Private ruling: PAYG Withholding
Date of advice: 31 October 2017
Published: March 2018
Ruling period: Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you required to withhold an amount under Division 12 of Schedule 1 to the Taxation Administration Act 1953 (TAA) from an incentive payment made to a person to play at your sporting club, that provides a “Statement by a supplier” form? | A1: No

Relevant facts and circumstances: You are a sporting club. You hope to entice higher grade established players by way of incentive payments to cover travel costs and out of pocket expenses, to play with and coach your existing players to improve their standard of play. These players are not professional players. The higher grade players will be expected to play in your club championships and other tournaments with lower grade players to mentor and help increase their skills. The scheme will commence on 1 January 2018 and run for two years on a trial basis. The players will complete a “Statement by a supplier” form confirming that the activity relates to a private recreational pursuit or hobby.

Relevant legislative provisions: Taxation Administration Act 1953 subsection 12 - 190(4) of Schedule 1 | Taxation Administration Act 1953 subsection 12 - 190(5) of Schedule 1 | Taxation Administration Act 1953 subsection 12 - 190(6) of Schedule 1

Reasons for decision: Summary: You do not need to withhold an amount from a payment if the supplier is an individual and has given you a written statement that states the supply either: ● Relates to a private recreational pursuit or hobby; or ● Is wholly of a private or domestic nature for that supplier However, you should withhold if you have reasonable grounds to believe that the statement supplied is false or misleading. In your case, the individuals will provide a supply to the sporting club in the form of participation in competitions and mentoring other players, in order to improve the standard of current members. The individuals will provide a “Statement by a supplier” form and the supply is made in the course of furtherance of an activity done as a private recreational pursuit or hobby, or it is wholly of a private or domestic nature. If the sporting club has no reason to believe the statement is false or misleading, the sporting club will not be penalised if it is subsequently found that a false or misleading statement was made. Where a supplier does not provide their ABN or a statement that they are not carrying on an enterprise, the payer should withhold 47% of the payment unless one of the exceptions in subsections 12-190(4 ) to (6) of Schedule 1 to the TAA 1953 applies. The onus of making a true statement on the “Statement by a supplier” form is on the supplier and not the club. Ultimately the supplier is making the declaration by supplying the statement. Penalties may be applied to the supplier if the statements made are false or misleading.

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