Income Tax Regulations (Amendment) (Cth)

Sta tu to ry Rules 1994 No. 399

Income Tax Regulations2 (Amendment)

I, THE GOVERNOR-GENERAL of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Income Tax Assessment Act 1936.

Dated 29 November 1994.

BILL HAYDEN

Governor-General

By His Excellency's Command,

GEORGE GEAR

Assistant Treasurer

1. Commencement

1.1 These Regulations commence on 1 December 1994.

2. Amendment

Regulations.

2.1 The Income Tax Regulations are amended as set out in these

2 Income Tax 1994 No. 399

3. New Divisions 9, 10 and 11 of Part 7

After Division 8 of Part 7, insert:

"Division 9—Reportable Payments System

Individuals authorised to sign documents for an individual payer

"147A. (1) For the purposes of subsection 220AE (1) of the Act, an individual authorised in accordance with subregulation (2) is declared to be a signatory for the purposes of signing a document for a payer who is an individual.

"(2) A payer who is an individual may authorise, in writing, another individual, who is a fit and proper person, to sign a document for the payer.

"(3) An individual is a fit and proper person if the individual:

(a) is at least 18 years old; and

(b) is of sound mind; and

(c) is of good fame, integrity and character; and

(d)	has not been convicted of a serious taxation offence during the previous 5 years; and
(e)	is not under a sentence of imprisonment for a serious taxation offence.

"(4) Paragraphs (3) (d) and (e) do not limit the generality of

paragraph (3) (c).

"(5) An authority under subregulation (2) must set out:

(a) the name of the authorised signatory; and

(b) the capacity in which the signatory acts for the payer; and

(c) a specimen signature of the signatory.

"(6) The payer must keep a copy of the authority for at least 5 years from the day on which the payer gives the authority.

Penalty: 2 penalty units.

Income Tax 1994 No. 3

"(7) The Commissioner or a Deputy Commissioner may, by notice in writing to the payer, disapprove of an authority if he or she is satisfied that the authorised signatory is not a fit and proper person for the purposes of subregulation (2).

"(8) If the payer receives a notice under subregulation (7), he or she must notify the authorised signatory that his or her authority is disapproved.

"(9) An authorised signatory must not sign a document under

this regulation after he or she is notified by the payer that his or her

authority is disapproved.

Penalty: 5 penalty units.

"(10) If a payer:

(a)	is a group employer for the purposes of section 2 2 I F of the Act; and
(b)	uses the arrangements referred to in regulation 120 for group employers to authorise the signing of documents;

an individual authorised using those arrangements is declared to be a

signatory for the purposes of subsection 220AE (1) of the Act.

Individuals authorised to sign documents for a payer that is not an individual

"147B. (1) For the purposes of subsection 220AE (2) of the Act, each of the following individuals is declared to be a signatory for the purposes of signing a document for a payer that is not an individual:

(a)	if the payer is a company—the public officer of the company;
(b)	if the payer is a partnership—each partner who is an individual;
(c)	if the payer is a board of trustees—the senior active trustee who is resident in Australia, or, if there is no act ive trustee res ident in Austral ia, the agent, in Australia, of the trustees;

(d) if the payer is a government body within the meaning of paragraph 120 (1) (d) of these Regulat ions—an officer of the government body appointed or authorised for the purpose;

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(e) if the payer is any other body—an officer authorised by the body.

"(2) For the purposes of subsection 220AE (2) of the Act, an individual authorised in accordance with subregulat ion (3) is declared to be a signatory for the purposes of signing a document for a payer that is not an individual.

"(3) An individual ment ioned in subregulat ion (1) may authorise, in writing, another individual, who is a fit and proper person, to sign a document for the relevant payer.

"(4) An individual is a fit and proper person if the individual:

(a) is at least 18 years old; and

(b) is of sound mind; and

(c) is of good fame, integrity and character; and

(d)	has not been convicted of a serious taxation offence during the previous 5 years; and
(e)	is not under a sentence of imprisonment for a serious taxation offence.

"(5) Paragraphs (4) (d) and (e) do not limit the generality of

paragraph (4) (c).

"(6) An authority under subregulation (3) must set out:

(a) the name of the authorised signatory; and

(b) the capacity in which the signatory acts for the individual who authorised the signatory; and

(c) a specimen signature of the signatory.

"(7) The payer in relation to which the authority is given

must keep a copy of the authority for at least 5 years from the day on

which the authority is given.

Penalty: 2 penalty units.

"(8) The Commissioner or a Deputy Commissioner may, by

notice in writing to the payer, disapprove of an authority if he or she

is satisfied that the authorised signatory is not a fit and proper person

for the purposes of subregulation (3).

"(9) If the payer receives a notice under subregulation (8), it must notify the authorised signatory that his or her authority is disapproved.

