STP 2021/D1 - Explanatory statement


Taxation Administration Act 1953

Draft Explanatory Statement

General outline of instrument

1. This instrument is made under subsection 389-10(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA).

2. This instrument exempts certain entities that do not have an Australian business number (ABN) but instead have a withholding payer number (WPN) from reporting under Single Touch Payroll (STP) for the 2021-22 financial year.

3. The instrument is a legislative instrument for the purposes of the Legislation Act 2003.

4. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Date of effect

5. This instrument commences on 1 July 2021.

6. The instrument applies retrospectively to ensure that taxpayers are not disadvantaged by not having the exemption provided by this instrument apply from the beginning of the financial year.

7. Under section 12(2) of the Legislation Act 2003 this instrument does not adversely affect the rights or liabilities of any person other than the Commonwealth.

What is the effect of this instrument

8. The effect of this instrument is to extend the existing class exemption for relevant entities, provided by the Taxation Administration - Single Touch Payroll - Exemption for Employers with a Withholding Payer Number (F2019L00437) and Taxation Administration - Single Touch Payroll - 2020-21 year Withholding Payer Number Exemption 2020 (F2020L00801) legislative instruments for an additional financial year.

9. This instrument provides an exemption to any entity that:

(a)
pays an amount referred to in Column 1 of the table in subsection 389-5(1) of Schedule 1 to the TAA
(b)
does not have an ABN, and
(c)
has been assigned by the Australian Taxation Office a WPN for the purposes of pay as you go withholding.

10. Entities within this class will be fully exempt from the requirement to report under section 389-5 of Schedule 1 to the TAA for the 2021-22 financial year.

11. As a result, the relevant entities will be exempt from section 389-5 of Schedule 1 to the TAA for the 2018-19, 2019-20, 2020-21 and 2021-22 financial years.

12. Any entity covered by this exemption may still choose to report under STP in accordance with Division 389 of Schedule 1 to the TAA notwithstanding the exemption provided by this instrument.

Compliance cost assessment

13. To be determined.

Background

14. Division 389 of Schedule 1 to the TAA establishes STP reporting. Section 389-5 of Schedule 1 to the TAA provides for the reporting of certain amounts by employers to the Commissioner.

15. Subsection 389-10(1) of Schedule 1 to the TAA allows the Commissioner of Taxation to exempt by way of legislative instrument a class of entities from reporting under STP.

16. Subsection 389-5(5) of Schedule 1 to the TAA provides that section 389-5 does not apply to any entity to the extent (if any) that the entity is covered by an exemption under section 389-10 for the year in which the entity's conduct occurs.

Consultation

17. Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the Commissioner is satisfied that appropriate and reasonably practicable consultation has been undertaken.

18. As part of the consultation process, you are invited to comment on the draft determination and its accompanying draft explanatory statement.

Please forward your comments to the contact officer by the due date.

Due date: 8 July 2021
Contact officer: Haydon Green
Email: haydon.green@ato.gov.au
Phone: (03) 8601 9247

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Taxation Administration - Single Touch Payroll - 2021-22 year Withholding Payer Number Exemption 2021

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Commissioner will afford an exemption to entities that have a withholding payer number (WPN) from reporting under Single Touch Payroll (STP) for the 2021-22 financial year.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms because it is of a minor or machinery nature as it provides certain entities with an exemption from a reporting requirement for the 2021-22 financial year.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.



Draft published 10 June 2021

Louise Clarke
Deputy Commissioner of Taxation
Policy, Analysis and Legislation
Law Design and Practice

Legislative References:
Acts Interpretation Act 1901
The Act

Human Rights (Parliamentary Scrutiny) Act 2011
The Act

Legislation Act 2003
The Act

Taxation Administration Act 1953
The Act

Related Legislative Determinations:
STP 2021/D1