Taxation Administration Act 1953

s 15D — Reports about recoverable advances and recoverable payments

(1) During the applicable publication period for a reporting period, the Commissioner must publish, in such manner as the Commissioner thinks fit, a report that sets out: (a) both: (i) the number of advances made under subsection 15B(1) during the reporting period; and (ii) the total amount of those advances; and (b) both: (i) the number of payments made under subsection 15C(1) during the reporting period; and (ii) the total amount of those payments. (2) However, a report is not required if: (a) the number mentioned in subparagraph (1)(a)(i) is zero; and (b) the number mentioned in subparagraph (1)(b)(i) is zero. Deferred reporting (3) Paragraph (1)(b) of this section does not require a report to deal with a payment unless, before the preparation of the report, an Australian Taxation Office official was aware the payment was made under subsection 15C(1). (4) For the purposes of this section, if: (a) a payment was made under subsection 15C(1) in a reporting period; and (b) because of subsection (3) of this section, paragraph (1)(b) of this section did not require a report to deal with the payment; and (c) during a later reporting period, an Australian Taxation Office official becomes aware that the payment was made under subsection 15C(1); the payment is subject to a deferred reporting obligation in relation to the later reporting period. (5) If one or more payments made under subsection 15C(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Commissioner must, during the applicable publication period for the later reporting period: (a) prepare a report that sets out: (i) the number of those payments; and (ii) the total amount of those payments; and (iii) the reporting period during which the payments were made; and (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and (c) if paragraph (b) does not apply—publish, in such manner as the Commissioner thinks fit, the paragraph (a) report. Reporting period (6) For the purposes of this section, a reporting period is: (a) a financial year; or (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period. Applicable publication period (7) For the purposes of this section, the applicable publication period for a reporting period is the period of: (a) 4 months; or (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months; beginning immediately after the end of the reporting period. Australian Taxation Office official (8) For the purposes of this section, Australian Taxation Office official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013 ) of the Australian Taxation Office.

Amendment history: Inserted by No 82 of 2012, effective sch 1 (item 124): 29 June 2012 | Amended by No 36 of 2015, effective sch 5 (items 69 ‑ 72, 74 ‑ 77), sch 7: 14 Apr 2015 (s 2)

s 16 — Payments out of Consolidated Revenue Fund

(1) Where the Commissioner is required or permitted to pay an amount to a person by or under a provision of a taxation law other than: (a) a general administration provision; or (b) a provision prescribed for the purposes of this paragraph; the amount is payable out of the Consolidated Revenue Fund, which is appropriated accordingly. (2) Where: (a) an amount is required or permitted to be paid to a person: (i) by or under a provision of a taxation law other than: (A) a general administration provision; or (B) a provision prescribed for the purposes of this sub ‑ subparagraph; or (ii) by way of the repayment, whether in whole or in part, to the person of an amount paid to the Commonwealth; (b) except as mentioned in paragraph (c), there is no provision of a taxation law by or under which the Commissioner is required or permitted to pay the amount; and (c) the Commissioner is required or permitted to pay the amount by or under a general administration provision; the amount shall be taken, for the purposes of subsection (1), to be an amount that the Commissioner is required or permitted to pay to the person by or under a provision of a taxation law of the kind referred to in that subsection. (3) In this section, general administration provision means a provision of a taxation law that provides that the Commissioner has the general administration of the taxation law.

Amendment history: Repealed by No 216 of 1973, effective 31 Dec 1973 | Inserted by No 123 of 1984, effective s 1, 2: Royal Assent s 319(1): 14 Feb 1983 ( see s 2(2)) Remainder: 14 Dec 1984 | Amended by No 8 of 2005, effective s 4, sch 1 (items 426, 496): Royal Assent

s 16A — Regulations may provide for methods of payment of tax liabilities etc.

(1) This section applies to a liability to or of the Commonwealth arising under, or by virtue of, any of the following laws: (a) this Act; (b) any other Act of which the Commissioner has the general administration; (c) regulations under an Act covered by paragraph (a) or (b). (2) The regulations may make provision for and in relation to the methods by which the amount of the liability may be paid. (3) Without limiting subsection (2), the regulations may make provision for and in relation to the making of payments using: (a) collection agents; or (b) electronic funds transfer systems; or (c) credit cards; or (d) debit cards.

Amendment history: Inserted by No 224 of 1992, effective s 122 ‑ 126: 24 Dec 1992 (s 2(1))

s 16B — Certain liabilities to be reduced to nearest multiple of 5 cents

If the amount of a tax ‑ related liability that arises by way of penalty or because it is assessed by the Commissioner (other than an RBA deficit or a liability to pay the general interest charge) is not a multiple of 5 cents, the amount is decreased to the nearest multiple of 5 cents.

Amendment history: Inserted by No 120 of 1995, effective sch 1 (item 58): 23 Nov 1994 ( see s 2(2)) sch 2 (items 8 ‑ 13): 1 July 1994 Remainder: Royal Assent | Amended by No 11 of 1999, effective sch 1 (items 346 ‑ 352): 1 July 1999 (s 2(3)) | Repealed and substituted by No 91 of 2000, effective sch 1, sch 2 (items 68 ‑ 120, 142A, 143, 144): 1 July 2000 (s 3(1)) sch 3 (items 1 ‑ 16): 22 Dec 1999 (s 3(4))

s 17 — Powers of taxation officers in relation to references to currency etc.

(1) In this section: decimal currency means the currency provided for by the Currency Act 1965 . law of the Commonwealth has the same meaning as in section 10 of the Currency Act 1965 . officer includes the Commissioner and a Second Commissioner. taxation law means any law of the Commonwealth of which the Commissioner has the general administration. the previous currency means the currency provided for by the Coinage Act 1909 . (2) An officer may, in the exercise of, or for the purpose of exercising, any power under a taxation law or in the performance of, or for the purpose of performing, any function under a taxation law: (a) treat: (i) a reference in a law of the Commonwealth; (ii) a reference in a bill of exchange, promissory note, security for money, contract or agreement (whether the contract or agreement is in writing or not), deed or other instrument; or (iii) a reference in any other manner; to an amount of money in the previous currency as a reference to a corresponding amount of money in decimal currency and treat such a reference to an amount of money in decimal currency as a reference to a corresponding amount of money in the previous currency; (b) treat an amount of money in the previous currency as a corresponding amount of money in decimal currency and treat an amount of money in decimal currency as a corresponding amount of money in the previous currency; and (c) express an amount of money in either decimal currency or the previous currency. (3) For the purposes of paragraphs (2)(a), (b) and (c): (a) the amount of money in decimal currency that corresponds with an amount of money in the previous currency; and (b) the amount of money in the previous currency that corresponds with an amount of money in decimal currency; shall be calculated on the basis of the equivalents specified in subsection 8(4) of the Currency Act 1965 .

Amendment history: Inserted by No 155 of 1965, effective 14 Feb 1966 | Amended by No 123 of 1984, effective s 1, 2: Royal Assent s 319(1): 14 Feb 1983 ( see s 2(2)) Remainder: 14 Dec 1984 | Amended by No 65 of 1985, effective sch 1: 3 July 1985 (s 2(1)) sch 1: 14 Dec 1984 (s 2(45))

s 17A — Powers of Federal Court and Federal Circuit and Family Court of Australia (Division 2) in respect of taxation matters

(1) The Federal Court of Australia shall not, in relation to a review by the Court of a decision of the Tribunal in connection with proceedings under a taxation law, exercise a power conferred on it by section 15, or paragraph 16(1)(d), (2)(b) or (3)(c) or subsection 16(4), of the Administrative Decisions (Judicial Review) Act 1977 so as to prevent or restrain the recovery, under that law, of tax or duty, further tax or further duty or additional tax or additional duty. (2) The Federal Circuit and Family Court of Australia (Division 2) must not, in relation to a review by the Court of a decision of the Tribunal in connection with proceedings under a taxation law, exercise a power conferred on it by section 15A, or paragraph 16(1)(d), (2)(b) or (3)(c) or subsection 16(4), of the Administrative Decisions (Judicial Review) Act 1977 so as to prevent or restrain the recovery, under that law, of: (a) tax or duty; or (b) further tax or further duty; or (c) additional tax or additional duty.

Amendment history: Inserted by No 48 of 1986, effective s 31, Parts VII, VIII (s 45 ‑ 56): 24 June 1986 ( see s 2(2)) Remainder: 1 July 1986 | Amended by No 194 of 1999, effective sch 24: 23 Dec 1999 (s 2(1)) | Amended by No 13 of 2013, effective sch 1 (items 510, 511): 12 Apr 2013 (s 2(1) item 2) | Amended by No 13 of 2021, effective sch 2 (items 750 ‑ 760): 1 Sept 2021 (s 2(1) item 5)

s 18 — Regulations

The Governor ‑ General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to this Act, and, in particular, prescribing penalties not exceeding a fine of 5 penalty units for offences against the regulations.

Amendment history: Inserted by No 133 of 1974, effective s 1, 2: Royal Assent s 3, 4, 7, 8, 10 ‑ 12: 23 Dec 1974 ( see Gazette 1974, No. 103D) Remainder: 1 July 1976 ( see Gazette 1976, No. S107) | Amended by No 19 of 1979, effective Parts II ‑ XVII (s 3 ‑ 123): 15 May 1979 ( see Gazette 1979, No. S86) Remainder: Royal Assent | Amended by No 123 of 1984, effective s 1, 2: Royal Assent s 319(1): 14 Feb 1983 ( see s 2(2)) Remainder: 14 Dec 1984 | Amended by No 48 of 1986, effective s 31, Parts VII, VIII (s 45 ‑ 56): 24 June 1986 ( see s 2(2)) Remainder: 1 July 1986 | Amended by No 58 of 2006, effective sch 7 (items 131 ‑ 169, 217 ‑ 219): 22 June 2006 (s 2(1) items 6, 24)

s 6-1 — What Parts 2 ‑ 5 and 2 ‑ 10 are about

To help taxpayers meet their annual income tax liability, they are required to pay amounts of their income at regular intervals as it is earned during the year. The system for collecting these amounts is called “Pay as you go”. Amounts collected under this system also go towards meeting liability for Medicare levy and liability to repay debts under certain income ‑ contingent loan schemes. Table of sections 6 ‑ 5 The Pay as you go (PAYG) system 6 ‑ 10 How the amounts collected are dealt with

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 44 of 2000, effective sch 1, sch 3 (items 55 ‑ 67), sch 4 (items 17 ‑ 48): 22 Dec 1999 (s 2(1)) sch 2 (item 12): 1 Apr 2000 (s 2(2)) sch 3 (item 68): 1 July 2000 (s 2(8)) | Amended by No 150 of 2003, effective sch 2 (items 152 ‑ 160): 1 Jan 2004 (s 2(1) item 16) | Amended by No 82 of 2014, effective sch 1 (items 8 ‑ 24): 18 July 2014 (s 2(1) item 2) | Amended by No 169 of 2015, effective sch 1 (items 82 ‑ 99, 111): 1 Jan 2016 (s 2(1) item 2)

s 6-5 — The Pay as you go (PAYG) system

(1) Parts 2 ‑ 5 and 2 ‑ 10 establish the PAYG system, which has 2 components: • PAYG withholding (Part 2 ‑ 5) • PAYG instalments (Part 2 ‑ 10). PAYG withholding (2) Under PAYG withholding, amounts are collected in respect of particular kinds of payments or transactions. Usually, someone who makes a payment to you is required to withhold an amount from the payment, and then to pay the amount to the Commissioner. For a list of the payments and other transactions to which PAYG withholding applies, see Division 10 PAYG instalments (3) You pay PAYG instalments directly to the Commissioner. These are usually based on your GDP ‑ adjusted notional tax or your ordinary income for a past period, but excluding: • income subject to PAYG withholding (with certain exceptions) • exempt income, or income that is otherwise not assessable. An instalment is usually paid after a quarter, but some taxpayers are eligible to pay an annual instalment after the end of the income year.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 73 of 2001, effective sch 1 (items 21, 22, 58 ‑ 62(1)), sch 2 (items 1 ‑ 40, 53, 86 ‑ 95(1)), sch 3 (items 20 ‑ 33), sch 4 (items 1, 10), sch 5: 30 June 2001 (s 2(1)) sch 2 (items 48 ‑ 52): 1 Jan 2001 (s 2(2)) sch 3 (items 35, 36): 1 Apr 2001 (s 2(3))

s 6-10 — How the amounts collected are dealt with

You are entitled to credits for the amounts of your income that are collected under the PAYG system. The credits are applied under Division 3 of Part IIB against your tax debts, and any excess is refunded to you.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 10-1 — What this Part is about

