(ii) if:

(A) subparagraph (i) does not apply; and

(B) (Omitted by No 57 of 1990)

(C) the investment is an investment of the kind mentioned in item 1 or 2 in the table in subsection 202D(1) ;
the amount ascertained in accordance with the regulations for the purposes of this subparagraph; or

(iii) in any other case - the amount ascertained in accordance with regulations made for the purposes of this subparagraph;

the investment body shall:


(d) when paying the income, deduct an amount ascertained in accordance with subsection (1C) or (1D);


(e) at the time of notifying the investor of the payment of the income, and in any event within 21 days after the investor requests notice of any amount deducted from income so paid, give to the investor written notice of the amount deducted from the income so paid; and


(f) within 4 months after the end of each financial year or such longer period as the Commissioner allows, give to the Commissioner a statement in a form approved by the Commissioner, signed by the investment body, making the reconciliation required by subsection (1AA) and stating the total amount of refunds made by the investment body under subsection 221YHZDA(1) or paragraph 221YHZDAC(1)(d) in respect of deductions made in error during the financial year.

Penalty: $1,000.

Note 1:

For an alternative sanction for failing to deduct the amount required to be deducted, see subsection (3).

Note 2:

Subsection (1AAA) provides an alternative liability for failing to give the statement under paragraph (f) to the Commissioner.

221YHZC(1AAA)   [Liability to late reconciliation statement penalty]  

If the investment body in relation to a Part VA investment fails to give the Commissioner a statement under paragraph (1A)(f) by the time by which it must be given to the Commissioner, the investment body is liable to pay the late reconciliation statement penalty.

Note:

The late reconciliation statement penalty is worked out under Division 3 of Part IIA of the Taxation Administration Act 1953 .

221YHZC(1AA)   [Amounts to be reconciled]  

For the purposes of paragraph (1A)(f):


(a) the total of the amounts of all deductions made by the investment body during the financial year from unattributed income in respect of Part VA investments;

is to be reconciled with:


(b) the sum of:


(i) all amounts paid to the Commissioner under subsection 221YHZD(1A) in respect of those deductions; and

(ii) all amounts recorded under paragraph 221YHZD(1AB)(c) as being offset against amounts to be paid to the Commissioner in respect of those deductions.

221YHZC(1B)   [When subsec (1A) does not apply]  

Subsection (1A) does not apply in relation to income paid in respect of a share investment if the income is paid as a dividend that has been franked in accordance with section 160AQF or 160AQFA and:


(a) the franking percentage (within the meaning of section 160APA ), if any, in relation to the dividend is 100%; and


(b) if the dividend is an exempted dividend - the sum of the exempted amount and the franked amount (if any) is equal to the amount of the dividend.

221YHZC(1C)   [Amount of deduction]  

Subject to subsection (1D), the amount to be deducted, in accordance with paragraph (1A)(d), from unattributed income in respect of a Part VA investment is the amount (being a multiple of 5 cents) that is, or is nearest to, the amount ascertained by multiplying the number of whole dollars in the amount of unattributed income by the factor prescribed for the purposes of this subsection.

221YHZC(1D)   [Calculating para (1A)(d) deduction amount]  

If:


(a) unattributed income is to be paid, in respect of a share investment, as a dividend that has been franked in accordance with section 160AQF or 160AQFA ; and


(b) the percentage to which the dividend has been franked in accordance with section 160AQF or 160AQFA is less than 100%;

the amount to be deducted, in accordance with paragraph (1A)(d) of this section, from the unattributed income is the amount (being a multiple of 5 cents) that is, or is nearest to, the amount worked out by using the formula:

(Unattributed income - (Franked amount + Exempted amount)) × Factor

where:

exempted amount
means the exempted amount in relation to the dividend.

factor
means the factor prescribed for the purposes of subsection (1C).

franked amount
means the franked amount (within the meaning of section 160APA ) in relation to the dividend.

unattributed income
means the amount of unattributed income.

221YHZC(1E)   [Income not paid in money]  

Subsection (1A) does not apply in relation to income that is not paid in money.

221YHZC(2)   [Court may order payment]  

Where a person (in this subsection referred to as the ``convicted person'' ) is convicted before a court of an offence against subsection (1) or (1A) in relation to the refusal or failure of the convicted person or any other person to deduct an amount from a payment, the court may, in addition to imposing a penalty on the convicted person for the offence, order the convicted person to pay to the Commissioner an amount not exceeding the amount required to be deducted.

221YHZC(3)   [Liability to penalty]  

If a person, other than a government body, making a payment to a non-resident or an investor does not deduct from the payment the amount required to be deducted under subsection (1) or (1A), the person is liable to pay to the Commissioner an amount, by way of penalty, equal to the amount not deducted.

221YHZC(4)   [Time for payment]  

The person must pay the penalty amount by the time by which, if the person had deducted the amount required to be deducted, the person would have been required to pay that amount to the Commissioner.

221YHZC(5)   [Liability to general interest charge]  

If any of the penalty amount remains unpaid after the time by which it is due to be paid, the person is liable to pay the general interest charge on the unpaid penalty amount for each day in the period that:


(a) started at the beginning of the day by which the penalty amount was due to be paid; and


(b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:


(i) the penalty amount;

(ii) general interest charge on any of the penalty amount.
Note:

The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

221YHZC(6)   Government bodies.  

If a government body making a payment to a non-resident or an investor does not deduct from the payment the amount required to be deducted under this Division, the government body is liable to pay the general interest charge on the amount not deducted for each day in the period that:


(a) started at the beginning of the day by which, if the government body had deducted the amount, the government body would have been required to pay that amount to the Commissioner; and


(b) finishes at the end of 30 June in the financial year in which that day occurred.

Note:

The general interest charge does not apply to the Commonwealth or authorities of the Commonwealth: see subsection 8AAB(3) of the Taxation Administration Act 1953 .


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