PAYG Withholding Variation: Performing Artists 2018

Administered by Department of the Treasury

Legislation au F2018L01119 In force Legislative Instrument

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Explanatory Statement

 

PAYG Withholding Variation: Performing Artists 2018

 

General outline of instrument

  1. This variation is made by the Commissioner of Taxation (the Commissioner) under section 15-15 of Schedule 1 to the Taxation Administration Act 1953.
  2. This instrument varies the rate of withholding required by a payer under the pay as you go withholding system for payments in a certain class of cases.
  3. This is a legislative instrument for the purposes of the Legislation Act 2003.
  4. This legislative instrument repeals and replaces Legislative Instrument No. F2016L01639 registered on 25 October 2016.
  5. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

Date of effect

6.     This instrument commences on the day after its registration on the Federal Register of Legislation.

 

What is this instrument about?

7.     Legislative Instrument No.F2016L01639 provided a variation to the rate of withholding for payments made to performing artists when certain conditions were met.

8.     That instrument made reference to regulation 44 of the Taxation Administration Regulations 1976. That reference is now incorrect, with the equivalent provision being sub-regulation 27(c) of the Taxation Administration Regulations 2017. This new instrument provides the correct reference.

9.     Upon registration this instrument repeals and replaces F2016L01639. It continues to provide the same treatment for the affected class of cases.

 

What is the effect of this Instrument?

10. The effect of this instrument is to continue the present withholding arrangement varying withholding to a flat rate of 20% for performing artists being paid for performing in a promotional activity.

11. 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

12. In 2002 a withholding variation was first created to tax performing artists at a rate more aligned to their end of year tax liability and to provide simplicity for their payers when administering these payments.

13. The payments covered by this variation are for work that is generally of a short term or one-off nature.

14. The variation was made in consultation with industry groups to provide a withholding rate in keeping with the irregular work patterns of performing artists.

15. That variation was renewed, most recently in 2016 as Legislative Instrument No.F2016L01639.

16. In 2017 the Taxation Administration Regulations 1976 were remade. As a result the relevant references contained in the 2016 variation were no longer applicable. This new variation corrects that error by inserting a reference to sub-regulation 27(c) of the Taxation Administration Regulations 2017.

17. The variation helps avoid unnecessary over-withholding that would in most cases be refunded to the artist when they lodge their income tax return.

18. This instrument continues that treatment.

 

Consultation

19. No consultation has been conducted as the effect of the instrument is to support current practices. The only substantial change that was made to the instrument was to correct the reference to the Taxation Administration Regulations 2017.

 

 

Legislative references:

Taxation Administration Act 1953

Taxation Administration Regulations 2017

Legislation Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

 

Acts Interpretation Act 1901

Statement of Compatibility with Human Rights

 

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

 

PAYG Withholding Variation: Performing Artists 2018

 

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 varies the withholding rate to 20% for payments made under a contract to an individual engaged as a performing artist to perform in an activity in which the individual:

(i.) endorses or promotes goods or services; or

(ii.) appears or participates in an advertisement; 

 

unless the individual is engaged primarily because he or she is a sportsperson.

The individual engaged as a performing artist has provided the payer with a Tax file number declaration quoting their tax file number.

 

 

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.

 

 

 

 

 

 

Overview

The PAYG Withholding Variation: Performing Artists 2018 legislative instrument, made under section 15-15 of Schedule 1 to the Taxation Administration Act 1953, adjusts the withholding tax rate for payments to performing artists involved in promotional activities to a flat rate of 20%. This instrument was enacted to correct an outdated reference within the 2016 withholding variation due to the replacement of the Taxation Administration Regulations 1976 with the Taxation Administration Regulations 2017. The variation aims to address the irregular income patterns of performing artists by avoiding over-withholding, thus ensuring a simpler and more accurate tax administration for both artists and payers. This instrument was created by the Commissioner of Taxation and is designed to continue the existing withholding arrangement, ensuring minor compliance costs and maintaining the integrity of the taxation system.

Scope and Application

The PAYG Withholding Variation: Performing Artists 2018 legislative instrument, made by the Commissioner of Taxation under the Taxation Administration Act 1953, pertains to the withholding tax rate applied to payments made to performing artists who participate in promotional activities. This instrument applies to individual performing artists who are paid for endorsing or promoting goods or services, or for appearing in advertisements, provided they are not primarily engaged due to their status as sportspersons. The instrument ensures that the payer applies a withholding rate of 20% for such payments, aligning more closely with the artists' annual tax liabilities and simplifying the administration of these payments for payers. This instrument, which is of a minor or machinery nature, commenced on the day after its registration on the Federal Register of Legislation, and it repeals and replaces the previous instrument, Legislative Instrument No. F2016L01639, correcting an outdated reference to the Taxation Administration Regulations. It aims to prevent over-withholding, which would usually be refunded upon the artist's tax return submission. The instrument applies on a Commonwealth level and does not engage any of the applicable rights or freedoms as it is considered a minor or machinery legislative instrument, thus ensuring its compatibility with human rights.

Key Provisions

The PAYG Withholding Variation: Performing Artists 2018 (F2018L01119) modifies the withholding rate for payments made to performing artists engaged in promotional activities (section 10). Specifically, it sets a flat rate of 20% for such payments, provided the artist has supplied their Tax File Number (TFN) declaration to the payer. This variation applies to artists endorsing or promoting goods or services or appearing in advertisements, but excludes those primarily engaged because of their sporting prowess. This legislative instrument, which is a minor or machinery nature, aims to align the withholding rate more closely with the artist's actual tax liability and to simplify the withholding process for payers. Under this Act, the obligations imposed on payers include verifying the artist's TFN through a TFN declaration and applying the specified withholding rate of 20% to the payments made for promotional activities. This ensures that the amount withheld reflects a more accurate estimate of the artist's end-of-year tax liability, thereby preventing over-withholding and potential refund requirements at tax time. The Act also mandates that the payer must only apply this withholding rate if the artist is not primarily engaged for their sporting abilities. Failure to comply with these obligations could result in incorrect withholding, potentially leading to compliance issues for both the artist and the payer. Breach of the withholding obligations stipulated in this Act may result in penalties for the payer. Although the specific penalties are not detailed in the explanatory statement, breaches of withholding obligations generally carry severe consequences under Australian tax law. These can include financial penalties and interest on unpaid amounts. The payer may also be subject to civil or criminal prosecution, depending on the severity and intent of the breach. It is important for payers to adhere strictly to the withholding rates specified to avoid these potential consequences.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.