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 asset entity in relation to an income year is a trust or partnership that is not covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year. 12-436(2)
An operating entity in relation to an income year is a trust, partnership or company that is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year. 12-436(3)
For the purposes of this section, in determining whether a partnership or company is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 , treat the partnership or company as a trust. 12-436(4)
A cross staple arrangement is an *arrangement that is entered into by 2 or more entities (the arrangement entities ) if:
(a) at least one of the arrangement entities is an *asset entity; and
(b) at least one of the arrangement entities is an *operating entity; and
(c) the following conditions are satisfied:
(i) one or more other entities (the external entities ) each hold a *total participation interest in each arrangement entity;
(ii) the sum of the total participation interests held by the external entities in each arrangement entity is 80% or more.
For the purposes of subparagraph (4)(c)(ii), in working out the sum of the *total participation interests held by the external entities in each arrangement entity, take into account:
(a) a particular *direct participation interest; or
(b) a particular *indirect participation interest;
held in the arrangement entity only once if it would otherwise be counted more than once.12-436(6)
Subsection (7) applies if:
(a) an external entity holds *total participation interests in 2 or more arrangement entities; and
(i) the amount (the lowest participation interest amount ) of one of those participation interests falls short of the amount of each of the other participation interests; or
(ii) the amount (the lowest participation interest amount ) of 2 or more of those participation interests is the same but falls short of the amount of each of the other participation interests.
For the purposes of paragraph (4)(c), treat the amount of the *total participation interest held by the external entity in each of the arrangement entities as being equal to the lowest participation interest amount. 12-436(8)
Each of the entities that entered into the *cross staple arrangement is a stapled entity in relation to the cross staple arrangement.