Under PAYG withholding, amounts are collected in respect of particular kinds of payments or transactions. Usually, someone who makes a payment to you is required to withhold an amount from the payment, and then to pay the amount to the Commissioner. If the payment is personal services income that is included in the assessable income of someone else under Division 86 of the Income Tax Assessment Act 1997 , the payer must pay such an amount to the Commissioner at a later date. If a non ‑ cash benefit is provided instead of a payment, the provider must first pay to the Commissioner the amount that would have been withheld from the payment. This Part also contains provisions about the obligations and rights of payers and recipients.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 86 of 2000, effective sch 1 (items 26A, 26B, 27 ‑ 58): 30 June 2000 (s 2(1))

s 10-5 — Summary of withholding payments

(1) The payments and other transactions covered by PAYG withholding are called withholding payments. They are summarised in the table. Note: The obligation to pay an amount to the Commissioner is imposed on the entity making the withholding payment (except for items 17, 19, 22 and 27, and 26 (to the extent that it covers subsection 12 ‑ 390(4))). Summary of withholding payments Item Withholding payment Section 1 A payment of salary etc. to an employee 12 ‑ 35 2 A payment of remuneration to the director of a company 12 ‑ 40 3 A payment of salary etc. to an office holder (e.g. a member of the Defence Force) 12 ‑ 45 3A a payment to a * religious practitioner 12 ‑ 47 4 A return to work payment to an individual 12 ‑ 50 5 A payment that is covered by a voluntary agreement 12 ‑ 55 6 A payment under a labour hire arrangement or a payment specified by regulations 12 ‑ 60 7 A * superannuation income stream or an annuity 12 ‑ 80 8 A * superannuation lump sum or a payment for termination of employment 12 ‑ 85 9 An unused leave payment 12 ‑ 90 10 A social security or similar payment (e.g. old age pension) 12 ‑ 110 11 A Commonwealth education or training payment 12 ‑ 115 12 A compensation, sickness or accident payment 12 ‑ 120 13 A payment arising from an investment where the recipient does not quote its tax file number, or in some cases, its ABN 12 ‑ 140 14 Investor becoming presently entitled to income of a unit trust 12 ‑ 145 14A A trustee of a closely held trust distributing an amount from the trust income to a beneficiary, where the beneficiary does not quote its tax file number 12 ‑ 175 14B A beneficiary of a closely held trust becoming presently entitled to income of the trust, where the beneficiary does not quote its tax file number 12 ‑ 180 15 A payment for a supply where the recipient of the payment does not quote its ABN 12 ‑ 190 16 A dividend payment to an overseas person 12 ‑ 210 17 A dividend payment received for a foreign resident 12 ‑ 215 18 An interest payment to an overseas person 12 ‑ 245 19 An interest payment received for a foreign resident 12 ‑ 250 20 An interest payment derived by a lender in carrying on business through overseas permanent establishment 12 ‑ 255 21 A royalty payment to an overseas person 12 ‑ 280 22 A royalty payment received for a foreign resident 12 ‑ 285 22A A departing Australia superannuation payment 12 ‑ 305 22AA An * excess untaxed roll ‑ over amount 12 ‑ 312 22B A payment (of a kind set out in the regulations) to a foreign resident 12 ‑ 315 22C A payment (of a kind set out in the regulations) received for a foreign resident 12 ‑ 317 22D A payment of salary, wages etc. to an employee under a labour mobility program 12 ‑ 319A 23 A mining payment 12 ‑ 320 24 A natural resource payment 12 ‑ 325 25 A payment by a withholding MIT 12 ‑ 385 26 A payment by a * custodian or other entity 12 ‑ 390 27 A payment under the * first home super saver scheme 12 ‑ 460 (2) These can also be treated as withholding payments: (aa) a payment that arises because of the operation of section 12A ‑ 205 (see Division 12A); (a) alienated personal services payments (see Division 13); (b) non ‑ cash benefits, and capital proceeds involving foreign residents and certain kinds of taxable Australian property (see Division 14). Note: The obligation to pay an amount to the Commissioner is imposed on the entity receiving the alienated personal services payment or providing the non ‑ cash benefit or capital proceeds.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 86 of 2000, effective sch 1 (items 26A, 26B, 27 ‑ 58): 30 June 2000 (s 2(1)) | Amended by No 168 of 2001, effective sch 2: 1 July 2000 Remainder: Royal Assent | Amended by No 15 of 2002, effective 4 Apr 2002 | Amended by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent | Amended by No 9 of 2007, effective sch 1 (items 19 ‑ 24), sch 2 (items 4, 5), sch 4 (items 11 ‑ 16), sch 5 (items 31 ‑ 36): 15 Mar 2007 (s 2(1) items 2 ‑ 8) | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12) | Amended by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Amended by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 56 of 2010, effective s 4(2), sch 3 (items 9, 10(1), (5)), sch 5 (items 191 ‑ 193), sch 6 (items 12 ‑ 14, 27 ‑ 36, 44 ‑ 53, 110, 111, 116, 159, 160): 3 June 2010 (s 2(1) items 1, 7, 11, 15, 20, 23) sch 1 (item 8): 17 Dec 2010 (s 2(1) item 4) sch 2 (items 3, 4), sch 6 (items 58 ‑ 97, 101 ‑ 105): 4 June 2010 (s 2(1) items 6, 16, 17) | Amended by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010 | Amended by No 58 of 2012, effective sch 1 (items 8 ‑ 28): 21 June 2012 ( see s 2(1)) | Amended by No 10 of 2016, effective sch 2 (item 31): 5 May 2016 (s 2(1) item 5) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 132 of 2017, effective sch 1 (items 1 ‑ 5, 13 ‑ 20): 1 July 2018 (s 2(1) item 2) sch 2 (items 6, 7): 1 Jan 2018 (s 2(1) item 3) | Amended by No 75 of 2022, effective sch 2 (items 2 ‑ 4): 6 Dec 2022 (s 2(1) item 3) sch 4 (items 23 ‑ 38): 1 July 2022 (s 2(1) item 4)

s 11-1 — Object of this Part

The object of this Part is to ensure the efficient collection of: (a) income tax; and (b) * Medicare levy; and (ca) amounts of liabilities to the Commonwealth under Chapter 4 of the Higher Education Support Act 2003 ; and (caa) amounts of liabilities to the Commonwealth under Part 3A of the VET Student Loans Act 2016 ; and (cb) amounts of liabilities to the Commonwealth under Chapter 2AA of the Social Security Act 1991 ; and (cc) amounts of liabilities to the Commonwealth under Part 2 of the Student Assistance Act 1973 ; and (cd) amounts of liabilities to the Commonwealth under Chapter 3 of the Australian Apprenticeship Support Loans Act 2014 ; and (da) amounts of liabilities to the Commonwealth under Part 2B.3 of the Social Security Act 1991 ; and (db) amounts of liabilities to the Commonwealth under Division 6 of Part 4A of the Student Assistance Act 1973 ; and (d) * withholding tax; and (e) * mining withholding tax; and (f) * TFN withholding tax; and (h) * petroleum resource rent tax.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 44 of 2000, effective sch 1, sch 3 (items 55 ‑ 67), sch 4 (items 17 ‑ 48): 22 Dec 1999 (s 2(1)) sch 2 (item 12): 1 Apr 2000 (s 2(2)) sch 3 (item 68): 1 July 2000 (s 2(8)) | Amended by No 150 of 2003, effective sch 2 (items 152 ‑ 160): 1 Jan 2004 (s 2(1) item 16) | Amended by No 101 of 2006, effective sch 3, 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 56 of 2010, effective s 4(2), sch 3 (items 9, 10(1), (5)), sch 5 (items 191 ‑ 193), sch 6 (items 12 ‑ 14, 27 ‑ 36, 44 ‑ 53, 110, 111, 116, 159, 160): 3 June 2010 (s 2(1) items 1, 7, 11, 15, 20, 23) sch 1 (item 8): 17 Dec 2010 (s 2(1) item 4) sch 2 (items 3, 4), sch 6 (items 58 ‑ 97, 101 ‑ 105): 4 June 2010 (s 2(1) items 6, 16, 17) | Amended by No 12 of 2012, effective sch 6 (items 27 ‑ 29): 22 Dec 1999 (s 2(1) item 11) sch 6 (items 84 ‑ 93, 186, 187, 191, 192, 212, 213, 218, 241 ‑ 246, 248 ‑ 251): 21 Mar 2012 (s 2(1) items 14, 31) sch 6 (item 182): 3 Oct 2008 (s 2(1) item 30) | Amended by No 14 of 2012, effective sch 1, sch 2 (items 1 ‑ 9): 1 July 2012 (s 2(1) items 2, 3) sch 2 (items 17 ‑ 28): never commenced (s 2(1) item 4) | Amended by No 88 of 2013, effective sch 5 (items 22 ‑ 27): 1 July 2013 (s 2(1) item 10) sch 6 (items 44 ‑ 48, 66): 29 June 2013 (s 2(1) item 14) sch 7 (items 167 ‑ 183): 1 July 2012 (s 2(1) item 11) sch 7 (item 225): 28 June 2013 (s 2(1) item 23) | Amended by No 82 of 2014, effective sch 1 (items 8 ‑ 24): 18 July 2014 (s 2(1) item 2) | Amended by No 96 of 2014, effective sch 1 (items 54 ‑ 108, 122 ‑ 124), sch 2 (items 41 ‑ 43): 30 Sept 2014 (s 2(1) item 2, F2014L01256) | Amended by No 169 of 2015, effective sch 1 (items 82 ‑ 99, 111): 1 Jan 2016 (s 2(1) item 2) | Amended by No 116 of 2018, effective sch 1 (items 47 ‑ 60): 1 July 2019 (s 2(1) items 10 ‑ 12) | Amended by No 61 of 2023, effective sch 1 (items 137 ‑ 148, 156 ‑ ‑ 165): 1 Jan 2024 (s 2(1) item 1)

s 11-5 — Constructive payment

(1) In working out whether an entity has paid an amount to another entity, and when the payment is made, the amount is taken to have been paid to the other entity when the first entity applies or deals with the amount in any way on the other’s behalf or as the other directs. (2) An amount is taken to be payable by an entity to another entity if the first entity is required to apply or deal with it in any way on the other’s behalf or as the other directs.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-1 — General exceptions

Exempt income of recipient (1) An entity need not withhold an amount under section 12 ‑ 35, 12 ‑ 40, 12 ‑ 45, 12 ‑ 47, 12 ‑ 50, 12 ‑ 55, 12 ‑ 60, 12 ‑ 80, 12 ‑ 85, 12 ‑ 90, 12 ‑ 120 or 12 ‑ 190 from a payment if the whole of the payment is * exempt income of the entity receiving the payment. Non ‑ assessable non ‑ exempt income of recipient (1A) An entity need not withhold an amount under Subdivision 12 ‑ B, Subdivision 12 ‑ C or section 12 ‑ 120 or 12 ‑ 190 from a payment if the whole of the payment is not assessable income and is not * exempt income of the entity receiving the payment. Living ‑ away ‑ from ‑ home allowance benefit (2) In working out how much to withhold under section 12 ‑ 35, 12 ‑ 40, 12 ‑ 45, 12 ‑ 47, 12 ‑ 115, 12 ‑ 120, 12 ‑ 315 or 12 ‑ 317 from a payment, disregard so much of the payment as is a living ‑ away ‑ from ‑ home allowance benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986 . Expense payment benefit (3) In working out how much to withhold under section 12 ‑ 35, 12 ‑ 40, 12 ‑ 45, 12 ‑ 47, 12 ‑ 115, 12 ‑ 120, 12 ‑ 315 or 12 ‑ 317 from a payment, disregard so much of the payment as: (a) is an expense payment benefit as defined by section 136 of the Fringe Benefits Tax Assessment Act 1986 ; and (b) is not an exempt benefit under section 22 of that Act (about reimbursement of car expenses on the basis of distance travelled). Capped defined benefit income stream (4) This section does not apply in relation to a payment if the whole of the payment is a * superannuation income stream benefit that is paid from a * capped defined benefit income stream. Note: For withholding amounts from a superannuation income stream, see section 12 ‑ 80.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 168 of 2001, effective sch 2: 1 July 2000 Remainder: Royal Assent | Amended by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12) | Amended by No 92 of 2008, effective sch 1 (items 24 ‑ 26), sch 2 (items 41, 42): 1 Oct 2008 | Amended by No 70 of 2015, effective sch 1 (items 151 ‑ 174, 195 ‑ 205): 1 July 2015 (s 2(1) items 3, 6) sch 6 (items 51 ‑ 59): 25 June 2015 (s 2(1) item 17) | Amended by No 81 of 2016, effective sch 1 (items 10 ‑ 25, 33, 36), sch 2 (items 19, 20), sch 10 (items 55 ‑ 65, 86 ‑ 93): 1 Jan 2017 (s 2(1) items 2, 6) sch 10 (items 1, 29 ‑ 47, 49 ‑ 54): 1 July 2018 (s 2(1) item 5)

s 12-5 — What to do if more than one provision requires a withholding

(1) If more than one provision in this Division covers a payment, only one amount is to be withheld from the payment. (2) The provision to apply is the one that is most specific to the circumstances of the payment. However, this general rule is subject to the specific rules in the table, and the specific rule in subsection (3). Specific rules for determining priority among withholding provisions Item Apply: Which is about: In priority to: 1AA section 12 ‑ 385 or 12 ‑ 390 distributions to foreign residents from * withholding MITs each other withholding provision 1 section 12 ‑ 35, 12 ‑ 40, 12 ‑ 45, 12 ‑ 47 or 12 ‑ 50 a payment for work or services section 12 ‑ 60 (payment under a labour hire arrangement or specified by regulations); or section 12 ‑ 190 (payment for a supply where recipient does not quote its ABN) 1A section 12 ‑ 35 or 12 ‑ 45 a payment for work or services section 12 ‑ 47 (a payment to a * religious practitioner) 2 section 12 ‑ 80, 12 ‑ 85 or 12 ‑ 90 a * superannuation benefit, an annuity, a payment for termination of employment or an unused leave payment section 12 ‑ 60 (payment under a labour hire arrangement or specified by regulations); or section 12 ‑ 190 (payment for a supply where recipient does not quote its ABN) 3 section 12 ‑ 110, 12 ‑ 115 or 12 ‑ 120 a payment of benefit or compensation section 12 ‑ 60 (payment under a labour hire arrangement or specified by regulations); or section 12 ‑ 190 (payment for a supply where recipient does not quote its ABN) 4 section 12 ‑ 60 a payment under a labour hire arrangement or specified by regulations section 12 ‑ 190 (payment for a supply where recipient does not quote its ABN) 5 section 12 ‑ 140 or 12 ‑ 145 a payment arising from investment where the recipient does not quote tax file number section 12 ‑ 175 or 12 ‑ 180 (Payment of income of closely held trust where TFN not quoted) or section 12 ‑ 210, 12 ‑ 215, 12 ‑ 245, 12 ‑ 250 or 12 ‑ 255 (payment of a dividend or interest) 6 section 12 ‑ 280 or 12 ‑ 285 a payment of royalty section 12 ‑ 325 (natural resource payment) (3) Apply a provision in this Division (apart from a provision in Subdivision 12 ‑ FB) that covers a payment in priority to a provision in Subdivision 12 ‑ FB that also covers the payment. Note: Some provisions of this Division clearly do not cover a payment covered by some other provisions. For example: Section 12 ‑ 55 (about voluntary agreements) covers a payment only if no other provision requires the payer to withhold an amount from the payment.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 168 of 2001, effective sch 2: 1 July 2000 Remainder: Royal Assent | Amended by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12) | Amended by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Amended by No 56 of 2010, effective s 4(2), sch 3 (items 9, 10(1), (5)), sch 5 (items 191 ‑ 193), sch 6 (items 12 ‑ 14, 27 ‑ 36, 44 ‑ 53, 110, 111, 116, 159, 160): 3 June 2010 (s 2(1) items 1, 7, 11, 15, 20, 23) sch 1 (item 8): 17 Dec 2010 (s 2(1) item 4) sch 2 (items 3, 4), sch 6 (items 58 ‑ 97, 101 ‑ 105): 4 June 2010 (s 2(1) items 6, 16, 17) | Amended by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010 | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12-7 — Division does not apply to alienated personal services payments

(1) This Division (other than the provisions mentioned in subsection (2)) does not apply to a payment in so far as the payment: (a) is an * alienated personal services payment; or (b) was received, by the entity making the payment, as an * alienated personal services payment. Note: An entity that receives an alienated personal services payment may be obliged to pay an amount to the Commissioner: see Division 13. (2) The provisions are: (a) Subdivision 12 ‑ FB; and (b) any other provisions in this Division to the extent that they apply in relation to that Subdivision.

