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 14 - Benefits, gains and taxable supplies for which amounts must be paid to the Commissioner  

Subdivision 14-D - Capital proceeds involving foreign residents and taxable Australian property  

SECTION 14-205   EFFECT OF LOOK-THROUGH EARNOUT RIGHTS  

Acquisitions of taxable Australian property from foreign residents

14-205(1)  
You must pay to the Commissioner an amount if:


(a) you are required under section 14-200 to pay an amount to the Commissioner in relation to your *acquisition of a *CGT asset; and


(b) under a *look-through earnout right relating to the CGT asset and the acquisition, you provide a *financial benefit to one or more entities; and


(c) subsection 14-210(1) (about foreign residents) would apply to at least one of those entities at the time you provide the financial benefit if section 14-210 were modified as described in subsection (2) of this section; and


(d) an amount is not already required to be withheld from a *withholding payment relating to the financial benefit.

Note 1:

To work out the amount payable, see subsection (4).

Note 2:

You must pay the amount on account of income tax possibly payable by the entities on their increased capital proceeds from receiving the financial benefit.

Modifications of the relevant foreign residents test

14-205(2)  
The modifications of section 14-210 are as follows:


Modifications to section 14-210 for the purposes of this section
Column 1 Column 2
Item For a reference in that section to: substitute a reference to:
1 transaction is entered into *financial benefit is provided
2 transaction (other than a reference covered by item 1) *financial benefit
3 14-200 14-205

When you must pay the amount

14-205(3)  
You must pay the amount to the Commissioner on or before the day you provide the *financial benefit.

Note:

There are penalties for failing to pay the amount (see Division 16 ).

14-205(4)  
The amount to be paid to the Commissioner is:


(a) unless paragraph (b) applies - an amount equal to 12.5% of the *market value of the *financial benefit; or


(b) the varied amount applying under section 14-235 .




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