PAYG Withholding - Variation to the rate of withholding for certain foreign resident staff who provide support to those engaged in entertainment or sports activities

Administered by Department of the Treasury

Legislation au F2019L00407 In force Legislative Instrument

Legislation content

Explanatory Statement

 

PAYG Withholding - Variation to the rate of withholding for certain foreign resident staff who provide support to those engaged in entertainment or sports activities

 

 

General outline of instrument

  1. This variation is made by the Commissioner of Taxation under section 15-15 of Schedule 1 to the Taxation Administration Act 1953.
  2. This instrument varies to nil the amount required to be withheld from payments made to foreign resident support staff who provide support to those engaged in entertainment or sports activities, where those support staff are normally resident in countries which have an international tax agreement with Australia.
  3. This instrument repeals and replaces legislative instrument F2017L01228, registered on 21 September 2017.
  4. This is a legislative instrument for the purposes of the Legislation Act 2003.
  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.      The instrument commences on the day after its registration with the Federal Register of Legislation.

What is this instrument about?

7.      Legislative Instrument F2017L01228 varies to nil the amount required to be withheld from payments made to certain foreign resident staff who provide support to those engaged in entertainment and sports activities.

8.      That instrument made reference to regulation 44 and paragraph 44B (4) (b) of the Taxation Administration Regulations 1976. That reference is now incorrect, with the equivalent provision being paragraph 32 (3) (b) of the Taxation Administration Regulations 2017. This new instrument provides the correct reference.

9.      Upon registration this instrument repeals and replaces F2017L01228 and continues to provide the same treatment for the affected class of cases.

What is the effect of this instrument?

10.  The only change being made in this instrument is to update the reference to a regulation within the instrument to the correct regulation number following the remaking of the Taxation Administration Regulations 1976 into the Taxation Administration Regulations 2017.

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.  From 1 July 2004 foreign resident withholding was introduced to payments relating to entertainment or sports activities, including support staff.

13.  In 2007 legislative instrument F2007L03532 was created to remove the requirement to withhold tax from payments to support staff that would be exempt from tax in Australia due to the operation of an international tax agreement.

14.  That variation was renewed in 2017 as legislative instrument No. F2017L01228.

15.  In 2017, shortly after the registration of that instrument, the Taxation Administration Regulations 1976 were re-made. As a result the relevant references contained in the 2017 variation were no longer applicable. This new variation updates the references by inserting a reference to paragraph 32(3)(b) of the Taxation Administration Regulations 2017.

Consultation

16.  No consultation has been conducted as the effect of the instrument is to continue the current withholding variation for these payments. The only change that is being made in this instrument is to update a regulation reference within the instrument to the correct regulation.

 

 

Legislative references:

Taxation Administration Act 1953

Legislation Act 2003

Acts Interpretation Act 1901

Taxation Administration Regulations 1976

Taxation Administration Regulations 2017

Human Rights (Parliamentary Scrutiny) Act 2011

International Tax Agreements Act 1953

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 to the rate of withholding for certain foreign resident staff who provide support to those engaged in entertainment or sports activities

 

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 removes the requirement to withhold amounts from payments made to support staff from the relevant countries, who are engaged in entertaining and sports activities, because the international tax agreements made with those countries act to ensure that the income earned will not be subject to tax in Australia.

 

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. This instrument avoids unnecessary withholding in circumstances where no tax will be payable.

 

Conclusion

 

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

Overview

The PAYG Withholding - Variation to the rate of withholding for certain foreign resident staff who provide support to those engaged in entertainment or sports activities is a legislative instrument made by the Commissioner of Taxation under section 15-15 of Schedule 1 to the Taxation Administration Act 1953. Enacted to address the issue of updating regulatory references following the remaking of the Taxation Administration Regulations 1976 into the Taxation Administration Regulations 2017, this instrument aims to ensure that the correct regulatory reference is maintained for the continued nil withholding treatment of payments made to foreign resident support staff in entertainment or sports activities. The policy objective is to avoid unnecessary withholding in circumstances where no tax will be payable due to the operation of international tax agreements. The instrument is of a minor or machinery nature, and its effect is to update the reference to the correct regulation, ensuring compliance with the updated legislative framework.

Scope and Application

The PAYG Withholding - Variation to the rate of withholding for certain foreign resident staff who provide support to those engaged in entertainment or sports activities applies to foreign resident support staff who are normally resident in countries with which Australia has an international tax agreement. This instrument, made by the Commissioner of Taxation under section 15-15 of Schedule 1 to the Taxation Administration Act 1953, specifically exempts these individuals from the withholding tax on payments related to entertainment or sports activities. It is applicable on a national level across Australia, and its effect is to update regulatory references to align with the re-made Taxation Administration Regulations 2017, without altering the substantive withholding variation. The instrument repeals and replaces F2017L01228 and does not introduce any new exemptions or thresholds; instead, it ensures the continued application of the existing withholding variation in the correct regulatory context.

Key Provisions

The key operative sections of this legislative instrument are found within section 3 of the Taxation Administration Act 1953, which allows the Commissioner of Taxation to vary the rate of withholding for certain categories of payments. Specifically, section 15-15 of Schedule 1 to the Taxation Administration Act 1953 is invoked to adjust the withholding rates for payments made to foreign resident support staff who provide services to those engaged in entertainment or sports activities. The instrument specifies that the withholding amount is set to nil for payments to such staff if they are residents of countries that have an international tax agreement with Australia (section 7). The instrument also references the correct regulation within the Taxation Administration Regulations 2017, updating an outdated reference from the previous regulations (section 8). The Act imposes specific obligations on entities making payments to the affected foreign resident support staff. These entities must ensure that the payments are made without withholding any tax, as per the variation outlined in the legislative instrument (section 7). Furthermore, the obligation extends to updating any references within their internal records or systems to reflect the correct regulation number from the Taxation Administration Regulations 2017 (section 8). The entities must also ensure that the support staff in question are indeed residents of countries with which Australia has an international tax agreement, thereby qualifying them for the nil withholding rate. Failure to comply with the requirements set forth in this legislative instrument could lead to penalties. While the explanatory statement does not explicitly detail the penalties for non-compliance, it is implied that entities that fail to adhere to the withholding variation could be subject to the standard penalties for non-compliance with taxation laws. These penalties could include fines or other financial penalties as stipulated under the relevant taxation laws. The exact penalties would be determined based on the specific nature and extent of the non-compliance, but they could potentially include significant financial repercussions for the non-compliant entity.

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Legislative Instrument
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Definitions & Interpretation
Repeal & Amendment
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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.