Amendment history: Inserted by No 86 of 2000, effective sch 1 (items 26A, 26B, 27 ‑ 58): 30 June 2000 (s 2(1)) | Amended by No 20 of 2004, effective sch 6: 1 July 2000 Remainder: Royal Assent

s 12-10 — Division does not apply to non ‑ cash benefits

This Division does not apply to a payment in so far as it consists of providing a * non ‑ cash benefit. Note: If a non ‑ cash benefit is provided in circumstances where a payment would give rise to a withholding obligation, the provider must pay an amount to the Commissioner: see Division 14.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-20 — Application of Division and regulations to non ‑ share dividends

This Division and the regulations made for the purposes of this Division: (a) apply to a non ‑ share equity interest in the same way as it applies to a share; and (b) apply to an equity holder in the same way as it applies to a shareholder; and (c) apply to a non ‑ share dividend in the same way as it applies to a dividend.

Amendment history: Inserted by No 163 of 2001, effective 1 July 2001

s 12-35 — Payment to employee

An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-40 — Payment to company director

A company must withhold an amount from a payment of remuneration it makes to an individual: (a) if the company is incorporated—as a director of the company, or as a person who performs the duties of a director of the company; or (b) if the company is not incorporated—as a member of the committee of management of the company, or as a person who performs the duties of such a member. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-45 — Payment to office holder

(1) An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as: (a) a member of an * Australian legislature; or (b) a person who holds, or performs the duties of, an appointment, office or position under the Constitution or an * Australian law; or (c) a member of the Defence Force, or of a police force of the Commonwealth, a State or a Territory; or (d) a person who is otherwise in the service of the Commonwealth, a State or a Territory; or (e) a member of a * local governing body where there is in effect, in accordance with section 446 ‑ 5, a unanimous resolution by the body that the remuneration of members of the body be subject to withholding under this Part. For exceptions, see section 12 ‑ 1. (2) This section does not require an amount to be withheld from a payment to an individual as a member of a * local governing body unless it is one to which paragraph (1)(e) applies.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 101 of 2006, effective sch 3, 4: 1 Jan 2008 Remainder: Royal Assent

s 12-47 — Payment to religious practitioners

An entity must withhold an amount from a payment it makes to a * religious practitioner for an activity, or a series of activities, if: (a) the activity, or series of activities, is done by the religious practitioner in pursuit of his or her vocation as a religious practitioner; and (b) the activity, or series of activities, is done by the religious practitioner as a member of a religious institution; and (c) the payment is made by the entity in the course or furtherance of an * enterprise that the entity * carries on.

Amendment history: Inserted by No 168 of 2001, effective sch 2: 1 July 2000 Remainder: Royal Assent | Amended by No 41 of 2005, effective sch 1 (items 12, 13), sch 10 (items 233 ‑ 241, 275): Royal Assent

s 12-50 — Return to work payment

An entity must withhold an amount from a payment it makes to an individual if the payment is included in the individual’s assessable income under section 15 ‑ 3 of the Income Tax Assessment Act 1997 (return to work payments). For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-55 — Voluntary agreement to withhold

(1) An entity must withhold an amount from a payment it makes to an individual if: (a) the payment is made under an * arrangement the performance of which, in whole or in part, involves the performance of work or services (whether or not by the individual); and (b) no other provision of this Division requires the entity to withhold an amount from the payment; and (c) the entity and the individual are parties to an agreement (the voluntary agreement ) that is in the * approved form and states that this section covers payments under the arrangement mentioned in paragraph (a), or under a series of such arrangements that includes that arrangement; and (d) the individual has an * ABN that is in force and is * quoted in that agreement. For exceptions, see section 12 ‑ 1. (2) Each party must keep a copy of the voluntary agreement from when it is made until 5 years after the making of the last payment covered by the agreement. Penalty: 30 penalty units. Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit. (2A) An offence under subsection (2) is an offence of strict liability. Note: For strict liability , see section 6.1 of the Criminal Code . (3) A party to the voluntary agreement may terminate it at any time by notifying the other party in writing.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 146 of 2001, effective s 4, sch 3: 15 Dec 2001 (s 2(1))

s 12-60 — Payment under labour hire arrangement, or specified by regulations

(1) An entity that * carries on an * enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if: (a) the enterprise is a * business of arranging for persons to perform work or services directly for clients of the entity, or the enterprise includes a business of that kind that is not merely incidental to the main activities of the enterprise; and (b) the payment is made under an * arrangement the performance of which, in whole or in part, involves the performance of work or services by the individual directly for a client of the entity, or directly for a client of another entity. For exceptions, see section 12 ‑ 1. Example 1: Staffprovider Ltd keeps a database of skilled persons who are willing for their services to be provided to third parties. Staffprovider arranges with Corporate Pty Ltd to provide to it the services of a computer programmer in return for payment. Staffprovider arranges with Jane for her to do computer programming for Corporate. Staffprovider must withhold amounts under this section from payments it makes to Jane under the arrangement with her. Example 2: Ian is a solicitor who regularly briefs barristers to represent his clients. Briefing barristers is merely incidental to Ian’s main activities as a solicitor, so he does not have to withhold amounts under this section from payments he makes to barristers. (2) An entity that carries on an * enterprise must withhold an amount from a payment that it makes to an individual in the course or furtherance of the enterprise if the payment is, in whole or in part, for work or services and is of a kind prescribed by the regulations. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Repealed and substituted by No 179 of 1999, effective sch 1 (items 1 ‑ 4, 7, 8), sch 2 (items 1 ‑ 4, 86 ‑ 93, 103 ‑ 107, 130, 131), sch 3 (items 1, 2), sch 4, sch 5 (items 69, 73, 74), sch 6 (items 14 ‑ 24), sch 10 (items 1 ‑ 18), sch 12 (item 21), sch 14: 22 Dec 1999 (s 2(1) ‑ (6), (7)(b), (c)) sch 2 (items 94 ‑ 102), sch 11 (items 111, 112), sch 12 (items 4 ‑ 20), sch 15 (items 9 ‑ 18): 1 July 2000 (s 2(8), (9)(b), (12)) | Amended by No 91 of 2000, effective sch 1, sch 2 (items 68 ‑ 120, 142A, 143, 144): 1 July 2000 (s 3(1)) sch 3 (items 1 ‑ 16): 22 Dec 1999 (s 3(4)) | Amended by No 41 of 2005, effective sch 1 (items 12, 13), sch 10 (items 233 ‑ 241, 275): Royal Assent

s 12-80 — Superannuation income streams and annuities

An entity must withhold an amount from any of the following payments it makes to an individual: (a) a * superannuation income stream; (b) an * annuity. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 8 of 2007, effective sch 1 (item 25): 22 Dec 1999 (s 2(1) item 21) sch 4 (item 32): 15 Mar 2007 (s 2(1) item 44) | Repealed and substituted by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12)

s 12-85 — Superannuation lump sums and payments for termination of employment

An entity must withhold an amount from any of the following payments it makes to an individual: (a) a * superannuation lump sum; (b) a payment that is an * employment termination payment or would be one except that it is received more than 12 months after termination of employment. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Repealed and substituted by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12) | Amended by No 56 of 2010, effective s 4(2), sch 3 (items 9, 10(1), (5)), sch 5 (items 191 ‑ 193), sch 6 (items 12 ‑ 14, 27 ‑ 36, 44 ‑ 53, 110, 111, 116, 159, 160): 3 June 2010 (s 2(1) items 1, 7, 11, 15, 20, 23) sch 1 (item 8): 17 Dec 2010 (s 2(1) item 4) sch 2 (items 3, 4), sch 6 (items 58 ‑ 97, 101 ‑ 105): 4 June 2010 (s 2(1) items 6, 16, 17)

s 12-90 — Unused leave payments

An entity must withhold an amount from any of the following payments it makes to an individual: (a) an * unused annual leave payment; (b) an * unused long service leave payment, to the extent that the payment is included in the individual’s assessable income. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Repealed and substituted by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12)

s 12-110 — Social Security or other benefit payment

(1) An entity must withhold an amount from a payment it makes to an individual if the payment is: (a) specified in an item of the table in section 52 ‑ 10 of the Income Tax Assessment Act 1997 (Social Security payments); or (b) specified in an item of the table in section 52 ‑ 65 of that Act (Veterans’ Affairs payments); or (ba) specified in an item of the table in section 52 ‑ 114 of that Act (Military Rehabilitation and Compensation Act payments); or (c) specified in section 52 ‑ 105, 53 ‑ 10, 55 ‑ 5 or 55 ‑ 10 of that Act; or Note: Payments specified in those provisions of the Income Tax Assessment Act 1997 are made under various Commonwealth laws. (ca) * parental leave pay. (2) In working out the amount to be withheld, disregard so much of the payment as is * exempt income of the individual.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 76 of 2000, effective 28 June 2000 | Amended by No 52 of 2004, effective s 1 ‑ 3: Royal Assent Remainder: 1 July 2004 ( see s 2(1)) | Amended by No 105 of 2010, effective sch 1 (items 71 ‑ 82), sch 2 (items 1, 2): 1 Oct 2010 (s 2(1) items 11, 14) sch 1 (item 83): 17 Dec 2010 (s 2(1) item 12) | Amended by No 109 of 2012, effective sch 1 (items 114 ‑ 119): 1 Oct 2012 (s 2(1) item 2) | Amended by No 4 of 2023, effective sch 2 (items 27 ‑ 31), sch 3 (items 1, 2, 4): 26 Mar 2023 (s 2(1) item 1) | Amended by No 67 of 2024, effective sch 5 (items 46 ‑ 48): 1 Oct 2024 (s 2(1) item 10)

s 12-115 — Commonwealth education or training payment

(1) An entity must withhold an amount from a * Commonwealth education or training payment it makes to an individual. For exceptions, see subsection (2) and section 12 ‑ 1. (2) In working out the amount to be withheld, disregard so much of the payment as is * exempt income of the individual.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-120 — Compensation, sickness or accident payment

An entity must withhold an amount from a payment of compensation, or of sickness or accident pay, it makes to an individual if the payment: (a) is made because of that or another individual’s incapacity for work; and (b) is calculated at a periodical rate; and (c) is not a payment made under an insurance policy to the policy owner. For exceptions, see section 12 ‑ 1.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-140 — Recipient does not quote tax file number

(1) An * investment body must withhold an amount from a payment it makes to another entity in respect of a * Part VA investment if: (a) all or some of the payment is * ordinary income or * statutory income of the other entity; and (b) if the investment is non ‑ transferable—the other entity did not * quote its * tax file number in connection with the investment before the time when the payment became payable; and (c) if the investment is transferable—the other entity did not quote its tax file number in connection with the investment before the time when the other entity had to be registered with the investment body as the * investor to be entitled to the payment. Note: If the investment body is an AMIT, under subsection 12A ‑ 205(2) amounts may be treated, for the purposes of this Part, as having been paid to the other entity by the investment body. Payment in respect of units in a trust or investment ‑ related betting chance (2) If a * Part VA investment consists of: (a) units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936 ); or (b) an investment ‑ related betting chance; an entity (including the * investment body) must withhold an amount from a payment it makes to another entity in respect of the investment if the conditions in subsection (1) of this section are met. For exceptions to the rules in this section, see sections 12 ‑ 150 to 12 ‑ 170. (3) If: (a) because of subsection 12A ‑ 205(2), an entity is treated as having made a payment to another entity; and (b) under subsection (2) of this section, the entity has withheld an amount from that payment, and paid the amount to the Commissioner; the entity may recover from the other entity, as a debt, the amount withheld. (4) The entity is entitled to set off an amount that the entity can recover from the other entity under subsection (3) against debts due by the entity to the other entity.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 101 of 2006, effective sch 3, 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 15 of 2019, effective sch 1 (items 19 ‑ 33, 46): 1 Apr 2019 (s 2(1) item 2)

s 12-145 — Investor becoming presently entitled to income of a unit trust

(1) This section applies if: (a) a * Part VA investment consists of units in a unit trust (as defined in section 202A of the Income Tax Assessment Act 1936 ); and (b) the * investor becomes presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of income of the trust at a time (the entitlement time ) before any of that share is paid to the investor. (2) The entity (including the * investment body) that would have to pay that share to the * investor if the share were due and payable at the entitlement time must withhold from the share, at that time, the amount (if any) that subsection 12 ‑ 140(2) would have required it to withhold if it had paid the share to the investor at that time. For exceptions to the rules in this section, see sections 12 ‑ 155 to 12 ‑ 170. (3) This Part (except section 12 ‑ 140 and this section) applies as if that entity had paid that share to the * investor at the entitlement time. (4) If that entity withholds an amount from that share as required by subsection (2), subsection 12 ‑ 140(2) does not require an amount to be withheld from a payment of all or part of that share to the * investor.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-150 — Limited application of section 12 ‑ 140 to payment under financial arrangement

(1) This section limits the extent to which section 12 ‑ 140 applies to a payment in respect of a * Part VA investment if the investment is a qualifying security (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936 (about gains accruing on securities)) and: (a) is of a kind mentioned in item 1 or 2 of the table in subsection 202D(1) of that Act; or (b) is of a kind mentioned in item 3 of that table and is non ‑ transferable. Note: Section 202D of the Income Tax Assessment Act 1936 lists the investments in connection with which tax file numbers are to be quoted. (2) Section 12 ‑ 140 applies to the payment only to the extent that is covered by one or both of these paragraphs: (a) so much of the payment as consists of periodic interest (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936 ); (b) if the payment became payable at the end of the term (within the meaning of that Division) of the investment—so much of the payment as does not exceed what section 159GQ of that Act would include in the * investor’s assessable income for the income year in which that term ended. Note: This limitation ensures that an amount is not withheld from payment of an amount in respect of which TFN withholding tax is payable. See Subdivision 14 ‑ B. (3) The adoption (under section 18 of the Income Tax Assessment Act 1936 ) of an accounting period ending on a day other than 30 June is disregarded for the purposes of: (a) paragraph (2)(b) of this section; and (b) the application of Division 16E of Part III of that Act for the purposes of that paragraph.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Repealed and substituted by No 101 of 2006, effective sch 3, 4: 1 Jan 2008 Remainder: Royal Assent

s 12-152 — Limited application of section 12 ‑ 140 to payment covered by section 12A ‑ 205

(1) If a payment is treated under section 12A ‑ 205 as having been made, section 12 ‑ 140 does not apply to the payment to the extent that it covers a * pre ‑ AMMA actual payment from which section 12 ‑ 140 has required an amount to be withheld. (2) If a payment is a * post ‑ AMMA actual payment, section 12 ‑ 140 does not apply to the payment to the extent that it covers either or both of the following: (a) a * pre ‑ AMMA actual payment from which section 12 ‑ 140 has required an amount to be withheld; (b) a payment that is treated under section 12A ‑ 205 as having been made from which section 12 ‑ 140 has required an amount to be withheld.

