Edited version of your private ruling

Authorisation Number: 1012375303896

This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.

Ruling

Subject: PAYG withholding

Question

Are you required to deduct pay as you go (PAYG) withholding tax from the payments made to a secretary and treasurer?

Answer

Yes.

This ruling applies for the following period(s)

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

Year ended 30 June 2017

The scheme commenced on

1 July 2012

Relevant facts and circumstances

Your organisation has paid employees as well as volunteers.

You will establish an administrative hub for secretarial and treasury services to a number of sub-groups and the Group. The Group consists of one representative from each sub-group.

The Group will have one secretary and one treasurer who will provide services to the sub-groups and the Group.

The Expression of interest for the secretary's position states:

· their general duties include co-ordination of incoming and outgoing correspondence, maintenance of correspondence files, preparation and distribution of meeting minutes and agendas, maintaining membership registrations, facilitating elections and awards and other tasks as required

· sub-groups may appoint minute secretaries and/or meet in clusters which will reduce the number of meetings the secretary is required to attend, and

· a payment of a set amount per annum will be made to cover expenses associated with performing the role.

The Expression of interest for the treasurer's position states:

· their general duties include maintaining the financial records of the sub-groups and the Group, provide independent financial reports, manage the receipt and payment of monies, facilitate the transition to a single bank account and other tasks as required

· the treasurer will not be expected to attend all meetings but will be required to provide the appropriate reports and make themselves available to answer questions relating to the financial operations of the sub-groups/Group, and

· a payment of a set amount per annum will be made to cover expenses associated with performing the role.

The secretary and treasurer will be provided with the relevant IT equipment to carry out their duties.

It is anticipated the secretary and treasurer will each spend a number of hours per week in carrying out their roles.

Each will receive a set amount per annum which will be paid in instalments.

The amounts of the payments were not determined with reference to any award or agreement or to the anticipated amount of hours to be worked. The payments are being made in recognition that the treasurer and secretary will incur expenses in travelling to other areas to attend meetings.

Previously each sub-group had its own secretary and treasurer who were only required to attend the sub-group meetings in their local area.

The positions of secretary and treasurer are created under an Australian act or law.

Relevant legislative provisions

Taxation Administration Act 1953 Schedule 1 Section 12-35

Taxation Administration Act 1953 Schedule 1 Section 12-45

Reasons for decision

Summary

As the group secretary and treasurer are office holders for the purposes of the PAYG withholding legislation, you are required to deduct PAYG withholding from the payments made to them.

Detailed reasoning

Division 12 in Schedule 1 of the TAA outlines the situations where a paying entity is obliged to withhold part of an amount paid to another entity. The withheld amount is referred to as PAYG withholding.

PAYG withholding must be deducted where a payment of salary, wages, commission, bonuses or allowances is paid to an individual as an office holder.

Taxation Ruling TR 2002/21 discusses PAYG withholding from salary, wages, commission, bonuses or allowances paid to office holders.

An office holder includes an individual who is a person who holds, or performs the duties of, an appointment, office or position under the Constitution or an Australian law.

An individual is considered to be appointed or engaged under an Act where it can be identified that either:

· the particular office, position or appointment, or

· the constitution of the relevant body (such as a panel, board committee or tribunal) to which the individual has been appointed,

· is specified in relevant legislation or statutory instrument. That is, there must be a specific Act or statutory instrument which identifies the creation of the position held.

In your case, the positions of group secretary and treasurer are positions that are identifiable in specific legislation or a statutory instrument.

Therefore, the secretary and treasurer are considered to be office holders for the purposes of the PAYG withholding legislation.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).