Taxation Administration (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023

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Legislation au F2023L00361 In force Legislative Instrument

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Explanatory Statement

Taxation Administration (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023

 

 

General outline of instrument

  1.                This instrument is made under section 16-180 of Schedule 1 to the Taxation Administration Act 1953 (the Act).
  2.                This instrument exempts passbook account providers from the requirement to provide a payment summary to a holder of passbook savings account, for certain payments made to that account.
  3.                The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
  4.                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

5.                  This instrument commences on the day after it is registered on the Federal Register of Legislation.

 

Effect of this instrument

6.                  This instrument exempts passbook account providers from the requirement to give a payment summary to a holder of a passbook account where the criteria in section 6 of the instrument are met.

7.                  Under section 6, the exemption is only available where:

(a)               the payment summary relates to a payment made to a passbook account issued by the passbook account provider during the relevant financial year. The passbook account must have been open or in use at any time during the financial year, although it may have since been closed, and

(b)               an amount must have been withheld from this payment under Subdivision 12-E (Payments where TFN or ABN not quoted) or Subdivision 12-F (Dividend, interest and royalty payments) of Schedule 1 to the Act.

8.                  However, where a passbook account holder has specifically requested a payment summary in relation to their passbook account, the exemption in section 6 of the instrument will not be available. The passbook account provider must provide the payment summary in these circumstances.

9.                  This instrument repeals and replaces the Notice of exemption from providing payment summaries to passbook account holders (30/11/2012) (F2012L02333).

 

Compliance cost assessment

10.              Compliance cost impact: Minor – There will be no additional impacts as the instrument is minor and machinery in nature OBPR22 -03757.

 

Background

11.              A passbook savings account is a particular type of interest-bearing savings account offered by some financial institutions (passbook account providers), where the passbook account holder is provided with a document (passbook) which records their deposits and withdrawals and negates the need for the financial institution to issue periodic bank statements.

12.              Passbook account holders generally have simple affairs and withholding is rarely required. However, when withholding does occur, the requirement for payment summaries to be separately issued places a burden on passbook account providers.

13.              Generally, financial institutions can provide payment summaries to their investors detailing amounts subject to withholding by using the statements which they periodically issue to those investors. This method is not available in relation to passbook accounts.

14.              Because of this, passbook account providers requested an exemption from the requirement to issue payment summaries to passbook account holders.

15.              An exemption from providing payment summaries for passbook accounts was provided by the Notice of exemption from providing payment summaries to passbook account holders (30/11/2012) (F2012L02333), which is due to sunset on 1 April 2023. This instrument would continue the exemption.

 

Consultation

16.              Subsection 17(1) of the Legislation Act 2003 requires that a rule-maker undertake an appropriate level of consultation before making a legislative instrument.

17.              Broad public consultation was undertaken on this instrument for a period of 2 weeks from 28 November to 9 December 2022.

18.              The draft instrument and draft explanatory statement were published to the ATO Legal database. Publication was advertised via the ‘What’s new’ page on that website, and via the ‘Open Consultation’ page on ato.gov.au. Major tax and superannuation publishers and associations monitor these pages and include the details in the daily and weekly alerts and newsletters that they provide to their subscribers and members.

19.              No comments were received as part of this consultation process.

 

Legislative references

Acts Interpretation Act 1901

Human Rights (Parliamentary Scrutiny) Act 2011

Legislation Act 2003

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 (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023

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

This legislative instrument exempts passbook account providers from the requirement in section 16‑155 of Schedule 1 to the Taxation Administration Act 1953 to issue a payment summary in respect of particular payments (those where an amount is required to be withheld in compliance with Subdivision 12‑E (Payments where TFN or ABN not quoted) or Subdivision 12-F (Dividend, interest and royalty payments)). The exemption does not apply in circumstances where a passbook account holder requests a payment summary.

Passbook account providers are generally able to periodically generate payment summaries for investors (which detail amounts subject to withholding) by using statements that they periodically issue to investors. This method is not available in relation to passbook accounts. Without this instrument, passbook account providers would be required to issue separate payment summaries in relation to passbook accounts, which would create an administrative burden for them.

 

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. Holders of passbook savings accounts generally have simple affairs and withholding is rarely required for these account holders.