Amendment history: Inserted by No 15 of 2019, effective sch 1 (items 19 ‑ 33, 46): 1 Apr 2019 (s 2(1) item 2)

s 12-155 — When investor may quote ABN as alternative

Section 12 ‑ 140 or 12 ‑ 145 does not require an amount to be withheld if: (a) the other entity made the investment in the course or furtherance of an * enterprise * carried on by it; and (b) the other entity has an * ABN, and has * quoted it to the investment body, by the time referred to in paragraph 12 ‑ 140(1)(b) or (c).

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 41 of 2005, effective sch 1 (items 12, 13), sch 10 (items 233 ‑ 241, 275): Royal Assent

s 12-160 — Investment body unaware that exemption from quoting TFN has stopped applying

Section 12 ‑ 140 or 12 ‑ 145 does not require an amount to be withheld if: (a) a provision of Division 5 of Part VA of the Income Tax Assessment Act 1936 has applied to the other entity in relation to the investment, but no longer applies when the payment is made; and (b) when the payment is made, the * investment body has not been informed of anything that resulted in the provision no longer applying. Note: Division 5 of Part VA of that Act provides, in certain cases, that even though an entity has not quoted its tax file number it is taken to have done so.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-165 — Exception for fully franked dividend

Section 12 ‑ 140 does not require an amount to be withheld if: (a) the investment consists of * shares in a public company (as defined in section 202A of the Income Tax Assessment Act 1936 ); and (b) the payment is a * distribution that has been franked in accordance with section 202 ‑ 5 of the Income Tax Assessment Act 1997 ; and (c) the * franking percentage for the distribution is 100%.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 23 of 2005, effective sch 2 (items 13, 14(2)), sch 3 (items 103 ‑ 109, 111(3)): Royal Assent

s 12-170 — Exception for payments below thresholds set by regulations

(1) Section 12 ‑ 140 or 12 ‑ 145 does not require an amount to be withheld if the payment is less than the amount worked out under the regulations. (2) Regulations made for the purposes of this section may deal differently with different payments.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-175 — Trustee distributes income of closely held trust

Scope (1) This section applies if: (a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time ) during an income year of the trust; and (b) some or all of the distribution is from the * ordinary income or * statutory income of the trust; and (c) the trust is: (i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936 ) in relation to the income year; and (ii) a closely held trust (within the meaning of section 102UC of that Act); and (iii) not prescribed by the regulations for the purposes of this subparagraph; and (d) the beneficiary is: (i) an Australian resident; and (ii) not an * exempt entity; and (iii) not under a legal disability for the purposes of section 98 of that Act. Trustee must withhold (2) The trustee must withhold an amount from the distribution, if: (a) the beneficiary did not * quote the beneficiary’s * tax file number to the trustee before the distribution time; and (b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and (c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non ‑ disclosure tax) in connection with the distribution; and (d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution. Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12 ‑ 140 in priority to this section: see section 12 ‑ 5. Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16 ‑ 25. Application of rest of Part (3) If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time. Trust income of earlier income years (4) Subsections (2) and (3) do not apply to the distribution, to the extent that: (a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of an earlier income year; and (b) the distribution is a distribution of some or all of that share. Note: The trustee may have been required to withhold from that share under section 12 ‑ 180.

Amendment history: Inserted by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010 | Amended by No 95 of 2019, effective sch 4 (items 5, 6): 1 Jan 2020 (s 2(1) item 2) sch 5 (items 2 ‑ 4), sch 6: 29 Oct 2019 (s 2(1) item 3)

s 12-180 — Beneficiary becomes presently entitled to income of closely held trust

Scope (1) This section applies if: (a) at the end of an income year of a trust, a beneficiary of the trust is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of that year; and (b) paragraph 12 ‑ 175(1)(c) in this Schedule applies to the trustee of the trust; and (c) paragraph 12 ‑ 175(1)(d) applies to the beneficiary. Trustee must withhold (2) The trustee must withhold an amount from that share of the * net income of the trust, if: (a) the beneficiary did not * quote the beneficiary’s * tax file number to the trustee before the end of the year; and (b) the trustee is not liable to pay tax in respect of that share under section 98 of the Income Tax Assessment Act 1936 ; and (c) the trustee is not required to make a correct TB statement about that share under Division 6D of Part III of that Act (about trustee beneficiary non ‑ disclosure tax); and (d) family trust distribution tax is not payable on that share of the income of the trust under Schedule 2F to that Act. Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12 ‑ 145 in priority to this section: see section 12 ‑ 5. Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16 ‑ 25. Application of rest of Part (3) This Part (other than section 12 ‑ 175) applies as if the trustee had paid that share of the * net income of the trust to the beneficiary at the end of the income year. Entitlements already paid (4) Subsections (2) and (3) do not apply to that share of the * net income of the trust to the extent that the trustee distributed any of that share to the beneficiary during the income year. Note: The trustee may have been required to withhold from that distribution under section 12 ‑ 175. Trusts that end during the year (5) This section applies as if each reference to the end of an income year were a reference to the time occurring just before the trust ends, if the trust ends during the income year.

Amendment history: Inserted by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010

s 12-185 — Exception for payments below thresholds set by regulations

(1) Section 12 ‑ 175 or 12 ‑ 180 does not require an amount to be withheld if the payment (including the payment mentioned in subsection 12 ‑ 180(3)) is less than the amount worked out under the regulations. (2) Regulations made for the purposes of this section may deal differently with different payments.

Amendment history: Inserted by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010

s 12-190 — Recipient does not quote ABN

(1) An entity (the payer ) must withhold an amount from a payment it makes to another entity if: (a) the payment is for a * supply that the other entity has made, or proposes to make, to the payer in the course or furtherance of an * enterprise * carried on in Australia by the other entity; and (b) none of the exceptions in this section applies. ABN correctly quoted (2) The payer need not withhold an amount under this section if, when the payment is made: (a) the other entity has given the payer an * invoice that relates to the * supply and * quotes the other entity’s * ABN; or (b) the payer has some other document relating to the supply on which the other entity’s ABN is * quoted. (2A) The payer need not withhold an amount under this section if the other entity has made the * supply, or proposes to make the supply, through an agent and, when the payment is made: (a) the agent has given the payer an * invoice that relates to the supply and * quotes the agent’s * ABN; or (b) the payer has some other document relating to the supply on which the agent’s ABN is * quoted. Payer has no reason to believe that ABN has been incorrectly quoted (3) The payer need not withhold an amount under this section if, when the payment is made: (a) the other entity has given the payer an * invoice that relates to the * supply and purports to * quote the other entity’s * ABN, or the payer has some other document that relates to the supply and purports to * quote the other entity’s ABN; and (b) the other entity does not have an ABN, or the invoice or other document does not in fact quote the other entity’s ABN; and (c) the payer has no reasonable grounds to believe that the other entity does not have an ABN, or that the invoice or other document does not quote the other entity’s ABN. (3A) The payer need not withhold an amount under this section if the other entity has made the * supply, or proposes to make the supply, through an agent and, when the payment is made: (a) the agent has given the payer an * invoice that relates to the supply and purports to * quote the agent’s * ABN, or the payer has some other document that relates to the supply and purports to * quote the agent’s ABN; and (b) the agent does not have an ABN, or the invoice or other document does not in fact quote the agent’s ABN; and (c) the payer has no reasonable grounds to believe that the agent does not have an ABN, or that the invoice or other document does not quote the agent’s ABN. No need to quote ABN (4) The payer need not withhold an amount under this section if: (a) the payment is made otherwise than in the course or furtherance of an * enterprise * carried on in Australia by the payer; or (b) the payment (disregarding so much of it as relates to * GST payable on the * supply) or, if the payer has also made, or proposes to make, one or more other payments to the other entity for the supply, the total of all the payments (disregarding so much of them as relates to * GST payable on the supply) does not exceed $50 or such higher amount as is specified in regulations in force for the purposes of subsection 29 ‑ 80(1) of the * GST Act; or (c) the supply is made in the course or furtherance of an activity, or series of activities, done as a member of a local governing body established by or under a * State law or * Territory law; or (d) the supply is wholly * input taxed. (5) The payer need not withhold an amount under this section if the payment: (a) is covered by section 12 ‑ 140 or 12 ‑ 145 (about not quoting * tax file number in respect of an investment in respect of which the payment is made); or (b) would be covered by section 12 ‑ 140 or 12 ‑ 145 if the other entity had not quoted as mentioned in subsection 12 ‑ 140(1) or section 12 ‑ 155; or (c) would be covered by section 12 ‑ 140 or 12 ‑ 145 apart from section 12 ‑ 160, 12 ‑ 165 or 12 ‑ 170 (which are exceptions to sections 12 ‑ 140 and 12 ‑ 145); or (d) is covered by section 12 ‑ 175 or 12 ‑ 180 (Payment of income of closely held trust where TFN not quoted); or (e) would be covered by section 12 ‑ 175 or 12 ‑ 180 if the other entity had not quoted as mentioned in paragraph 12 ‑ 175(2)(a) or 12 ‑ 180(2)(a); or (f) would be covered by section 12 ‑ 175 or 12 ‑ 180 apart from section 12 ‑ 185 (which is an exception to sections 12 ‑ 175 and 12 ‑ 180). (6) The payer need not withhold an amount under this section if, when the payment is made: (a) the other entity is an individual and has given the payer a written statement to the effect that: (i) the * supply is made in the course or furtherance of an activity, or series of activities, done as a private recreational pursuit or hobby; or (ii) the supply is, for the other entity, wholly of a private or domestic nature; and (b) the payer has no reasonable grounds to believe that the statement is false or misleading in a material particular. (7) In working out, for the purposes of this section, whether an enterprise is * carried on in Australia, ignore any part of Australia that is not in the indirect tax zone (within the meaning of the * GST Act). Note: The effect of this subsection is to treat an enterprise as carried on in Australia only where it would be treated as carried on in the indirect tax zone under the A New Tax System (Australian Business Number) Act 1999 .

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 91 of 2000, effective sch 1, sch 2 (items 68 ‑ 120, 142A, 143, 144): 1 July 2000 (s 3(1)) sch 3 (items 1 ‑ 16): 22 Dec 1999 (s 3(4)) | Amended by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent | Amended by No 75 of 2010, effective sch 2 (items 3 ‑ 24): 1 July 2010 | Amended by No 2 of 2015, effective sch 2 (items 8 ‑ 20, 72, 73, 90 ‑ 99), sch 4 (items 75 ‑ 79): 25 Feb 2015 (s 2(1) items 3, 5, 6) sch 2 (items 66 ‑ 71): 1 July 2015 (s 2(1) item 4)

s 12-210 — Dividend payment to overseas person

A company that is an Australian resident must withhold an amount from a * dividend it pays if: (a) according to the register of the company’s members, the entity, or any of the entities, holding the * shares on which the dividend is paid has an address outside Australia; or (b) that entity, or any of those entities, has authorised or directed the company to pay the dividend to an entity or entities at a place outside Australia. For limits on the amount to be withheld, see section 12 ‑ 300.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-215 — Dividend payment received for foreign resident

(1) An entity that receives a payment of a * dividend of a company that is an Australian resident must withhold an amount from the dividend if: (a) the entity is a person in Australia or an * Australian government agency; and (b) a foreign resident is or becomes entitled: (i) to receive the dividend or part of it from the entity, or to receive the amount of the dividend or of part of it from the entity; or (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the dividend or part of it, or the amount of the dividend or of part of it. For limits on the amount to be withheld, see section 12 ‑ 300. (2) The entity must withhold the amount: (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 44 of 2000, effective sch 1, sch 3 (items 55 ‑ 67), sch 4 (items 17 ‑ 48): 22 Dec 1999 (s 2(1)) sch 2 (item 12): 1 Apr 2000 (s 2(2)) sch 3 (item 68): 1 July 2000 (s 2(8))

s 12-220 — Application to part of a dividend

This Part applies to a part of a * dividend in the same way as to a dividend.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-225 — Application to distribution by a liquidator or other person

This Part applies to a distribution that section 47 of the Income Tax Assessment Act 1936 treats as a * dividend paid by a company, in the same way as this Part applies to a dividend paid by the company, and as if the liquidator or other person making the distribution were the company.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-245 — Interest payment to overseas person

