Australian Taxation Office
Taxation Administration Act 1953
Variation of amount required to be withheld
I, Megan Elizabeth Yong, Assistant Commissioner of Taxation, have varied to nil, the amount required to be withheld from withholding payments that are made to a religious practitioner and are:
- covered by section 12-47 of Schedule 1 to the Taxation Administration Act 1953; and
- within the class of cases described below.
I make this variation of the amount required to be withheld under the power contained in section 15-15 of Schedule 1 to the Taxation Administration Act 1953 to meet the special circumstances of that class of cases.
Effective for payments made on or after 1 July 2002.
This variation applies to payments made on or after 1 July 2002.
Class of Cases
This variation applies in respect of the following classes of payments:
- payments made by an entity that is not a religious institution to a religious practitioner for work or services except for the performance of chaplaincy and/or counselling services; and
- payments made by an entity that is not a religious institution to a religious practitioner, for chaplaincy and/or counselling services, where the payment does not exceed the following amounts:
- where the entity pays the religious practitioner weekly: $100; or
- where the entity pays the religious practitioner fortnightly: $200; or
- where the entity pays the religious practitioner monthly: $433.
Interpretation
- ‘Religious practitioner’ takes its meaning from section 995-1 of the Income Tax Assessment Act 1997.
- ‘Religious institution’ is not a defined term and therefore takes on its ordinary meaning. For guidance, reference may be made to Taxation Ruling TR 92/17.
Signed at Sydney, this 25th day of June 2002
Signed by Megan Yong
Assistant Commissioner of Taxation
Overview
The Taxation Administration Act 1953, enacted by the Commonwealth Parliament, provides the framework for the administration of taxation laws in Australia. A specific legislative instrument, F2006B00292, addresses the issue of the amount required to be withheld from payments made to religious practitioners, aiming to alleviate a particular problem or gap in the existing tax withholding requirements. The instrument was issued by Megan Elizabeth Yong, Assistant Commissioner of Taxation, under the authority granted by section 15-15 of Schedule 1 to the Taxation Administration Act 1953. This legislative instrument responds to special circumstances by varying the withholding amount to nil for certain payments made to religious practitioners, effective from 1 July 2002. The policy objective is to appropriately address the tax withholding obligations in a manner that accommodates the unique nature of payments made to religious practitioners for specified services.
Scope and Application
The Taxation Administration Act 1953, as varied by Assistant Commissioner Megan Yong, specifies a variation in the amount of withholding tax for certain payments made to religious practitioners. This variation applies to payments made by entities that are not religious institutions to religious practitioners for work or services, excluding chaplaincy and counselling services, and to payments for chaplaincy and counselling services that do not exceed specified thresholds. The variation reduces the withholding tax requirement to nil for these payments made on or after 1 July 2002, taking into account the ordinary meaning of terms such as "religious practitioner" and "religious institution," with further clarification available from Taxation Ruling TR 92/17. This alteration is aimed at addressing special circumstances under the authority granted by section 15-15 of Schedule 1 to the Taxation Administration Act 1953.
Key Provisions
The Taxation Administration Act 1953, as varied by the legislative instrument F2006B00292, includes provisions that alter the withholding requirements for certain payments made to religious practitioners (section 12-47). Specifically, this variation nullifies the amount required to be withheld from payments made by non-religious entities to religious practitioners, except under specific conditions (section 15-15). This variation is effective for payments made on or after 1 July 2002 and applies to payments made by non-religious entities to religious practitioners for work or services, excluding chaplaincy and/or counselling services. For chaplaincy and/or counselling services, the withholding requirement is waived if the payment does not exceed specific amounts: $100 weekly, $200 fortnightly, or $433 monthly.
Under this Act, non-religious entities are relieved of the obligation to withhold tax from payments made to religious practitioners, provided these payments fall within the specified categories. This means that entities are not required to deduct or remit any withholding tax for these payments, as long as they comply with the defined criteria. The term ‘religious practitioner’ is interpreted according to section 995-1 of the Income Tax Assessment Act 1997, while the term ‘religious institution’ is not defined in this Act and thus retains its ordinary meaning, with additional guidance available in Taxation Ruling TR 92/17.
Entities governed by this Act must ensure that any payments made to religious practitioners fall within the specified exemptions to avoid non-compliance. This involves correctly identifying whether the payments are for work or services outside of chaplaincy and/or counselling services, or if they fall within the exempted amounts for such services. Proper record-keeping and adherence to the outlined payment thresholds are essential to meet the statutory requirements.
Failure to comply with the provisions of this Act may result in legal consequences. The Act does not explicitly detail specific penalties for non-compliance in this legislative instrument, but breaches of the Taxation Administration Act 1953 generally may attract penalties as outlined in other sections of the Act. These can include financial penalties and potential legal action for non-compliance, depending on the severity and intent behind the breach.