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.
A trustee of a trust that is a *withholding MIT in relation to an income year that makes a *fund payment in relation to that income year to an entity covered by section 12-410 must withhold an amount from the payment.
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.
If the payment is made to a recipient not covered by section 12-410 , the trustee 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 .
The amount the trustee must withhold is:
|*Fund payment × Rate applicable under subsection (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%.
An information exchange country is a foreign country or foreign territory specified in the regulations for the purposes of this section. 12-385(5)
This section does not apply to an amount paid by a *withholding MIT to the extent that no *managed investment trust withholding tax is payable in respect of the payment or an amount reasonably attributable to the payment.