An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) it pays to an entity, or to entities jointly, if: (a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the interest relates; or (b) the payer is authorised to pay the interest at a place outside Australia (whether to the recipient or any of the recipients or to anyone else). For limits on the amount to be withheld, see section 12 ‑ 300.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-250 — Interest payment received for foreign resident

(1) An entity that receives a payment of interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) must withhold an amount from the payment if: (a) the entity is a person in Australia or an * Australian government agency; and (b) a foreign resident is or becomes entitled: (i) to receive the interest or part of it from the entity, or to receive the amount of the interest or of part of it from the entity; or (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the interest or part of it, or the amount of the interest or of part of it. For limits on the amount to be withheld, see section 12 ‑ 300. (2) The entity must withhold the amount: (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 44 of 2000, effective sch 1, sch 3 (items 55 ‑ 67), sch 4 (items 17 ‑ 48): 22 Dec 1999 (s 2(1)) sch 2 (item 12): 1 Apr 2000 (s 2(2)) sch 3 (item 68): 1 July 2000 (s 2(8))

s 12-255 — Interest payment derived by lender in carrying on business through overseas permanent establishment

An entity must withhold an amount from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) it pays if it has been notified under section 12 ‑ 260 of this Act that this section applies to the interest. Note: For limits on the amount to be withheld, see section 12 ‑ 300.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Repealed and substituted by No 101 of 2006, effective sch 3, 4: 1 Jan 2008 Remainder: Royal Assent

s 12-260 — Lender to notify borrower if interest derived through overseas permanent establishment

(1) If: (a) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) is payable to: (i) an entity that is, or entities at least one of whom is, an Australian resident; or (ii) an * Australian government agency; and (b) the entity liable to pay the interest is authorised to pay it at a place in Australia (whether to any of those entities or the agency, or to anyone else); and (c) the interest is or will be * derived by any of those entities or the agency in carrying on business in a country outside Australia at or through a * permanent establishment it has in that country; those entities, or the agency, must notify the entity liable to pay the interest that section 12 ‑ 255 applies to the interest. (2) The notice must be given in writing, before the entities, or the agency, enter into the transaction in relation to which the interest is payable, or within one month afterwards. (3) Immediately after giving the notice, those entities, or the agency, must notify the Commissioner of: (a) the particulars of the transaction (including the dates on which interest is payable under it); and (b) the day when the notice was given to the entity liable to pay the interest. Failure to comply with this section may contravene section 8C of this Act.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-280 — Royalty payment to overseas person

An entity must withhold an amount from a * royalty it pays to an entity, or to entities jointly, if: (a) the recipient or any of the recipients has an address outside Australia according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the royalty relates; or (b) the payer is authorised to pay the royalty at a place outside Australia (whether to the recipient or any of the recipients or to anyone else). For limits on the amount to be withheld, see section 12 ‑ 300.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-285 — Royalty payment received for foreign resident

(1) An entity that receives a payment of a * royalty must withhold an amount from the payment if: (a) the entity is a person in Australia or an * Australian government agency; and (b) a foreign resident is or becomes entitled: (i) to receive the royalty or part of it from the entity, or to receive the amount of the royalty or of part of it from the entity; or (ii) to have the entity credit to the foreign resident, or otherwise deal with on the foreign resident’s behalf or as the foreign resident directs, the royalty or part of it, or the amount of the royalty or of part of it. For limits on the amount to be withheld, see section 12 ‑ 300. (2) The entity must withhold the amount: (a) if the foreign resident is so entitled when the entity receives the payment—immediately after the entity receives the payment; or (b) if the foreign resident becomes so entitled after the entity receives the payment—immediately after the foreign resident becomes so entitled.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 44 of 2000, effective sch 1, sch 3 (items 55 ‑ 67), sch 4 (items 17 ‑ 48): 22 Dec 1999 (s 2(1)) sch 2 (item 12): 1 Apr 2000 (s 2(2)) sch 3 (item 68): 1 July 2000 (s 2(8))

s 12-300 — Limits on amount withheld under this Subdivision

This Subdivision does not require an entity: (a) to withhold an amount from a * dividend, from interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) or from a * royalty if no * withholding tax is payable in respect of the dividend, interest or royalty; or (b) to withhold from a dividend, from interest (within the meaning of that Division) or from a royalty more than the withholding tax payable in respect of the dividend, interest or royalty (reduced by each amount already withheld from it under this Subdivision). Note: Section 128B of the Income Tax Assessment Act 1936 deals with withholding tax liability.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-305 — Departing Australia superannuation payment

An entity must withhold an amount from a * departing Australia superannuation payment it pays to an entity.

Amendment history: Inserted by No 15 of 2002, effective 4 Apr 2002 | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12)

s 12-310 — Limits on amount withheld under this Subdivision

This Subdivision does not require an entity: (a) to withhold an amount from a * departing Australia superannuation payment if no * withholding tax is payable in respect of the payment; or (b) to withhold from a departing Australia superannuation payment more than the withholding tax payable in respect of the payment (reduced by each amount already withheld from it under this Subdivision). Note: Section 301 ‑ 175 of the Income Tax Assessment Act 1997 deals with the withholding tax liability.

Amendment history: Inserted by No 15 of 2002, effective 4 Apr 2002 | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12)

s 12-312 — Untaxed roll ‑ over superannuation benefits

An entity must withhold an amount from an * excess untaxed roll ‑ over amount it pays to an entity. Note: An excess untaxed roll ‑ over amount is an amount that may form part of a roll ‑ over superannuation benefit that includes an element untaxed in the fund: see section 306 ‑ 15 of the Income Tax Assessment Act 1997 .

Amendment history: Inserted by No 9 of 2007, effective sch 1 (items 19 ‑ 24), sch 2 (items 4, 5), sch 4 (items 11 ‑ 16), sch 5 (items 31 ‑ 36): 15 Mar 2007 (s 2(1) items 2 ‑ 8)

s 12-313 — Limits on amount withheld under this Subdivision

This Subdivision does not require an entity: (a) to withhold an amount from an * excess untaxed roll ‑ over amount if no * withholding tax is payable on the amount; or (b) to withhold from an excess untaxed roll ‑ over amount more than the withholding tax payable on the amount (reduced by each amount already withheld from the excess untaxed roll ‑ over amount under this Subdivision). Note: Section 306 ‑ 15 of the Income Tax Assessment Act 1997 deals with liability to this form of withholding tax.

Amendment history: Inserted by No 9 of 2007, effective sch 1 (items 19 ‑ 24), sch 2 (items 4, 5), sch 4 (items 11 ‑ 16), sch 5 (items 31 ‑ 36): 15 Mar 2007 (s 2(1) items 2 ‑ 8)

s 12-315 — Payment to foreign resident etc.

(1) An entity (the payer ) that * carries on an * enterprise must withhold an amount from a payment it makes to another entity, or to other entities jointly, in the course or furtherance of the enterprise if: (a) the entity receiving the payment, or any of the entities receiving the payment, is an entity covered by subsection (2); and (b) the payment is of a kind set out in the regulations; and (c) the payment is not: (i) a * dividend of a company; or (ii) interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ); or (iii) a * royalty; or (iv) a * departing Australia superannuation payment; or (v) a payment worked out wholly or partly by reference to the value or quantity of * natural resources produced or recovered in Australia; or (vi) a * mining payment; or (vii) an amount represented by or reasonably attributable to a * fund payment; and (d) the entity receiving the payment is not covered by an exemption in force under subsection 12 ‑ 319(1), or at least one of the entities receiving the payment is not covered by an exemption in force under that subsection. (2) An entity is covered by this subsection if any of the following conditions is satisfied: (a) the entity is a foreign resident; (b) the payer believes, or has reasonable grounds to believe, that the entity is a foreign resident; (c) the payer has no reasonable grounds to believe that the entity is an Australian resident, and either: (i) the entity has an address outside Australia (according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, about the transaction to which the payment relates); or (ii) the payer is authorised to make the payment at a place outside Australia (whether to the entity or to anyone else); (d) the entity has a connection outside Australia of a kind set out in the regulations. (3) Before the Governor ‑ General makes a regulation for the purposes of paragraph (1)(b), the Minister must be satisfied that each payment set out in the regulation is a payment of a kind that could reasonably be related to assessable income of foreign residents.

Amendment history: Inserted by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent | Amended by No 41 of 2005, effective sch 1 (items 12, 13), sch 10 (items 233 ‑ 241, 275): Royal Assent | Amended by No 15 of 2007, effective sch 1 (items 366 ‑ 393, 406(1) ‑ (3)), sch 3 (items 61 ‑ 66), sch 4 (item 12): 15 Mar 2007 (s 2(1) items 2, 8, 12) | Amended by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent

s 12-317 — Payment received for foreign resident etc.

(1) An entity (the intermediary ) that receives a payment meeting the requirements set out in paragraphs 12 ‑ 315(1)(b) and (c) must withhold an amount from the payment if: (a) the intermediary is a person in Australia or an * Australian government agency; and (b) another entity (the likely foreign recipient ) is or becomes entitled: (i) to receive the payment or part of it from the intermediary, or to receive the amount of the payment or of part of it from the intermediary; or (ii) to have the intermediary credit to the likely foreign recipient, or otherwise deal with on the likely foreign recipient’s behalf or as the likely foreign recipient directs, the payment or part of it, or the amount of the payment or of part of it; and (c) the likely foreign recipient is covered by subsection (3); and (d) the likely foreign recipient is not covered by an exemption in force under subsection 12 ‑ 319(1). (2) The intermediary must withhold the amount: (a) if the likely foreign recipient is so entitled when the intermediary receives the payment—just after the intermediary receives the payment; or (b) if the likely foreign recipient becomes so entitled after the intermediary receives the payment—just after the likely foreign recipient becomes so entitled. (3) The likely foreign recipient is covered by this subsection if any of the following conditions is satisfied: (a) the likely foreign recipient is a foreign resident; (b) the intermediary believes, or has reasonable grounds to believe, that the likely foreign recipient is a foreign resident; (c) the intermediary has no reasonable grounds to believe that the likely foreign recipient is an Australian resident, and either: (i) the likely foreign recipient has an address outside Australia (according to any record that is in the intermediary’s possession, or is kept or maintained on the intermediary’s behalf); or (ii) the intermediary is authorised to forward the payment to a place outside Australia (whether to the likely foreign recipient or to anyone else); (d) the likely foreign recipient has a connection outside Australia of a kind set out in the regulations.

Amendment history: Inserted by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent

s 12-319 — Exemptions from withholding obligations under this Subdivision

(1) The Commissioner may grant an entity an exemption in writing for the purposes of paragraphs 12 ‑ 315(1)(d) and 12 ‑ 317(1)(d) if the Commissioner is satisfied that: (a) the entity has an established history of compliance with its obligations under * taxation laws; and (b) the entity is likely to continue to comply with those obligations in the future. (2) The exemption is in force during the period: (a) beginning when the Commissioner grants the exemption; and (b) ending at the time specified in the exemption. (3) Without limiting the matters to which the Commissioner may have regard in deciding whether to grant an entity an exemption, the Commissioner may have regard to the following: (a) whether the entity is or was liable to pay an instalment under Division 45 at any time in: (i) the income year in which the exemption is proposed to be granted; and (ii) the previous 2 income years; (b) the amount (if any) of the entity’s * tax ‑ related liabilities that are currently due and payable; (c) the extent to which the entity and its * associates (if any) have complied with their obligations under * taxation laws during: (i) the income year in which the exemption is proposed to be granted; and (ii) the previous 2 income years. (4) The Commissioner must give a copy of the exemption to the entity to which it relates. (5) A failure to comply with subsection (4) does not affect the validity of the exemption.

Amendment history: Inserted by No 66 of 2003, effective sch 3 (items 134 ‑ 139, 140(1)), sch 5, sch 6 (items 2, 3): Royal Assent

s 12-319A — Payment to employee

An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual: (a) as an employee of an Approved Employer (whether the entity or another entity) under a program covered by section 840 ‑ 906 of the Income Tax Assessment Act 1997 (about labour mobility programs); and (b) at a time when the employee is a foreign resident and: (i) the employee holds a Temporary Work (International Relations) Visa (subclass 403); or (ii) the employee holds a Temporary Activity Visa (subclass 408) having previously held a Temporary Work (International Relations) Visa (subclass 403); or (iii) the employee holds a visa of a kind prescribed by regulations made under the Income Tax Assessment Act 1997 for the purposes of subparagraph 840 ‑ 905(b)(iii) of that Act.

