Taxation Administration Act 1953 - PAYG Withholding Variation: Financial Supplies (19/11/2001)

Overview

The legislative instrument F2006B00321, enacted in 2001, addresses a specific issue concerning the withholding of PAYG tax on certain payments. This instrument was issued under the authority of the Taxation Administration Act 1953 by Stuart Frederick Forsyth, the Assistant Commissioner of Taxation. The purpose of this instrument is to provide relief to a particular class of cases where suppliers have not quoted an Australian Business Number (ABN) and are making payments wholly for financial supplies as defined in the A New Tax System (Goods and Services Tax) Regulations 1999. This variation reduces the PAYG withholding amount to nil, aiming to alleviate administrative burdens on suppliers who inadvertently fall into this category, thereby facilitating compliance and ensuring that the tax system operates smoothly. This variation is effective from the date it is published in the Gazette.

Scope and Application

The legislative instrument F2006B00321, issued by Stuart Frederick Forsyth, Assistant Commissioner of Taxation, pertains to the variation of the amount required to be withheld under the Pay As You Go (PAYG) withholding provisions. This variation applies to specific circumstances where the supplier of a service has not quoted an Australian Business Number (ABN) and the payment is entirely for a financial supply as defined in the A New Tax System (Goods and Services Tax) Regulations 1999. Notably, the requirements outlined in subregulation 40-5.09 (1)(a) and (b) of the GST Regulations do not need to be fulfilled for this variation to apply. The instrument operates under the authority granted by section 15-15 of Schedule 1 to the Taxation Administration Act 1953, aiming to address unique cases where the standard withholding rules might otherwise apply. This variation is effective for payments made on or after the publication of the notice in the Gazette. The scope of this legislative instrument is national, applying across Australia under the Commonwealth jurisdiction.

Key Provisions

The key operative sections of this legislative instrument (F2006B00321) specify a variation to nil the amount required to be withheld from certain payments under section 12-190 of Schedule 1 to the Taxation Administration Act 1953 (paragraph 1). This variation is made pursuant to the power provided in section 15-15 of the same Schedule (paragraph 2). The variation applies to payments made on or after the date on which a copy of this notice is published in the Gazette (paragraph 3). This Act imposes specific obligations on the parties it governs, particularly focusing on withholding payments. Under the new provisions, the withholding amount is set to nil for payments made to suppliers who have not quoted an Australian Business Number (ABN) and where the payment is for a financial supply as defined in Part 3-1, Division 40 of the A New Tax System (Goods and Services Tax) Regulations 1999 (paragraph 4). However, in these cases, the requirements in subregulation 40-5.09 (1)(a) and (b) of the GST Regulations do not need to be satisfied (paragraph 5). Any breaches of the provisions outlined in this legislative instrument could lead to specific consequences. Although the document does not explicitly state any penalties or consequences for non-compliance, it is important to note that failure to adhere to the withholding obligations as stipulated in the Taxation Administration Act 1953 could result in legal ramifications. These could include fines, penalties, or other civil or criminal consequences as prescribed by the relevant tax legislation. The maximum penalties for such breaches would depend on the specific tax laws and the nature of the non-compliance.