Notice exempting entities from giving a duplicate copy of a payment summary to payees for any payment - Legislative Instrument
Explanatory Statement
General Outline of Instrument
This instrument is a notice exempting entities from providing employees and other payees with a duplicate copy of a pay as you go (PAYG) withholding payment summary for all types of payments subject to PAYG withholding.
The instrument is made under section 16-180(1) of Schedule 1 to the Taxation Administration Act 1953.
The instrument will be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
This legislative instrument will revoke Legislative Instrument No. F2007L01196 registered on the 30th day of April 2007.
Date of effect
This instrument applies from 1 June 2008.
What is this instrument about:
The purpose of the notice is to remove the requirement for payers of withholding payments to provide payees with a duplicate copy of a payment summary where the payments are covered under Subdivisions 12-B, 12-C, 12-D, 12-E, 12-F, 12-FA, 12-FAA, 12-FB, 12-G and Division 13 of Schedule 1 to the Taxation Administration Act 1953.
This requirement is also removed from payments covered by section 86-40 of the Income Tax Assessment Act 1997.
What is the effect of this instrument:
The effect of the instrument is that payers will only be required to provide one original copy of any payment summary that they issue to their payees.
Background:
The requirement to provide both an original and a duplicate copy of the payment summary was put in place so that the payees were able to attach the original version to their annual income tax return and retain the duplicate copy for their personal records.
In May 2007, all payers that made payments that are reported on the PAYG payment summary – individual non-business were exempted from providing payees with two original copies of this form, as a copy of this form was not required to be lodged with the annual income tax return.
The majority of taxpayers now lodge their tax returns electronically and they are not required to provide a payment summary copy to the Tax Office. The Tax Office is able to use information reported directly from the employer or payer to check the amounts included in the tax return.
The Tax Office has since removed the requirement for any paper payment summary copies to be attached to the annual income tax return for the 2008 income year and onwards.
In the circumstances, it is no longer necessary to compel employers and other payers to provide a duplicate copy of any payment summaries to their payees. This legislative instrument broadens the scope of Legislative Instrument No. F2007L01196 and will revoke it.
Consultation:
In line with the Legislative Instruments process the draft Notice has to be provided to relevant internal & external stakeholders for feedback.
Tax practitioners, software developers and small businesses who have Pay As You Go withholding obligations have been consulted during the development with most welcoming the change.
This legislative instrument has been subject to a cost compliance calculation as recommended by the Office of Best Practice and Regulation . An assessment of the compliance cost impact indicates that the impact will be minimal for both implementation and on-going compliance costs.
Erin Holland
Deputy Commissioner of Taxation
16 May 2008
Legislative references:
Subject references:
PAYG payment summary
Pay as you go
PAYG withholding
Legislative references:
Subdivision 12-B (except 12-55 and 12-60)
Subdivision 12-C (except 12-85)
Subdivision 12-D
Section 16-180 of Schedule 1 to the Taxation Administration Act 1953