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.
An entity (the intermediary ) that receives a payment meeting the requirements set out in paragraphs 12-315(1)(b) and (c) must withhold an amount from the payment if:
(a) the intermediary is a person in Australia or an *Australian government agency; and
(b) another entity (the likely foreign recipient ) is or becomes entitled:
(i) to receive the payment or part of it from the intermediary, or to receive the amount of the payment or of part of it from the intermediary; or
(ii) to have the intermediary credit to the likely foreign recipient, or otherwise deal with on the likely foreign recipient ' s behalf or as the likely foreign recipient directs, the payment or part of it, or the amount of the payment or of part of it; and
(c) the likely foreign recipient is covered by subsection (3); and
(d) the likely foreign recipient is not covered by an exemption in force under subsection 12-319(1) . 12-317(2)
The intermediary must withhold the amount:
(a) if the likely foreign recipient is so entitled when the intermediary receives the payment - just after the intermediary receives the payment; or
(b) if the likely foreign recipient becomes so entitled after the intermediary receives the payment - just after the likely foreign recipient becomes so entitled. 12-317(3)
The likely foreign recipient is covered by this subsection if any of the following conditions is satisfied:
(a) the likely foreign recipient is a foreign resident;
(b) the intermediary believes, or has reasonable grounds to believe, that the likely foreign recipient is a foreign resident;
(c) the intermediary has no reasonable grounds to believe that the likely foreign recipient is an Australian resident, and either:
(i) the likely foreign recipient has an address outside Australia (according to any record that is in the intermediary ' s possession, or is kept or maintained on the intermediary ' s behalf); or
(ii) the intermediary is authorised to forward the payment to a place outside Australia (whether to the likely foreign recipient or to anyone else);
(d) the likely foreign recipient has a connection outside Australia of a kind set out in the regulations.