Taxation Administration Act 1953
Note: See section 3AA .Chapter 2 - Collection, recovery and administration of income tax
Note: A Commissioner ' s Remedial Power modification is relevant to this part of the tax law.
Taxation Administration (Remedial Power - Seasonal Labour Mobility Program) Determination 2020 (F2020L01474) modifies the operation of s 840-905(b)(ii) of the Income Tax Assessment Act 1997 (ITAA 1997) and s 12-319A(b)(ii) of Sch 1 to the Taxation Administration Act 1953 (TAA 1953) to include foreign resident employees of Approved Employers under the Seasonal Labour Mobility Program ( " employees under the Program " ) who previously held a Temporary Work (International Relations) Visa (subclass 403) and have extended their stay in Australia using a different temporary visa (including a bridging visa) granted under the Migration Act 1958 .
The operation of the relevant provisions is modified as follows:
The modification applies to salary, wages, commissions, bonuses or allowances paid on and after 24 March 2020. The modification ensures that employees under the Program continue to be taxed by application of a final withholding tax rate of 15%. It also ensures that this income is otherwise treated as non-assessable non-exempt income. As is currently the case for those holding a Temporary Work (International Relations) Visa (subclass 403), these employees under the Program will not have to lodge an income tax return unless they earn other Australian sourced income.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to TAA 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
This section applies if:
(a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time ) during an income year of the trust; and
(b) some or all of the distribution is from the *ordinary income or *statutory income of the trust; and
(c) the trust is:
(i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936 ) in relation to the income year; and
(ii) a closely held trust (within the meaning of section 102UC of that Act); and
(iii) not prescribed by the regulations for the purposes of this subparagraph; and
(d) the beneficiary is:
(i) an Australian resident; and
(ii) not an *exempt entity; and
(iii) not under a legal disability for the purposes of section 98 of that Act.
The trustee must withhold an amount from the distribution, if:
(a) the beneficiary did not *quote the beneficiary ' s *tax file number to the trustee before the distribution time; and
(b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and
(c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non-disclosure tax) in connection with the distribution; and
(d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.
The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16-25 .Application of rest of Part 12-175(3)
If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time. Trust income of earlier income years 12-175(4)
Subsections (2) and (3) do not apply to the distribution, to the extent that:
(a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of an earlier income year; and
(b) the distribution is a distribution of some or all of that share.
The trustee may have been required to withhold from that share under section 12-180 .