Income Tax 1994 No. 5

"(10) An authorised signatory must not sign a document under

this regulation after he or she is notified by the payer that his or her

authority is disapproved.

Penalty: 5 penalty units.

"(11) If a payer:

(a)	is a group employer for the purposes of section 221F of the Act; and
(b)	uses the arrangements referred to in regulation 120 for group employers to authorise the signing of documents;

an individual authorised using those arrangements is declared to be a

signatory for the purposes of subsection 220AE (2) of the Act.

Level of deduction if payee does not quote tax file number

"147C, For the purposes of paragraph 220AF (2) (b) of the Act, the factor set out in column 3 in the last item in Table 4 in Schedule 3 to these Regulat ions, expressed as a percentage, is specified.

"Division 10—Reportable payments in the fishing industry

Interpretation

"147D. In this Division, unless the contrary intention appears:

'fish' means a live, fresh, farmed or processed fish, crustacean, echinoderm or mollusc, whether whole or in part, but does not include aquatic mammals, aquatic reptiles, pearls or shells from which fish have been removed, oyster spat, fish roe, live fish ova,

aquarium fish, fish meal, fish oil or fish skins;

'processed fish' means fish which is cut, broken, filleted, packed,

frozen, preserved or treated in any other way, but does not include fish that is preserved by a heat sterilisation process, or a salt curing

process, and then enclosed in a hermetically sealed container;

'retailer' means a person who:

(a) in the course of business:	(i)	acquires goods (including fish) for resale to consumers; or
(ii)	acquires fish as part of providing a service or facility to the public; and

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(b) derives 50% or more of the person's income from the activities referred to in paragraph (a).

[Note: Examples of a retailer for the purposes of subparagraph (a) (i) of the definition of "retailer" are supermarkets, other retail markets, restaurants, fish and chip shops and other fast food outlets. Examples of a retailer for the purposes of subparagraph (a) (ii) of the definition of "retailer" are hotels and clubs.|

Payments in relation to fish declared to be reportable payments

"147E. (1) Subject to subregulation (2), and for the purposes of paragraph (a) of the definition of ' reportable payment ' in section 220AC of the Act, the following payments are declared to be reportable payments for the purposes of Division 1AA of Part VI of the Act:

(a) a payment that a person (including an agent) makes, or is liable to make, to a payee:

(i) in the course of the person's business; and

(ii) wholly or partly for the sale or supply of fish (whether directly or indirectly) for resale or resupply to other persons;

(b) if a person making a payment, and the payee, are fishers—a payment that a person makes, or is liable to make, to a payee:

(i) in the course of the person's business; and

(ii) wholly or partly for the sale or supply of fish (whether directly or indirectly) for use as bait in carrying on the business of taking or catching fish;

(c) a payment that a person makes, or is liable to make, to a payee:

(i) in the course of the person's business; and

(ii) in relation to the activity of fishing, or the taking or catching of fish.

"(2) Subregulat ion (1) does not apply to the fol lowing

payments:

(a) a payment made to, or by, a retailer;

(b) a payment of commission to an agent in relation to the sale or supply of fish.

Income Tax 1994 No. 7

[Notes: 1. Section 220AC of the income Tax Assessment Act 1936 provides

that a payment is not a reportable payment if:

(a)	it is not assessable income; or
(b)	it is salary or wages within the meaning of section 221 A; or
(c)	it is a prescribed payment within the meaning of section 221YHA; or
(d)	it is an exempt inter-corporate payment.

2. Example of a reportable payment involving an agent

If a fishing agent charges a fisher a commission of 10% for a sale of fish worth

$1,000:

(a)	the payment of the $ 1,000 to the agent is reportable; and
(b)	the payment of $ 1,000 that the agent is liable to pay to the fisher is reportable; and
(c)	the payment of $ 100 commission by the fisher to the agent is not reportable.]

"Division 11—Reportable payments in the clothing industry

Payments in relation to clothing declared to be reportable payments

"147F. (1) Subject to subregulations (2) and (3), and for the purposes of paragraph (a) of the definition of 'reportable payment ' in section 220AC of the Act, the following payments are declared to be reportable payments for the purposes of Division 1A A of Part VI of the Act:

(a)	a payment that a person makes, or is liable to make, wholly or partly, for any process involved in the manufacture of clothing;
(b)	a payment that a person makes, or is liable to make, wholly or partly, for the preparation of clothing before the clothing is first presented for sale as a complete and ready to wear item.

"(2) Subregulation (1) does not apply to a payment made by,

or on behalf of, an individual in relation to clothing for the

individual 's personal use.