Amendment history: Inserted by No 58 of 2012, effective sch 1 (items 8 ‑ 28): 21 June 2012 ( see s 2(1)) | Amended by No 8 of 2019, effective sch 1 (items 1 ‑ 5, 7, 8), sch 2, sch 3 (items 2 ‑ 10), sch 4 (items 1 ‑ 7, 18), sch 5, sch 7 (item 2), sch 8 (items 9 ‑ 11, 16 ‑ 19, 48 ‑ 63): 1 Apr 2019 (s 2(1) items 2, 3, 5, 7, 11) sch 3 (items 11 ‑ 16): 23 June 2020 (s 2(1) item 4) sch 6 (items 3, 4): 1 July 2018 (s 2(1) item 6) | Amended by No 8 of 2022, effective sch 6 (item 23), sch 8 (items 35, 36): 1 Apr 2022 (s 2(1) items 6, 10) sch 8 (item 32): 23 Feb 2022 (s 2(1) item 9) sch 8 (items 41 ‑ 43): 4 Apr 2021 (s 2(1) item 12) | Amended by No 75 of 2022, effective sch 2 (items 2 ‑ 4): 6 Dec 2022 (s 2(1) item 3) sch 4 (items 23 ‑ 38): 1 July 2022 (s 2(1) item 4)

s 12-320 — Mining payment

(1) An entity must withhold an amount from a * mining payment that: (a) it makes to another entity; or (b) it applies for the benefit of another entity. (2) Subsection (1) does not require the entity to withhold more than the * mining withholding tax payable in respect of the * mining payment. Note: Section 128V of the Income Tax Assessment Act 1936 deals with mining withholding tax liability.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 101 of 2004, effective sch 11 (items 3 ‑ 15): 22 Dec 1999 (s 2(1) item 12) sch 11 (item 130): 30 June 2001 (s 2(1) item 15) sch 11 (items 155 ‑ 160, 163, 164): 30 June 2004 (s 2(1) items 17, 18)

s 12-325 — Natural resource payment

(1) An entity must withhold an amount from a payment it makes to a foreign resident, or to 2 or more entities at least one of which is a foreign resident, if the payment is worked out wholly or partly by reference to the value or quantity of * natural resources produced or recovered in Australia. (2) The amount to be withheld is: (a) the amount notified by the Commissioner under section 12 ‑ 330; or (b) the amount worked out under a certificate in force under section 12 ‑ 335 that covers the payment; as appropriate. Exception (3) Subsection (1) does not apply if: (a) the Commissioner has notified the entity under section 12 ‑ 330 that the entity does not need to withhold an amount from the payment; or (b) a certificate in force under section 12 ‑ 335 covers the payment and does not require the entity to withhold an amount from it.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1))

s 12-330 — Payer must ask Commissioner how much to withhold

(1) An entity must not intentionally make a payment from which section 12 ‑ 325 requires it to withhold an amount, unless: (a) the entity has notified the Commissioner in writing of the amount of the proposed payment; and (b) the Commissioner has later notified the entity in writing of the amount (if any) that the entity must withhold from the payment in respect of tax or * petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made; or the payment is covered by a certificate in force under section 12 ‑ 335. Penalty: 20 penalty units. Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit. Failure to notify not an offence against section 8C (2) An entity that fails to notify the Commissioner as required by subsection (1) does not commit an offence against section 8C.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 146 of 2001, effective s 4, sch 3: 15 Dec 2001 (s 2(1)) | Amended by No 14 of 2012, effective sch 1, sch 2 (items 1 ‑ 9): 1 July 2012 (s 2(1) items 2, 3) sch 2 (items 17 ‑ 28): never commenced (s 2(1) item 4) | Amended by No 88 of 2013, effective sch 5 (items 22 ‑ 27): 1 July 2013 (s 2(1) item 10) sch 6 (items 44 ‑ 48, 66): 29 June 2013 (s 2(1) item 14) sch 7 (items 167 ‑ 183): 1 July 2012 (s 2(1) item 11) sch 7 (item 225): 28 June 2013 (s 2(1) item 23) | Amended by No 96 of 2014, effective sch 1 (items 54 ‑ 108, 122 ‑ 124), sch 2 (items 41 ‑ 43): 30 Sept 2014 (s 2(1) item 2, F2014L01256)

s 12-335 — Commissioner may exempt from section 12 ‑ 330, subject to conditions

(1) The Commissioner may give an entity a written certificate exempting the entity from complying with section 12 ‑ 330 for specified payments. (2) A certificate is subject to: (a) a condition that the entity must withhold from a payment covered by the certificate the amount (if any) worked out in accordance with the certificate in respect of tax or * petroleum resource rent tax that is or may become payable by a foreign resident to whom the payment is made; and (b) such other conditions as the certificate specifies. However, the entity does not contravene subsection 12 ‑ 330(1) because it contravenes a condition. (3) The Commissioner may, by written notice given to the entity: (a) revoke a certificate, whether or not a condition of it has been contravened; or (b) vary a certificate by revoking, changing or adding to its conditions. Note: A person who is dissatisfied with a decision under this section may object against the decision in the manner set out in Part IVC.

Amendment history: Inserted by No 178 of 1999, effective sch 1 (items 1 ‑ 4, 85 ‑ 88), sch 2 (items 1 ‑ 22, 35, 36, 75 ‑ 82, 92, 93): 22 Dec 1999 (s 2(1)) | Amended by No 14 of 2012, effective sch 1, sch 2 (items 1 ‑ 9): 1 July 2012 (s 2(1) items 2, 3) sch 2 (items 17 ‑ 28): never commenced (s 2(1) item 4) | Amended by No 88 of 2013, effective sch 5 (items 22 ‑ 27): 1 July 2013 (s 2(1) item 10) sch 6 (items 44 ‑ 48, 66): 29 June 2013 (s 2(1) item 14) sch 7 (items 167 ‑ 183): 1 July 2012 (s 2(1) item 11) sch 7 (item 225): 28 June 2013 (s 2(1) item 23) | Amended by No 96 of 2014, effective sch 1 (items 54 ‑ 108, 122 ‑ 124), sch 2 (items 41 ‑ 43): 30 Sept 2014 (s 2(1) item 2, F2014L01256)

s 12-375 — What this Subdivision is about

A withholding MIT may be required to withhold an amount from a payment of its Australian sourced net income (other than dividends, interest and royalties) if the payment is made to an entity whose address, or place for payment, is outside Australia. If the payment is made to another entity, the withholding MIT is required to make information available to the recipient outlining certain details in relation to the payment. If a custodian receives a payment that is covered by that information, it is required to withhold an amount from any related later payment to an entity whose address, or place for payment, is outside Australia. If the later payment is made to another entity, the custodian is required to make information available in relation to that later payment. If an entity that is not a custodian receives a payment that is covered by that information, it is required to withhold an amount from that payment if a foreign resident becomes entitled to that payment. If a resident becomes entitled to the payment, the entity must make information available in relation to that payment. Where there is an obligation to withhold, the applicable withholding rate is determined by the nature of the country or territory in which the recipient’s address, place for payment or residency is located and whether the trust is a clean building managed investment trust. A managed investment trust is a clean building managed investment trust if it is a managed investment trust that holds one or more clean buildings and does not derive assessable income from any other taxable Australian property (other than certain assets that are reasonably incidental to a clean building). Table of sections Operative provisions 12 ‑ 383 Meaning of withholding MIT 12 ‑ 385 Withholding by withholding MITs 12 ‑ 390 Withholding by custodians and other entities 12 ‑ 395 Requirement to give notice or make information available 12 ‑ 405 Meaning of fund payment —general case 12 ‑ 410 Entity to whom payment is made 12 ‑ 415 Failure to give notice or make information available: administrative penalty 12 ‑ 420 Agency rules 12 ‑ 425 Meaning of clean building managed investment trust 12 ‑ 430 Meaning of clean building 12 ‑ 435 Meaning of non ‑ concessional MIT income 12 ‑ 436 Meaning of asset entity , operating entity , cross staple arrangement and stapled entity 12 ‑ 437 Meaning of MIT cross staple arrangement income 12 ‑ 438 MIT cross staple arrangement income—de minimis exception 12 ‑ 439 MIT cross staple arrangement income—approved economic infrastructure facility exception 12 ‑ 440 Transitional—MIT cross staple arrangement income 12 ‑ 441 Integrity rule—concessional cross staple rent cap 12 ‑ 442 Meaning of excepted MIT CSA income 12 ‑ 443 Concessional cross staple rent cap—existing lease with specified rent or rent method 12 ‑ 444 Concessional cross staple rent cap—general 12 ‑ 445 Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income 12 ‑ 446 Meaning of MIT trading trust income 12 ‑ 447 Transitional— MIT trading trust income 12 ‑ 448 Meaning of MIT agricultural income , Australian agricultural land for rent and Division 6C land 12 ‑ 449 Transitional—MIT agricultural income 12 ‑ 450 Meaning of MIT residential housing income 12 ‑ 451 Transitional—MIT residential housing income 12 ‑ 452 Meaning of residential dwelling asset 12 ‑ 453 MIT agricultural income and MIT residential housing income—capital gains in relation to membership interests

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12-383 — Meaning of withholding MIT

(1) A trust is a withholding MIT in relation to an income year if: (a) it is a * managed investment trust in relation to that income year because of paragraph 275 ‑ 10(1)(a) or subsection 275 ‑ 10(2) of the Income Tax Assessment Act 1997 ; and (b) a substantial proportion of the investment management activities carried out in relation to the trust in respect of all of the following assets of the trust are carried out in Australia throughout the income year: (i) assets that are situated in Australia at any time in the income year; (ii) assets that are * taxable Australian property at any time in the income year; (iii) assets that are * shares, units or interests listed for quotation in the official list of an * approved stock exchange in Australia at any time in the income year. (2) For the purposes of ascertaining whether a trust is a * managed investment trust in relation to that income year for the purposes of paragraph (1)(a), treat as a * fund payment by the trustee of the trust any amount that, under subsection 12A ‑ 205(2), would be treated as a payment by the trustee if the trust were an * AMIT. Note: The making of a fund payment is a requirement for the trust to be a managed investment trust under paragraph 275 ‑ 10(1)(a) and subsection 275 ‑ 10(3) of the Income Tax Assessment Act 1997 .

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 15 of 2019, effective sch 1 (items 19 ‑ 33, 46): 1 Apr 2019 (s 2(1) item 2)

s 12-385 — Withholding by withholding MITs

(1) A trustee of a trust that is a * withholding MIT in relation to an income year that makes a * fund payment in relation to that income year to an entity covered by section 12 ‑ 410 must withhold an amount from the payment. Note 1: An entity may be covered by section 12 ‑ 410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia. Note 2: If the payment is made to a recipient not covered by section 12 ‑ 410, the trustee is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12 ‑ 395. (2) The amount the trustee must withhold is: (3) The rate is: (a) if the address or place for payment of the recipient is in an * information exchange country: (i) 15% for * fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or (ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a * clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or (iii) 30% for fund payments, to the extent that they are attributable to * non ‑ concessional MIT income (see section 12 ‑ 435); or (b) otherwise—30%. (4) An information exchange country is a foreign country or foreign territory specified in the regulations for the purposes of this section. (5) This section does not apply to an amount paid by a * withholding MIT to the extent that no * managed investment trust withholding tax is payable in respect of the payment or an amount reasonably attributable to the payment.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 97 of 2012, effective sch 1: 29 June 2012 ( see s 2(1)) Remainder: Royal Assent | Amended by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-390 — Withholding by custodians and other entities

Withholding by custodians (1) A * custodian must withhold an amount from a payment (the later payment ) it makes if: (a) all or some of the later payment (the covered part ) is reasonably attributable to the part of an earlier payment received by the custodian that was covered by a notice or information under section 12 ‑ 395; and (b) the later payment is made to an entity covered by section 12 ‑ 410. Note 1: The covered part referred to in paragraph (1)(a) is attributable to a fund payment made by a withholding MIT, or 2 or more fund payments made by one or more withholding MITs. One or more of those withholding MITs may be AMITs. Note 2: An entity may be covered by section 12 ‑ 410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia. Note 3: If the payment is made to a recipient not covered by section 12 ‑ 410, the custodian is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12 ‑ 395. (2) The amount the * custodian must withhold is: (3) The rate is: (a) if the address or place for payment of the recipient is in an * information exchange country: (i) 15% for * fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or (ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a * clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or (iii) 30% for fund payments, to the extent that they are attributable to * non ‑ concessional MIT income (see section 12 ‑ 435); or (b) otherwise—30%. Withholding by other entities (4) An entity that is not a * withholding MIT or a * custodian must withhold an amount from a payment it receives if: (a) the payment or part of it (the covered part ) was covered by a notice or information under section 12 ‑ 395; and (b) a foreign resident (the recipient ) is or becomes entitled: (i) to receive from the entity; or (ii) to have the entity credit to the recipient, or otherwise deal with on the recipient’s behalf or as the recipient directs; an amount (the attributable amount ) reasonably attributable to the covered part. Note 1: The covered part referred to in paragraph (4)(a) is attributable to a fund payment made by a withholding MIT, or 2 or more fund payments made by one or more withholding MITs. One or more of those withholding MITs may be AMITs. Note 2: If the recipient is not a foreign resident, the entity is required to give a notice to the recipient or publish information on a website setting out certain details about the payment: see section 12 ‑ 395. (5) The amount the entity must withhold is: (6) The rate is: (a) if the recipient is a resident of an * information exchange country: (i) 15% for * fund payments (except to the extent mentioned in subparagraph (ii) or (iii)); or (ii) 10% for fund payments, to the extent that they are, or are attributable to, fund payments from a * clean building managed investment trust (except to the extent mentioned in subparagraph (iii)); or (iii) 30% for fund payments, to the extent that they are attributable to * non ‑ concessional MIT income (see section 12 ‑ 435); or (b) otherwise—30%. (7) An entity is a resident of an * information exchange country if: (a) the entity is a resident of that country for the purposes of the taxation laws of that country; or (b) if there are no taxation laws of that country applicable to the entity or the entity’s residency status cannot be determined under those laws: (i) for an individual—the individual is ordinarily resident in that country; or (ii) for another entity—the entity is incorporated or formed in that country and is carrying on a business in that country. (8) An amount required to be withheld under subsection (4) must be withheld: (a) if the recipient is so entitled when the entity receives the payment—immediately after receipt; or (b) if the recipient becomes so entitled at a later time—immediately after the later time. Meaning of custodian (9) An entity is a custodian if: (a) the entity is * carrying on a * business that consists predominantly of providing a custodial or depository service (within the meaning of the Corporations Act 2001 ) pursuant to an * Australian financial services licence; or (b) the entity is acting on behalf of an entity that is carrying on such a business pursuant to such a licence. Exceptions (10) This section does not apply: (a) to a company unless the company would, apart from section 12 ‑ 420, be acting in the capacity as * agent for the recipient; or (b) to an amount paid or received by an entity to the extent that no * managed investment trust withholding tax is payable in respect of the amount or an amount reasonably attributable to the amount.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 97 of 2012, effective sch 1: 29 June 2012 ( see s 2(1)) Remainder: Royal Assent | Amended by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2) | Amended by No 70 of 2015, effective sch 1 (items 151 ‑ 174, 195 ‑ 205): 1 July 2015 (s 2(1) items 3, 6) sch 6 (items 51 ‑ 59): 25 June 2015 (s 2(1) item 17) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3) | Amended by No 76 of 2023, effective sch 2 (items 727–737): 20 Oct 2023 (s 2(1) item 2) sch 6 (items 39, 40): 21 Sept 2023 (s 2(1) item 22) sch 6 (items 43, 44): 1 Oct 2023 (s 2(1) item 23)

