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Draft Taxation Determination

TD 93/D283

Income tax: an advertising agency makes a payment of salary or wages to a model through a modelling agency. Is the advertising agency required to make a tax instalment deduction from this payment under subsection 221C(1A) of the Income Tax Assessment Act 1936?

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FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) represent the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes. The advertising agency is required to make the tax instalment deduction from the payment of salary or wages.

2. The fact that the payment passess through the modelling agency does not change this. The modelling agency is merely an 'employment agency' as defined in Taxation Ruling IT 2576.

Examples:

A. Asterisk Advertising Agency engages Robin , a model, through Marvellous Modelling Agency. Asterisk pays Marvellous. Marvellous pays Robin. Asterisk is required to make the deduction.
B. Asterisk engages Robin through Marvellous. Marvellous pays Robin. Marvellous invoices Asterisk for Robin's services. Asterisk pays Marvellous the invoiced amount. Asterisk is required to make the deduction.
C. Asterisk engages Robin through Marvellous. Asterisk makes a payment direct to Robin. Asterisk is required to make the deduction.

Commissioner of Taxation
9 December 1993

References


BO CHA Case 222

ISSN: 1038-8982

Related Rulings/Determinations:

TD 92/191
IT 2121
IT 2129
IT 2576
IT 2639

Subject References:
PAYE
salary or wages
contracts for labour
tax instalment deductions

Legislative References:
ITAA 221A(1)
ITAA 221A(2)
ITAA 221C(1A)


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