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"(3) Subregulat ion (1) does not apply to a payment for

clothing if:

(a)	the clothing is supplied to the payer by, or on behalf of, the payee as a complete and ready to wear item; and
(b)	the payer, or a person acting for the payer, has not contributed to the manufacture of the clothing by giving the payee, or a person nominated by the payee:

(i) the design of the clothing; or

(ii) a sample of the clothing; or

(iii) a pattern for the clothing; or

(iv) material for the manufacture of the clothing; or

(v) machinery or tools for the manufacture of the clothing; or

(vi) an item of similar significance to the manufacture of the clothing.

"(4) For the purposes of subregulation (1):

(a)	' c l o t h i n g ' means any piece of apparel intended for human use, but does not include footwear, jewellery or costume jewellery; and
(b)	a 'process involved in the manufacture of clothing' includes designing, pat tern-making, cutting, sewing, clipping and trimming, making-up and embroidery; and

(c) the 'preparat ion of c lo th ing ' includes laundry,

pressing, labelling and packaging; and

(d) a payment that a person makes, or is liable to make, for any process involved in the manufacture of clothing includes a payment to a payee who:

(i) carries out a part of the process; or

(ii) arranges for another person to carry out the

process; and

(e) a payment that a person makes, or is liable to make, for the preparation of clothing includes a payment to a payee who:

(i) carries out a part of the preparation; or

(ii) arranges for another person to carry out the

preparation.

Income Tax 1994 No. 9

[Notes: 1. E x a m p l e of a r e p o r t a b l e p a y m e n t u n d e r

paragraph 147F (1) (a)

A manufacturer pays a contractor for the making-up and embroidery of 100

blouses.	The payment is reportable under paragraph 147F ( l ) (a) of the
Regulations.

2. Example of a reportable payment under paragraph 147F (1) (b)

A manufacturer makes a payment for the laundry and pressing of a skirt before first presenting the skirt to a retailer in an "off-the-rack" sale. The payment is reportable under paragraph 1.47F (1) (b) of the Regulations.

3. Example of a payment that is not reportable under

paragraph 147F (1) (b) to a person for the laundry and pressing of the skirt. The payment is not reportable under paragraph 147F (1) (b) because the retailer's payment was made after the skirt was first presented for sale as a complete and ready to wear item.]".

NOTES

1. Notified in the Commonwealth of Australia Gazette on 30 November 1994.

2. Statutory Rules 1936 No. 94 as amended by 1939 Nos. 6 and 42; 1940 Nos. 138 and 289; 1941 Nos. 120 and 327; 1942 Nos. 339 and 553; 1943 Nos. 80, 127 and 151; 1944 Nos. 90 and 124; 1945 Nos. 12, 85, 169 and 192; 1946 No. 135; 1947 Nos. 77 and 173; 1948 Nos. 115 and 162; 1949 Nos. 25 and 50; 1950 Nos. 63 and 101; 1951 Nos. 136 and 157; 1952 Nos. 89, 90 and 102; 1953 Nos. 55 and 88; 1954 Nos. 11, 99 and 112; 1955 No. 23; 1956 Nos. 34, 35 and 96; 1957 Nos. 39 and 74; 1958 Nos. 27 and 70; 1959 Nos. 25 and 81; 1960 Nos. 44 and 74; 1962 Nos. 15, 44 and 112; 1963 Nos. 53 and 92; 1964 Nos. 74, 121 and 134; 1965 Nos. 133 and 187; 1966 No. 156; 1967 Nos. 112 and 126; 1968 No. 1; 1969 No. 68; 1970 Nos. 43, 126, 168 and 213; 1971 Nos. 120 and 148; 1972 Nos. 48, 50 and 137; 1973 No. 266; 1974 Nos. 193, 226 and 267; 1975 Nos. 88, 89, 99, 101 and 213; 1976 Nos. 115, 188 and 212; 1977 Nos. 77, 107 and 248; 1978 Nos. 85 and 193; 1979 Nos. 126 and 239; 1980 Nos. 86, 137 and 149; 1981 Nos. 116 and 360; 1982 Nos. 115, 128, 267 and 280; 1983 Nos. 79, 87, 111, 213 and 319; 1984 Nos. 172, 286, 408, and 416; 1985 Nos. 21, 148, 274 and 278; 1986 No. 325 and Acts Nos. 28, 49 and 112, 1986; Statutory Rules 1987 Nos. 92 and 120; 1988 Nos.

196, 208, 262, 381, 382, 383 and 384 and Act No. 97, 1988; Statutory Rules

1989 Nos. 67, 80, 115, 123, 124, 141, 250 and 358; 1990 Nos. 19, 126, 151,

152, 192, 347, 390, 398 and 468; 1991 Nos. 20, 121, 156, 158, 240, 300, 301, 390 and 391; 1992 Nos. 38, 129, 216, 313 and 449; 1993 Nos. 15, 46, 47, 65,

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NOTES—continued

91, 159, 202, 216, 275, 288 and 370; 1994 Nos. 95, 96, 127, 174, 195 and 219.