 

Conclusion

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

Overview

The Taxation Administration (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023 was enacted to address the administrative burden faced by passbook account providers when required to issue payment summaries for passbook savings accounts. This legislative instrument was created under the authority of section 16-180 of Schedule 1 to the Taxation Administration Act 1953, by the Parliament of Australia. The primary objective of this instrument is to exempt passbook account providers from the obligation to issue payment summaries to passbook account holders for certain payments, unless the account holder specifically requests one. This exemption seeks to alleviate the administrative burden on passbook account providers by recognising the simplicity of passbook accounts and the rarity of withholding requirements. The instrument repeals the previous exemption notice (F2012L02333) and replaces it, ensuring a seamless continuation of the exemption.

Scope and Application

The Taxation Administration (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023, made under section 16-180 of Schedule 1 to the Taxation Administration Act 1953, exempts passbook account providers from the requirement to issue payment summaries to holders of passbook savings accounts for certain payments made to those accounts. This exemption applies to passbook account providers, who are entities that issue passbook accounts to their customers, and it concerns the conduct of providing payment summaries for specific payments. The exemption is effective for payments made during a relevant financial year to passbook accounts that were open or in use at any time during that year, regardless of whether they have since been closed, and only if an amount has been withheld under Subdivision 12-E (Payments where TFN or ABN not quoted) or Subdivision 12-F (Dividend, interest and royalty payments) of Schedule 1 to the Act. However, if a passbook account holder specifically requests a payment summary, the exemption does not apply, and the passbook account provider must issue the summary. This instrument has national reach, applicable across Australia, and it replaces the previous exemption notice that is due to sunset on 1 April 2023. This legislative instrument is designed to alleviate the administrative burden on passbook account providers, who do not have the option to include payment summaries in periodic statements as is possible with other types of accounts. The exemption recognises the simplicity of passbook accounts and the rarity of withholdings, while also providing an exception for cases where a summary is requested by the account holder. This exemption does not engage any applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011, as it is minor and machinery in nature, and it does not impose any additional compliance costs. The instrument is compatible with human rights as it does not raise any human rights issues.

Key Provisions

The Taxation Administration (Exemption from Providing Payment Summaries to Passbook Account Holders) Legislative Instrument 2023, made under section 16-180 of Schedule 1 to the Taxation Administration Act 1953 (the Act), provides a specific exemption for passbook account providers from the requirement to issue payment summaries to passbook account holders under certain conditions. This instrument was made to continue the exemption from providing payment summaries to passbook account holders that was previously provided by the Notice of exemption from providing payment summaries to passbook account holders (30/11/2012) (F2012L02333), which is due to sunset on 1 April 2023. The exemption is applicable where the payment summary relates to a payment made to a passbook account issued by the provider during the relevant financial year, and the account must have been open or in use at any time during that year, even if it has since been closed (section 6(a)). Additionally, an amount must have been withheld from this payment under Subdivision 12-E (Payments where TFN or ABN not quoted) or Subdivision 12-F (Dividend, interest and royalty payments) of Schedule 1 to the Act (section 6(b)). However, this exemption does not apply if the passbook account holder has specifically requested a payment summary, in which case the provider must provide it (section 6). This legislative instrument imposes specific obligations on passbook account providers, primarily to not issue a payment summary to a passbook account holder if the conditions in section 6 are met, unless the holder requests one. This is a significant relief for passbook account providers who would otherwise be required to issue separate payment summaries in relation to passbook accounts, creating an administrative burden for them. The instrument also requires that providers comply with the specific criteria outlined in section 6 to avail themselves of the exemption. Under this instrument, passbook account providers are subject to compliance obligations, the primary one being the exemption from providing a payment summary to a passbook account holder if the criteria in section 6 are met. This includes ensuring that the account was open or in use at any time during the relevant financial year and that an amount was withheld from a payment to the account under Subdivision 12-E or Subdivision 12-F of Schedule 1 to the Act. If the account holder requests a payment summary, the provider must comply with this request. The instrument also entails an obligation to provide the requested payment summary when specifically asked by the account holder. The instrument does not impose any penalties or criminal or civil consequences for breaches of its provisions. Instead, its primary function is to provide a regulatory exemption that alleviates an administrative burden on passbook account providers. The legislative instrument does not specify any offences, penalties, or civil/criminal consequences for breach. The instrument is of a minor or machinery nature, designed to provide an exemption that would otherwise impose an administrative burden on passbook account providers without creating significant financial or regulatory consequences for non-compliance. Instead, its purpose is to streamline the process for passbook account providers by exempting them from the need to issue separate payment summaries to passbook account holders under specific conditions, thus facilitating compliance and reducing administrative overhead.

Legal classification tags

Area of Law
Taxation Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Exemptions & Exclusions
Compliance Obligations

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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.