TAXATION ADMINISTRATION ACT 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-5 - PAY AS YOU GO (PAYG) WITHHOLDING  

Division 12 - Payments from which amounts must be withheld  

Subdivision 12-H - Distributions of withholding MIT income  

Operative provisions

SECTION 12-390   WITHHOLDING BY CUSTODIANS AND OTHER ENTITIES  

Withholding by custodians

12-390(1)  
A *custodian must withhold an amount from a payment (the later payment ) it makes if:


(a) all or some of the later payment (the covered part ) is reasonably attributable to the part of an earlier payment received by the custodian that was covered by a notice or information under section 12-395 ; and


(b) the later payment is made to an entity covered by section 12-410 .

Note 1:

The covered part referred to in paragraph (1)(a) is attributable to a fund payment made by a withholding MIT, or 2 or more fund payments made by one or more withholding MITs. One or more of those withholding MITs may be AMITs.

Note 2:

An entity may be covered by section 12-410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia.

Note 3:

If the payment is made to a recipient not covered by section 12-410 , the custodian is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12-395 .

12-390(2)  
The amount the *custodian must withhold is:


Covered part × Rate applicable under subsection (3)

12-390(3)  
The rate is:


(a) if the address or place for payment of the recipient is in an *information exchange country:


(i) 15% for *fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or

(ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or

(iii) 30% for fund payments, to the extent that they are attributable to *non-concessional MIT income (see section 12-435 ); or


(b) otherwise - 30%.

Withholding by other entities

12-390(4)  


An entity that is not a *withholding MIT or a *custodian must withhold an amount from a payment it receives if:


(a) the payment or part of it (the covered part ) was covered by a notice or information under section 12-395 ; and


(b) a foreign resident (the recipient ) is or becomes entitled:


(i) to receive from the entity; or

(ii) to have the entity credit to the recipient, or otherwise deal with on the recipient ' s behalf or as the recipient directs;
an amount (the attributable amount ) reasonably attributable to the covered part.
Note 1:

The covered part referred to in paragraph (4)(a) is attributable to a fund payment made by a managed investment trust, or 2 or more fund payments made by one or more managed investment trusts. One or more of those managed investment trusts may be AMITs.

Note 2:

If the recipient is not a foreign resident, the entity is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12-395 .

12-390(5)  
The amount the entity must withhold is:


Attributable amount × Rate applicable under subsection (6)

12-390(6)  
The rate is:


(a) if the recipient is a resident of an *information exchange country:


(i) 15% for *fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or

(ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or

(iii) 30% for fund payments, to the extent that they are attributable to *non-concessional MIT income (see section 12-435 ); or


(b) otherwise - 30%.

12-390(7)  
An entity is a resident of an *information exchange country if:


(a) the entity is a resident of that country for the purposes of the taxation laws of that country; or


(b) if there are no taxation laws of that country applicable to the entity or the entity ' s residency status cannot be determined under those laws:


(i) for an individual - the individual is ordinarily resident in that country; or

(ii) for another entity - the entity is incorporated or formed in that country and is carrying on a business in that country.

12-390(8)  
An amount required to be withheld under subsection (4) must be withheld:


(a) if the recipient is so entitled when the entity receives the payment - immediately after receipt; or


(b) if the recipient becomes so entitled at a later time - immediately after the later time. Meaning of custodian

12-390(9)  


An entity is a custodian if:


(a) the entity is *carrying on a *business that consists predominantly of providing a custodial or depository service (as defined by section 766E of the Corporations Act 2001 ) pursuant to an *Australian financial services licence; or


(b) the entity is acting on behalf of an entity that is carrying on such a business pursuant to such a licence.

Exceptions

12-390(10)  
This section does not apply:


(a) to a company unless the company would, apart from section 12-420 , be acting in the capacity as *agent for the recipient; or


(b) to an amount paid or received by an entity to the extent that no *managed investment trust withholding tax is payable in respect of the amount or an amount reasonably attributable to the amount.




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