s 12-395 — Requirement to give notice or make information available

Withholding MITs and custodians (1) An entity that is a * withholding MIT or a * custodian must comply with subsection (2) if: (a) the entity makes a payment to another entity (the recipient ) from which an amount would have been required to be withheld under section 12 ‑ 385 or subsection 12 ‑ 390(1) if the payment had been made to an entity covered by section 12 ‑ 410; and (b) an amount is not required to be withheld from the payment because the recipient is not an entity covered by section 12 ‑ 410. Note: An entity may be covered by section 12 ‑ 410 if the entity has an address outside Australia or payment is authorised to be made to a place outside Australia. (2) The entity must: (a) give to the recipient a written notice containing the details specified in subsection (3); or (b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years. (3) The notice must be given, or the details must be made available on a website, before or at the time when the payment is made and: (a) must specify the part of the payment from which an amount would have been so required to have been withheld; and (aa) must specify the extent (if any) to which the payment is, or is attributable to, a * fund payment from a * clean building managed investment trust; and (ab) must specify the extent (if any) to which the payment is, or is attributable to, * non ‑ concessional MIT income (see section 12 ‑ 435); and (ac) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non ‑ concessional MIT income if the following provisions were disregarded: (i) subsection 12 ‑ 437(5); (ii) sections 12 ‑ 440, 12 ‑ 447, 12 ‑ 449 and 12 ‑ 451; and (ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non ‑ concessional MIT income only if subsection 12 ‑ 450(5) were disregarded; and (b) must specify the income year of the * withholding MIT to which that part relates. Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12 ‑ 415. Other entities (4) An entity that is not a * withholding MIT or a * custodian must comply with subsection (5) if: (a) the entity receives a payment; and (b) another entity (also the recipient ) is or becomes entitled: (i) to receive from the entity; or (ii) to have the entity credit to the recipient, or otherwise deal with on the recipient’s behalf or as the recipient directs; an amount attributable to the payment; and (c) the entity would have been required to withhold an amount from the payment under subsection 12 ‑ 390(4) if the recipient had been a foreign resident; and (d) an amount is not required to be withheld from the payment because the recipient is not a foreign resident. (5) The entity must: (a) give to the recipient a written notice containing the details specified in subsection (6); or (b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years. (6) The notice must be given, or the details must be made available on a website, before or at the time when the amount is paid or credited to the recipient, or is dealt with on the recipient’s behalf or as the recipient directs, and: (a) must specify the part of the payment referred to in paragraph (4)(a) from which an amount would have been so required to have been withheld; and (aa) must specify the extent (if any) to which the payment is, or is attributable to, a * fund payment from a * clean building managed investment trust; and (ab) must specify the extent (if any) to which the payment is, or is attributable to, * non ‑ concessional MIT income (see section 12 ‑ 435); and (ac) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non ‑ concessional MIT income if the following provisions were disregarded: (i) subsection 12 ‑ 437(5); (ii) sections 12 ‑ 440, 12 ‑ 447, 12 ‑ 449 and 12 ‑ 451; and (ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non ‑ concessional MIT income only if subsection 12 ‑ 450(5) were disregarded; and (b) must specify the income year of the * withholding MIT to which that part relates. Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12 ‑ 415.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3) | Amended by No 64 of 2020, effective sch 3 (items 124 ‑ 145): 1 July 2020 (s 2(1) item 5) sch 3 (items 302 ‑ 321, 325, 326): 1 Oct 2020 (s 2(1) item 6) | Amended by No 138 of 2024, effective sch 1 (items 13 ‑ 25), sch 4: 1 Jan 2025 (s 2(1) items 2, 5)

s 12-405 — Meaning of fund payment —general case

(1) The object of this section is to ensure that the total of the * fund payments that the trustee of a trust makes in relation to an income year equals, as nearly as practicable, the net income of the trust for the income year, disregarding these amounts ( excluded amounts ): (a) a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to, or exempted from, a requirement to withhold under Subdivision 12 ‑ F; (b) interest (as so defined) that is subject to, or exempted from, such a requirement; (c) a * royalty that is subject to, or exempted from, such a requirement; (d) a * capital gain or * capital loss from a * CGT event that happens in relation to a * CGT asset that is not * taxable Australian property; (e) amounts that are not from an * Australian source; and disregarding deductions relating to excluded amounts. (1A) This section applies to a trust that is not an * AMIT for an income year. Note: For the definition of fund payment in respect of a trust that is an AMIT for an income year, see section 12A ‑ 110. (2) Work out as follows how much of a payment (the actual payment ) made by the trustee of a trust in relation to an income year is a fund payment in relation to that year: Method statement Step 1. Reduce the actual payment by so much of it that is attributable to excluded amounts, and increase it by any amounts to which subsection (2A) or (2B) applies for the income year (except to the extent that capital gains against which those amounts are applied are included in the actual payment made in relation to the income year). Step 2. Work out what it is reasonable to expect will be the * net income of the trust for the income year: (aa) increasing the net income by any amounts to which subsection (2A) or (2B) applies for the income year; and (a) disregarding (except to the extent that they are amounts to which subsection (2A) or (2B) applies for the income year) excluded amounts, expected excluded amounts and deductions relating to those amounts; and (b) on the basis that a * capital gain from * taxable Australian property of the trust that was or would be reduced under step 5 of the method statement in subsection 102 ‑ 5(1) of the Income Tax Assessment Act 1997 were double the amount it actually is. Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to: (a) the object of this section; and (b) the step 1 amount; and (c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and (d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year. (2A) If: (a) during an income year, a * capital loss from a * CGT event happens in relation to a * CGT asset that is not * taxable Australian property; and (b) in relation to that income year, some or all of the capital loss is applied against a * capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property; this subsection applies, for that income year, to the amount that is so applied. (2B) If: (a) the trust has a * net capital loss for an income year; and (b) one or more of the * capital losses the trust made during that income year were from * CGT events that happened in relation to * CGT assets that were not * taxable Australian property; and (c) in relation to a later income year, some or all of the net capital loss is applied against a * capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property; this subsection applies, for the later income year, to an amount equal to so much of the net capital loss that is so applied as related to capital losses mentioned in paragraph (b). (3) The expected * net income of the trust and the expected amounts of future * fund payments are to be worked out on the basis of the trustee’s knowledge when the actual payment is made. (4) However, an amount is not a fund payment in relation to the income year unless it is paid: (a) during the income year; or (b) within 3 months after the end of the income year; or (c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 months) allowed by the Commissioner. (5) The Commissioner may allow a longer period as mentioned in paragraph (4)(c) only if the Commissioner is of the opinion that the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 15 of 2019, effective sch 1 (items 19 ‑ 33, 46): 1 Apr 2019 (s 2(1) item 2) | Amended by No 49 of 2026, effective sch 1 (items 52, 53, 80, 81): 1 July 2026 (s 2(1) items 2, 4)

s 12-410 — Entity to whom payment is made

(1) An entity (the recipient ) is covered by this section for a payment made to it by another entity (the payer ) if: (a) according to any record that is in the payer’s possession, or is kept or maintained on the payer’s behalf, the recipient has an address outside Australia; or (b) the payer is authorised to make the payment to a place outside Australia. (2) However, a recipient is not covered by this section for a payment if, at the time the payment was made, a * business the recipient carries on is carried on at or through an * Australian permanent establishment and the payment is attributable to that establishment.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent

s 12-415 — Failure to give notice or make information available: administrative penalty

An entity that: (a) is required to give a notice, or make details available on a website, under section 12 ‑ 395 in relation to: (i) a payment made to another entity; or (ii) an amount paid or credited to, or dealt with on behalf of or as directed by, another entity; and (b) fails to comply with that section; is liable to pay to the Commissioner a penalty equal to the amount that would have been required to be withheld under this Subdivision (disregarding subsection 12 ‑ 385(5) and paragraph 12 ‑ 390(10)(b)) in relation to amounts attributable to the payment or amount if the notice had been given or the details had been made available. Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent

s 12-420 — Agency rules

(1) This section applies to: (a) a payment (the first payment ) made to an entity (the first entity ) in the capacity as * agent for another entity; and (b) another payment made by the first entity to the extent that it is reasonably attributable to the first payment. (2) This Subdivision has effect as if the first entity were not an * agent in relation to the payments. Note: As a result of subsection (2), an agent may be required to withhold amounts under this Subdivision.

Amendment history: Inserted by No 79 of 2007, effective sch 8 (items 3, 26(1), (2)): 1 July 2007 sch 10 (items 1, 2, 14 ‑ 32): Royal Assent | Repealed and substituted by No 32 of 2008, effective sch 1 (items 1, 24 ‑ 58): Royal Assent

s 12-425 — Meaning of clean building managed investment trust

(1) A trust is a clean building managed investment trust in relation to an income year if during the income year: (a) it is a * withholding MIT in relation to the income year; and (b) it holds one or more * clean buildings (including the land on which the buildings are situated); and (c) it does not derive assessable income from any * taxable Australian property (other than from the clean buildings or assets that are reasonably incidental to those buildings). 5% safe harbour for certain income reasonably incidental to a clean building (2) A trust is not a * clean building managed investment trust in relation to an income year if the assessable income of the trust that is derived from assets that are reasonably incidental to * clean buildings is greater than 5% of the assessable income of the trust that is derived from clean buildings. (3) The regulations may specify kinds of assets that are, or are not, reasonably incidental to * clean buildings for the purposes of this section.

Amendment history: Inserted by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2) | Amended by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12-430 — Meaning of clean building

(1) A building is a clean building if: (a) the construction of the building commenced on or after 1 July 2012; and (b) it satisfies the requirements in subsections (3) and (4). (2) For the purpose of subsection (1): (a) the construction of the building is taken to have commenced at the time the works on the lowest level (including any basement level) of the building commence; and (b) the construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced. (3) A building satisfies the requirements in this subsection if: (a) the building is a commercial building that is any of the following (or is a combination of any of the following): (i) an office building; (ii) a hotel for use wholly or mainly to provide short ‑ term accommodation for travellers; (iii) a shopping centre; or (b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph. (4) A building satisfies the requirements in this subsection if: (a) the building: (i) has, and continues to maintain at all times during the income year, at least a 5 Star Green Star rating as certified by the Green Building Council of Australia; or (ii) has, and continues to maintain at all times during the income year, at least a 5.5 star energy rating as accredited by the National Australian Built Environment Rating System ( NABERS ); or (b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph. (5) For the purposes of subsection (4), if: (a) a building has previously satisfied the requirements in that subsection; and (b) the building then fails to satisfy the requirements for a period (the non ‑ compliance period ); and (c) within 180 days after the first day of that failure, the building again satisfies the requirements; treat the building as having satisfied the requirements during the non ‑ compliance period.

Amendment history: Inserted by No 185 of 2012, effective sch 1 (items 7 ‑ 20): 10 Dec 2012 (s 2)

s 12-435 — Meaning of non ‑ concessional MIT income

Non ‑ concessional MIT income means any of the following: (a) * MIT cross staple arrangement income; (b) * MIT trading trust income; (c) * MIT agricultural income; (d) * MIT residential housing income.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-436 — Meaning of asset entity , operating entity , cross staple arrangement and stapled entity

(1) An asset entity in relation to an income year is a trust or partnership that is not covered by subsection 275 ‑ 10(4) of the Income Tax Assessment Act 1997 in relation to the income year. (2) An operating entity in relation to an income year is a trust, partnership or company that is covered by subsection 275 ‑ 10(4) of the Income Tax Assessment Act 1997 in relation to the income year. (3) For the purposes of this section, in determining whether a partnership or company is covered by subsection 275 ‑ 10(4) of the Income Tax Assessment Act 1997 , treat the partnership or company as a trust. (4) A cross staple arrangement is an * arrangement that is entered into by 2 or more entities (the arrangement entities ) if: (a) at least one of the arrangement entities is an * asset entity; and (b) at least one of the arrangement entities is an * operating entity; and (c) the following conditions are satisfied: (i) one or more other entities (the external entities ) each hold a * total participation interest in each arrangement entity; (ii) the sum of the total participation interests held by the external entities in each arrangement entity is 80% or more. (5) For the purposes of subparagraph (4)(c)(ii), in working out the sum of the * total participation interests held by the external entities in each arrangement entity, take into account: (a) a particular * direct participation interest; or (b) a particular * indirect participation interest; held in the arrangement entity only once if it would otherwise be counted more than once. (6) Subsection (7) applies if: (a) an external entity holds * total participation interests in 2 or more arrangement entities; and (b) either: (i) the amount (the lowest participation interest amount ) of one of those participation interests falls short of the amount of each of the other participation interests; or (ii) the amount (the lowest participation interest amount ) of 2 or more of those participation interests is the same but falls short of the amount of each of the other participation interests. (7) For the purposes of paragraph (4)(c), treat the amount of the * total participation interest held by the external entity in each of the arrangement entities as being equal to the lowest participation interest amount. (8) Each of the entities that entered into the * cross staple arrangement is a stapled entity in relation to the cross staple arrangement.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-437 — Meaning of MIT cross staple arrangement income

