Australian Taxation Office Legislative Instrument
Instrument ID 2012/MEI/0033
Taxation Administration Act 1953
Notice of exemption from providing payment summaries to passbook account holders
Explanatory Statement
General Outline of Instrument
- This instrument exempts entities from the requirement of providing payment summaries to passbook account holders.
- This instrument is made by the Commissioner of Taxation (the Commissioner) pursuant to section 16-180 of Schedule 1 to the Taxation Administration Act 1953.
- This is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect
4. The instrument commences on the day after it is registered on the Federal Register of Legislative Instruments.
What is this instrument about?
5. This instrument exempts entities from the requirement to provide payment summaries to passbook account holders.
6. The exemption only relates to payments made to passbook account holders where a TFN or ABN has not been quoted.
7. The absence of this exemption would place an unnecessary burden on financial institutions.
What is the effect of this instrument?
8. As a result of this instrument, payers are not required to give payment summaries to passbook account holders where they have withheld amounts from payments in accordance with Subdivision 12-E or 12-F. They are however required to provide payment summaries when specifically requested by the recipient/payee.
9. An assessment of the compliance cost impact indicates that the impact will be minor for both implementation and on-going compliance costs. The new instrument is of a minor or machinery nature.
Background:
10. Financial institutions are able to provide payment summaries to their investors detailing amounts subject to withholding, using the statements which they periodically issue to those investors. That method is not available in relation to passbook accounts. Holders of passbook accounts generally have simple affairs and withholding is very rarely required for these account holders. The requirement for payment summaries to be separately issued when withholding occurs places an unnecessary burden on the entity making the payment.
Consultation:
11. This exemption has been sought by financial institutions. This instrument replaces a previous exemption which lapsed in 2002. The impact on investors is not significant.
Erin Holland
Deputy Commissioner of Taxation
Legislative references:
Taxation Administration Act 1953
Legislative Instruments Act 2003
Human Rights (Parliamentary Scrutiny) Act 2011
Statement of Compatibility with Human Rights
This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Taxation Administration Act 1953
Notice of exemption from providing payment summaries to passbook account holders
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
This Legislative Instrument exempts entities from the requirement to provide payment summaries to passbook account holders.
The exemption only relates to payments made to passbook account holders where a TFN or ABN has not been quoted.
Human rights implications
This legislative instrument does not engage any of the applicable rights or freedoms because the new instrument is of a minor or machinery nature.
Conclusion
This legislative instrument is compatible with human rights as it does not raise any human rights issues.
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Erin Holland
Deputy Commissioner of Taxation
Overview
The Taxation Administration Act 1953, enacted by the Parliament of Australia, addresses the administrative aspects of taxation laws, including the provision of payment summaries. The Act was amended by legislative instrument F2012L02333 to introduce an exemption from the requirement of providing payment summaries to passbook account holders. This exemption was introduced to alleviate the administrative burden on financial institutions by exempting them from issuing payment summaries to passbook account holders where a Tax File Number (TFN) or Australian Business Number (ABN) has not been quoted. The instrument was made by the Commissioner of Taxation under section 16-180 of the Taxation Administration Act 1953, aiming to ensure that financial institutions are not unduly burdened by the requirement to provide payment summaries, which is particularly relevant for passbook account holders who typically have simple affairs and rarely require withholding.
Scope and Application
The Taxation Administration Act 1953 Notice of exemption from providing payment summaries to passbook account holders, issued under the authority of the Commissioner of Taxation, exempts entities from the obligation to furnish payment summaries to passbook account holders. This exemption applies specifically to payments made to individuals or entities holding passbook accounts where neither a Tax File Number (TFN) nor an Australian Business Number (ABN) has been quoted. This legislative instrument, effective from the day after its registration on the Federal Register of Legislative Instruments, is designed to alleviate the unnecessary burden on financial institutions by reducing compliance costs associated with the provision of payment summaries for passbook account holders. Despite this exemption, entities remain obligated to issue payment summaries if specifically requested by the payee. The exemption is confined to Commonwealth jurisdiction and does not extend to state or territory laws. Additionally, this legislative instrument does not impose any significant impact on the rights and freedoms as recognised or declared in international human rights instruments.
Key Provisions
The legislative instrument F2012L02333 (Explanatory statement) pertains to the Taxation Administration Act 1953 and provides an exemption from the requirement of providing payment summaries to passbook account holders (sections 16-180). This instrument was issued by the Commissioner of Taxation and commences on the day after its registration on the Federal Register of Legislative Instruments. The key provision of this instrument is the exemption for entities from the obligation to issue payment summaries to passbook account holders, particularly in cases where a Tax File Number (TFN) or Australian Business Number (ABN) has not been quoted (sections 6 and 7). This exemption is designed to alleviate the burden on financial institutions that would otherwise have to issue these summaries separately, which is not feasible for passbook accounts (section 10).
Entities governed by this Act must ensure that they are compliant with the exemption for passbook account holders, meaning they are not required to provide payment summaries for these accounts when amounts have been withheld in accordance with Subdivision 12-E or 12-F (section 8). However, entities must still provide payment summaries if specifically requested by the payee (section 8). The instrument specifies that the compliance cost impact is expected to be minor, both for initial implementation and ongoing compliance (section 9).
There are no specific offences, penalties, or criminal/civil consequences outlined in this instrument for non-compliance with the exemption provisions. However, entities must adhere to the requirements as stipulated to avoid potential administrative actions or scrutiny by the Commissioner of Taxation. The instrument's compatibility with human rights is confirmed in the Statement of Compatibility with Human Rights, which notes that the legislative instrument does not engage any applicable rights or freedoms due to its minor or machinery nature (section 11). This compatibility assessment ensures that the legislative instrument aligns with the human rights and freedoms recognized in international instruments as outlined in the Human Rights (Parliamentary Scrutiny) Act 2011.