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Australian legislation: Pay As You Go Withholding

03 April 2013   (0 Comments)
Posted by: SAIT Technical
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By Taxvine (Tax Institute Australia)

PAYG Withholding - Variation of withholding for personal services income

Taxation Administration Act 1953 - PAYG Withholding - Variation of withholding for personal services income was made on 15 March 2013 and registered on the Federal Register of Legislative Instruments on 21 March 2013 as Select Instrument 2013 No F2013L00522.

This instrument enables a variation to the amount of withholding required by a payer under the pay as you go withholding system for personal services income payments received by an entity for a certain class of cases specified in the instrument. The withholding is required under Division 13 of Schedule 1 to the Taxation Administration Act 1953 (TAA).

This instrument is required to support the current withholding practice set out in ATO Law Administration Practice Statement PS LA 2003/6 'Administrative arrangements for the calculation of Alienated Personal Services Payments withholding amounts' for personal services income payments being made to this class of cases.

For a copy of the Explanatory Statement, click on the Explanatory Statement tab.

PAYG Withholding - PAYG Withholding Variation: Allowances

Taxation Administration Act 1953 - PAYG Withholding - PAYG Withholding Variation: Allowances was made on 15 March 2013 and registered on the Federal Register of Legislative Instruments on 21 March 2013 as Select Instrument 2013 No F2013L00521.

This instrument enables a variation to the amount of withholding required by a payer under the pay as you go withholding system for allowance payments in a certain class of cases specified in the instrument.

This instrument is required to support ATO policy regarding reporting of deductible expenses. The policy is based on the substantiation rules for car expense payments covered in s 28-35 of the ITAA 1997.

For a copy of the Explanatory Statement, click on the Explanatory Statement tab.

Monthly PAYG instalments for large taxpayers

In media release No 2013/036, issued 25 March 2013, the Assistant Treasurer and Minister Assisting for Deregulation, David Bradbury, announced the release of exposure draft legislation and explanatory materials for consultation on changes to the Pay As You Go (PAYG) system.

The draft legislation will require large corporates to pay their tax instalments monthly rather than quarterly, as announced in the 2012-13 Mid-Year Economic and Financial Outlook (MYEFO).

It is anticipated that this change will be implemented in three stages. Companies that meet or exceed a $1 billion annual turnover threshold will migrate to the new system from 1 January 2014. Companies that meet or exceed annual turnover thresholds of $100 million or $20 million will migrate from 1 January 2015, and 1 January 2016, respectively. To avoid imposing undue compliance burdens, companies with an annual turnover between $20 million and $100 million that are not consolidated for income tax purposes, will not be required to move to monthly PAYG instalments if they pay their GST quarterly or annually.

The closing date for submissions is Monday 15 April 2013.


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