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Ruling
Subject: Withholding
Question
Are you required to withhold from the payments made where you consider the information contained in the statement by a supplier to be incorrect?
Answer
Yes.
This ruling applies for the following period:
Year ending 30 June 2013
Relevant facts and circumstances
During the course of normal operations you can be called on to approve payments to people for travel and accommodation and attendance payments to attend meetings and gatherings connected with your activities.
The people attending these meetings are expected to have input in relation to their perspective of the impact and perceived outcome of the services you provided. The usual stay is two days at any of the meetings and you have no control of those people for example, they may or may attend and could stay or leave whenever they wished. They produce no reports and only input their views (if they wish) in a group type meeting environment, they have no risk, provide no material and have no delegation authority.
You have assessed that the people are not employees or contractors.
The payments are of four possible types:
1. A payment to cover the cost of travel and accommodation at the venue of the meeting where the quantum of the payment is within the reasonable travel expense amounts for 2012/13 year as set out in TD 2012/17.
2. Additional payment to cover the cost of travel and accommodation at the venue of the meeting where the quantum of the additional payment is in excess of the reasonable travel expense amounts for 2012/13 year as set out in TD 2012/17.
3. Other payment being neither travel nor accommodation related but to pay a fee for attendance at the meeting. This may amount to hundreds of dollars and can be ongoing and recurring.
4. Motor Vehicle payment for the use of privately owned cars using the cents per kilometer basis of calculation.
Relevant legislative provisions
Taxation Administration Act 1953 item 15 of subsection 10-5(1) of Schedule 1
Taxation Administration Act 1953 paragraph 12-190(6)(b) of Schedule 1
Reasons for decision
Paragraph 12-190(6)(b) of Schedule 1 of Taxation Administration Act 1953 states:
The payer need not withhold an amount under this section if, when the payment is made:
(a) the other entity is an individual and has given the payer a written statement to the effect that:
the supply is made in the course or furtherance of an activity, or series of activities, done as a private recreational pursuit or hobby; or
(ii) the supply is, for the other entity, wholly of a private or domestic nature; and
(b) the payer has no reasonable grounds to believe that the statement is false or misleading in a material particular.
ATO publication NAT 3346-05.2012 Fact sheet for payers - Statement by a supplier: gives direction to withhold from payments if you have reasonable grounds to believe that the statement supplied is false or misleading.