Taxation Administration Amendment Regulation 2012 (No. 3)

Administered by Department of the Treasury

Legislation au F2012L01412 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Select Legislative Instrument 2012 No. 152

 

Issued by authority of the Assistant Treasurer

Taxation Administration Act 1953

Taxation Administration Amendment Regulation 2012 (No. 3)

Section 18 of the Taxation Administration Act 1953 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

This Regulation sets the rate of withholding tax that applies to income derived by Seasonal Workers from participating in the Seasonal Labour Mobility Program (Program) at a flat rate of 15 per cent.

The Program is designed to:

 

•                 assist Australian horticulturalists to source Seasonal Workers;

•                 encourage both skills transfer between Australia and East Timor and the Pacific Islands, and remittances home to East Timor and the Pacific Islands; and

•                 support Australia’s Pacific engagement strategy and partnership by providing access to the Australian labour market for workers from East Timor and the Pacific Islands.

 

In the 2012 Budget, the Government announced that it will reduce the marginal tax rate for non-resident individuals participating in the Program to 15 per cent, administered as a final withholding tax, and accordingly, this will mean that participants will not be required to lodge income tax returns.

 

Schedule 1 to the Tax Laws Amendment (2012 Measures No. 3) Act 2012 creates a new final withholding tax regime that applies to income derived by non‑resident workers participating in the Program. 

 

The formal imposition of income tax, and the establishment of the applicable rate of tax, is provided for by means of the Income Tax (Seasonal Labour Mobility Program Withholding Tax) Act 2012.

 

Subsection 15‑10(2) of Schedule 1 to the Act provides that the amount required to be withheld from a payment under Subdivision 12‑FC is to be worked out under the Regulation.  

 

This Regulation specifies the rate for withholding on amounts paid to employees participating under the Program to be 15 per cent. Under a final withholding tax regime, the rate of tax does not increase (or decrease) with the amount of income earned from participating in the Program.

 

Details of the Regulation are set out in the Attachment.

 

The Act specifies no conditions that need to be satisfied before the power to make the Regulation may be exercised.

 

This Regulation is a legislative instrument for the purposes of the Legislative Instrument Act 2003.

 

A Regulation Impact Statement was not required as the changes are machinery‑of‑government in nature.

 

Consultation was not necessary in relation to this instrument because the Regulation is minor or machinery in nature and does not substantially change the law. Secondly, the Regulation does not affect the public at large as it only applies to Seasonal Workers participating in the Seasonal Labour Mobility Program and their approved employers.

 

The Regulation commenced to coincide with the commencement of Schedule 1 to the Tax Laws Amendment (2012 Measures No. 3) Act 2012.

 

 

 

Authority:  Section 18 of the Taxation

                   Administration Act 1953

 

 

 

 

 

 

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Taxation Administration Amendment Regulation 2012 (No. 3)

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 of the Legislative Instrument

The purpose of the Legislative Instrument is to set out the rate of withholding tax that applies to income derived by Seasonal Workers from participating in the Program at a flat rate of 15 per cent. 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.  


Delete RIS if not required.

ATTACHMENT

 

Details of the Taxation Administration Amendment Regulation 2012 (No. 3)

 

Section 1 – Name of Regulation

 

This section provides that the title of the Regulation is the Taxation Administration Amendment Regulation 2012 (No. 3).

Section 2 – Commencement

 

This section provides for the Regulation to coincide with the commencement of Schedule 1 to the Tax Laws Amendment (2012 Measures No. 3) Act 2012.

 

Section 3 – Amendment of Taxation Administration Regulations 1976 

 

This section provides that the Taxation Administration Regulations 1976 are amended as set out in the Schedule.

 

Schedule – Amendment

 

Item 1 – Regulation 44DA

 

Regulation 44DA specifies the rate of withholding tax to be 15 per cent on amounts paid as salary, wages, commission, bonuses or allowances under section 12-319A of Schedule 1 to the Act. This rate will only apply to a holder of a Special Program Visa (subclass 416) who is employed by an Approved Employer under the Seasonal Labour Mobility Program. This Regulation applies in relation to payments made on or after 1 July 2012.  

 

 

Overview

The Taxation Administration Amendment Regulation 2012 (No. 3) was enacted to address the need for a streamlined tax regime for Seasonal Workers participating in the Seasonal Labour Mobility Program. This regulation was made under the authority of Section 18 of the Taxation Administration Act 1953, which empowers the Governor-General to make regulations necessary for carrying out or giving effect to the Act. The policy objective of this regulation was to establish a flat rate of withholding tax at 15 per cent for income derived by non-resident Seasonal Workers participating in the Program, thereby simplifying the tax process for these workers and their employers. This measure was introduced in the 2012 Budget to support the Government’s Pacific engagement strategy by facilitating the participation of workers from East Timor and the Pacific Islands in the Australian labour market, while also encouraging skills transfer and remittances back to their home countries. The regulation was designed to ensure that these workers would not need to lodge income tax returns, as their tax obligations would be met through the withholding tax system.

Scope and Application

The Taxation Administration Amendment Regulation 2012 (No. 3) applies to non-resident individuals participating in the Seasonal Labour Mobility Program, specifically those holding a Special Program Visa (subclass 416) and employed by an Approved Employer under the Program. This regulation sets a flat rate of 15 per cent for withholding tax on income derived by these Seasonal Workers, administered as a final withholding tax, meaning they will not be required to lodge income tax returns. The regulation's scope extends to transactions occurring within Australia and involves the withholding of tax on payments such as salary, wages, commission, bonuses, or allowances made under the Program. The regulation came into effect on 1 July 2012, aligning with the commencement of Schedule 1 to the Tax Laws Amendment (2012 Measures No. 3) Act 2012. The Act does not impose any conditions or thresholds for the application of this withholding tax rate, and the regulation itself does not introduce any exclusions or exemptions beyond its specified application to Seasonal Workers under the Program.

Key Provisions

The main operative sections of the Taxation Administration Amendment Regulation 2012 (No. 3) are those that specify the withholding tax rate for Seasonal Workers participating in the Seasonal Labour Mobility Program. Section 3 of the Regulation amends the Taxation Administration Regulations 1976 to set the withholding tax rate at a flat 15 per cent for income derived by non-resident workers participating in the Program. This flat rate applies to payments such as salary, wages, commission, bonuses, or allowances, and it only applies to holders of a Special Program Visa (subclass 416) who are employed by an Approved Employer under the Program. These regulations impose specific obligations on employers who engage Seasonal Workers under the Program. Employers must withhold tax at the rate of 15 per cent on all payments made to Seasonal Workers. The withholding tax is considered final, meaning that Seasonal Workers will not be required to lodge income tax returns. Employers must ensure that the correct amount of tax is withheld and remitted to the Australian Taxation Office (ATO) in accordance with the regulations. There are potential consequences for breach of these regulations. Employers who fail to withhold the correct amount of tax, or who fail to remit the withheld tax to the ATO, could face penalties. The exact nature and severity of these penalties would be determined by the ATO and could include fines or other administrative sanctions. Additionally, non-compliance could result in legal action against the employer, which could further escalate the financial and reputational consequences. Furthermore, under the Income Tax (Seasonal Labour Mobility Program Withholding Tax) Act 2012, any non-resident worker who fails to comply with the withholding tax requirements, or who provides false or misleading information to the ATO, could be subject to criminal charges. The maximum penalty for such offences could include fines and imprisonment, as stipulated by the relevant tax legislation. The precise penalties would depend on the nature and severity of the breach.

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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.