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Edited version of private advice
Authorisation Number: 1051531369915
Date of advice: 15 June 2019
Ruling
Subject: PAYG Withholding for volunteers
Question 1
Does the entity have an obligation to withhold tax from payments made to volunteers for the program under section 12-35 of Schedule 1 to the Taxation Administration Act 1953?
Answer
No. As the payments would not be assessable income to the volunteers, you are not required to withhold tax from payments made to volunteers.
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
The entity holds an international licence for the program, funding has been extended for further 12 months and terms remain unchanged.
The program as part of its delivery trains a local team in each school it operates. The team consists of X individuals representing parents, schools and community.
It is a value of the program that parent and other volunteer member are remunerated for their involvement.
Traditionally the team have volunteered their time and you provided an honorarium in lieu of hours.
Involvement in the program requires individuals to volunteer X hours of their time. You are funded to pay an amount of approximately $X per person.
Volunteer hours are tracked and recorded and paid through your finance department.
You have required each person to complete a "Statement by a Supplier" form. The volunteers have ticked the box on the form "not required to have an ABN as not carrying on an enterprise in Australia".
You envisage that in the coming year, at least X individuals will come under the arrangement.
The team members deliver the program on premises and are covered by insurance from a separate organisation.
The team members have no other association with you apart from involvement with the program.
The hours of involvement are spread out over a 3-4 month period, as part of program delivery requirements.
Relevant legislative provisions
Tax Administration Act 1953 section 12-1(1A)
Tax Administration Act 1953 section 12-35 of Schedule 1
Income Tax Assessment Act 1997 section 6-5