(1) This section applies if: (a) an amount is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and (c) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12 ‑ 405(1)(a), (b), (c), (d) or (e). (2) The amount is MIT cross staple arrangement income of the * managed investment trust if: (a) either: (i) the * managed investment trust is an * asset entity in relation to the income year and is a * stapled entity in relation to a * cross staple arrangement; or (ii) the second entity is an asset entity in relation to the income year and is a stapled entity in relation to a cross staple arrangement; and (b) either: (i) if subparagraph (a)(i) applies—the second entity is an * operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; or (ii) if subparagraph (a)(ii) applies—another entity (the third entity ) is an operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; and (c) either: (i) if subparagraph (a)(i) applies—the amount is derived, received or made by the managed investment trust from the second entity; or (ii) if subparagraph (a)(ii) applies—the amount is attributable to an amount derived, received or made by the second entity from the third entity. (3) The amount is not MIT cross staple arrangement income of the * managed investment trust under subsection (2) to the extent that it is attributable to an amount that satisfies the following requirements: (a) the amount is derived, received or made by a * stapled entity in relation to the * cross staple arrangement from an entity that is not a stapled entity in relation to the cross staple arrangement; (b) the amount mentioned in paragraph (a) is * rent from land investment. (4) The amount is not MIT cross staple arrangement income of the * managed investment trust under subsection (2) to the extent that it is, or is attributable to, an amount covered by subsection 12 ‑ 438(1). Note: The managed investment trust may be an asset entity in relation to the cross staple arrangement. If so, it may have no MIT cross staple arrangement income for the income year as a result of the operation of this subsection. (5) The amount is not MIT cross staple arrangement income of the * managed investment trust under subsection (2) to the extent that it is, or is attributable to, * rent from land investment that is: (a) attributable to a facility, or an improvement to a facility; and (b) referable to a time in the income year when the facility, or the improvement to the facility, is covered by section 12 ‑ 439. (6) Subsection (7) applies if: (a) an * asset entity in relation to the income year mentioned in paragraph (1)(a) makes a * capital gain because an * operating entity in relation to the income year * acquires an asset from the asset entity; and (b) the asset entity and the operating entity are * stapled entities in relation to the * cross staple arrangement. (7) The amount is not MIT cross staple arrangement income of the * managed investment trust under subsection (2) to the extent that it is attributable to the * capital gain.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-438 — MIT cross staple arrangement income—de minimis exception

(1) For the purposes of subsection 12 ‑ 437(4), this subsection covers an amount if: (a) the amount is * MIT cross staple arrangement income for the income year of an * asset entity in relation to the * cross staple arrangement; and (b) the MIT cross staple arrangement income of the asset entity for the previous income year does not exceed 5% of the amount mentioned in subsection (3). (2) For the purposes of subsection (1), in working out the * MIT cross staple arrangement income of the * asset entity for the previous income year, disregard subsections 12 ‑ 437(4) and (5). (3) The amount is: (a) if the * asset entity is not an * AMIT for the income year—the assessable income of the asset entity for the previous income year (worked out for the purposes of determining the * net income of the asset entity for the income year); or (b) if the asset entity is an AMIT for the income year—the total assessable income (as mentioned in subsection 276 ‑ 265(2) of the Income Tax Assessment Act 1997 ) of the asset entity for the previous income year. (4) For the purposes of subsection (3), in working out the assessable income, or the total assessable income, of the * asset entity for the previous income year, disregard any * net capital gain of the asset entity for that year. (5) If the * asset entity did not exist in the previous income year: (a) treat references in this section to the previous income year as instead being references to the income year; and (b) treat references in this section to the * MIT cross staple arrangement income of the asset entity as instead being references to a reasonable estimate of the MIT cross staple arrangement income of the asset entity; and (c) treat references in this section to the assessable income of the asset entity as instead being references to a reasonable estimate of the assessable income of the asset entity; and (d) treat references in this section to the total assessable income of the asset entity as instead being references to a reasonable estimate of the total assessable income of the asset entity. (6) If the * asset entity exists in an income year, but is not a * managed investment trust in relation to that income year, for the purposes of this section, treat it as a managed investment trust in relation to that income year that is not an * AMIT for that income year.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-439 — MIT cross staple arrangement income—approved economic infrastructure facility exception

(1) This section covers a facility at a time if: (a) the facility is covered by an approval of the Treasurer under this section that is in force at that time; and (b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use. (2) This section covers an improvement to a facility at a time if: (a) the improvement to the facility is covered by an approval of the Treasurer under this section that is in force at that time; and (b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use after it has been improved under the improvement. (3) An * Australian government agency (other than the Commonwealth) may make an application to the Treasurer in respect of a facility, or an improvement to a facility, specified in the application. (4) The Treasurer may approve the facility, or the improvement to the facility, specified in the application under subsection (3) if the Treasurer is satisfied that the following criteria are met: (a) the facility is an * economic infrastructure facility; (b) in the case of an application in respect of a facility: (i) the estimated capital expenditure on the facility is $500 million or more; and (ii) the facility is yet to be constructed; and (iii) the facility will significantly enhance the long ‑ term productive capacity of the economy; and (iv) approving the facility is in the national interest; (c) in the case of an application in respect of an improvement to a facility: (i) the estimated capital expenditure on the improvement is $500 million or more; and (ii) the improvement is yet to be constructed; and (iii) the improvement will significantly enhance the long ‑ term productive capacity of the economy; and (iv) approving the improvement is in the national interest. (5) An economic infrastructure facility is a facility that is any of the following: (a) transport infrastructure; (b) energy infrastructure; (c) communications infrastructure; (d) water infrastructure. (6) An approval under subsection (4): (a) must be in writing; and (b) must specify the facility, or the improvement, that is approved; and (c) must specify the date on which the approval comes into force; and (d) may contain any other information that the Treasurer considers appropriate. (7) The Treasurer may publish an approval under subsection (4) in any way that he or she considers appropriate. (8) If the Treasurer decides not to approve the facility, or the improvement to a facility, specified in the application under subsection (3), the Treasurer must notify the applicant of the decision, in writing, as soon as practicable after making the decision.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3) | Amended by No 127 of 2021, effective sch 3 (items 43, 47, 48, 64): 1 Jan 2022 (s 2(1) item 5)

s 12-440 — Transitional—MIT cross staple arrangement income

(1) This section applies if: (a) before 27 March 2018, an * Australian government agency: (i) decided to approve the * acquisition, creation or lease of a facility; and (ii) publicly announced that decision; and (iii) took significant preparatory steps to implement that decision; and (b) either: (i) a * cross staple arrangement was entered into in relation to the facility before 27 March 2018; or (ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and (c) all the entities that are * stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and (d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5). (2) This section also applies if: (a) any of the following applies: (i) an entity entered into a contract before 27 March 2018 for the * acquisition, creation or lease of a facility; (ii) an entity owns, or is the lessee of, a facility at a time before 27 March 2018; and (b) either: (i) a * cross staple arrangement was entered into in relation to the facility before 27 March 2018; or (ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and (c) all the entities that are * stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and (d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5). (3) An amount included in the assessable income for an income year of a * managed investment trust is not MIT cross staple arrangement income of the managed investment trust if: (a) the amount is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and (b) the amount relates to the facility; and (c) the second entity is a * stapled entity in relation to the * cross staple arrangement; and (d) either: (i) if subparagraph 12 ‑ 437(2)(a)(i) applies—the amount is * rent from land investment paid from an * operating entity in relation to the cross staple arrangement to the managed investment trust; or (ii) if subparagraph 12 ‑ 437(2)(a)(ii) applies—the amount is attributable to rent from land investment paid from an operating entity in relation to the cross staple arrangement to an * asset entity in relation to the cross staple arrangement; and (e) the time when the amount was derived, received or made by the managed investment trust meets the requirements in subsection (4). (4) The time meets the requirements in this subsection if: (a) where the facility to which the * cross staple arrangement relates is not an * economic infrastructure facility—the time is before 1 July 2031 and before the later of: (i) 1 July 2026; and (ii) the end of the period of 7 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income; or (b) where the facility to which the cross staple arrangement relates is an economic infrastructure facility—the time is before 1 July 2039 and before the later of: (i) 1 July 2034; and (ii) the end of the period of 15 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income. (5) An entity makes a choice in accordance with this subsection if: (a) the entity makes the choice in the * approved form; and (b) the entity makes the choice no later than: (i) 30 June 2019; or (ii) a later time allowed by the Commissioner; and (c) the entity gives the choice to the Commissioner within 60 days after the entity makes the choice. (6) The choice cannot be revoked.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-441 — Integrity rule—concessional cross staple rent cap

(1) This section applies if: (a) a * managed investment trust in relation to an income year derives, receives or makes an amount of * excepted MIT CSA income for the income year; and (b) if the amount is excepted MIT CSA income because of subsection 12 ‑ 440(3)—paragraph 12 ‑ 440(4)(b) applies (15 year concession); and (c) the amount of excepted MIT CSA income is, or is attributable to, * rent from land investment under a lease (the cross staple lease ) entered into by: (i) the * asset entity mentioned in paragraph 12 ‑ 437(2)(a) (the relevant asset entity ); and (ii) the * operating entity mentioned in paragraph 12 ‑ 437(2)(b) (the relevant operating entity ). (2) To the extent (if any) that the amount of the relevant asset entity’s * excepted MIT CSA income exceeds its * concessional cross staple rent cap for the income year, the following provisions do not apply to the amount of the * managed investment trust’s excepted MIT CSA income mentioned in paragraph (1)(a): (a) subsection 12 ‑ 437(5); (b) subsection 12 ‑ 440(3). (3) If the relevant asset entity is not a * managed investment trust in relation to the income year, for the purposes of subsection (2), treat it as a managed investment trust in relation to the income year.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-442 — Meaning of excepted MIT CSA income

An amount is excepted MIT CSA income of a * managed investment trust in relation to an income year if it would be * MIT cross staple arrangement income of the managed investment trust but for any of the following provisions: (a) subsection 12 ‑ 437(5); (b) subsection 12 ‑ 440(3).

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-443 — Concessional cross staple rent cap—existing lease with specified rent or rent method

(1) This section applies if: (a) the amount mentioned in subsection 12 ‑ 441(1) is * excepted MIT CSA income because of subsection 12 ‑ 440(3); and (b) the cross staple lease was entered into before 27 March 2018; and (c) the cross staple lease, or associated documents, specified any of the following before 27 March 2018: (i) the amount of annual rent under the lease for the first year of the lease that ends after 27 March 2018; (ii) an objective method for determining the amount of annual rent under the lease; and (d) if subparagraph (c)(ii) applies—the method is set out in the cross staple lease, or the associated documents, before 27 March 2018. (2) If subparagraph (1)(c)(ii) applies, the concessional cross staple rent cap for an income year of the * managed investment trust is the amount of annual rent determined for the income year under the method mentioned in that subparagraph. (3) If subparagraph (1)(c)(ii) does not apply, the concessional cross staple rent cap for an income year of the * managed investment trust is: (a) for an income year where the lease, or the associated documents, specify the amount of annual rent for the corresponding year of the lease under subsection (4)—that amount; or (b) for an income year where that amount is not so specified—the amount worked out under paragraph (a) in relation to the most recent year of the lease for which an amount is so specified, indexed annually in accordance with Subdivision 960 ‑ M of the Income Tax Assessment Act 1997 . (4) An income year and a year of the lease correspond to each other under this subsection if both of those years end: (a) after a particular 27 March; and (b) on or before the next 27 March.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-444 — Concessional cross staple rent cap—general

(1) This section applies if section 12 ‑ 443 does not apply. (2) The concessional cross staple rent cap for an income year of the * managed investment trust is worked out as follows: (a) first, work out a reasonable estimate of whichever of the following is applicable: (i) if the relevant asset entity is a trust that is not an * AMIT—the relevant asset entity’s * net income, or * tax loss, for the income year; (ii) if the relevant asset entity is an AMIT—the sum of the relevant asset entity’s * trust components with the character of assessable income, or the relevant asset entity’s tax loss, for the income year; (iii) if the relevant asset entity is a partnership—the relevant asset entity’s net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936 ), for the income year; (b) next, work out a reasonable estimate of whichever of the following is applicable: (i) if the relevant operating entity is a trust that is not an AMIT—the operating asset entity’s net income, or tax loss, for the income year; (ii) if the relevant operating entity is a partnership—the relevant operating entity’s net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936 ), for the income year; (iii) otherwise—the relevant operating entity’s taxable income or tax loss for the income year; (c) next, add the results of paragraphs (a) and (b); (d) next, multiply the result of paragraph (c) by 0.8; (e) next, subtract the result of paragraph (a) from the result of paragraph (d); (f) next, add the amount of * excepted MIT CSA income mentioned in subsection 12 ‑ 441(1) to the result of paragraph (e). If the result of paragraph (f) is a positive number, the concessional cross staple rent cap is that result. Otherwise, the concessional cross staple rent cap is nil. (3) For the purposes of paragraphs (2)(a) and (b): (a) treat the amount of a * tax loss, or of a partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936 ), as a negative number; and (b) disregard any * tax loss for a previous income year of the relevant asset entity or relevant operating entity.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-445 — Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income

(1) This section applies if: (a) an entity is an * asset entity in relation to an income year and is a * stapled entity in relation to a * cross staple arrangement; and (b) the entity is entitled to a deduction for the income year against its assessable income that arises from * rent from land investment that it derives or receives in the income year; and (c) the entity derives, receives or makes an amount of * excepted MIT CSA income in the income year (disregarding this section and subsection 12 ‑ 441(2)); and (d) the amount of that excepted MIT CSA income exceeds the entity’s * concessional cross staple rent cap for the income year. (2) The amount of the deduction can only be deducted against an amount of assessable income of the * asset entity as follows: (a) first, the amount can only be deducted against an amount of assessable income that is * excepted MIT CSA income, to the extent that the excepted MIT CSA income does not exceed the entity’s * concessional cross staple rent cap for the income year; (b) next, if an amount of the deduction remains after applying the rule in paragraph (a), the amount can only be deducted against an amount of assessable income that is * MIT cross staple arrangement income; (c) next, if an amount of the deduction remains after applying the rules in paragraphs (a) and (b), the amount can be deducted against an amount of assessable income in accordance with other provisions of this Act. (3) If the * asset entity is not a * managed investment trust in relation to the income year, for the purposes of determining whether an amount of its assessable income for the income year is * MIT cross staple arrangement income, treat it as a managed investment trust in relation to the income year.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-446 — Meaning of MIT trading trust income

(1) This section applies if: (a) an amount is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and (c) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12 ‑ 405(1)(a), (b), (c), (d) or (e). (2) The amount is MIT trading trust income of the * managed investment trust if: (a) the managed investment trust holds a * total participation interest in the second entity of greater than nil; and (b) the amount arises because of that total participation interest; and (c) the second entity: (i) is a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to the income year; or (ii) is a partnership or a trust that is not a unit trust, but would be such a trading trust in relation to the income year if it were a unit trust throughout the income year; and (d) the second entity is not a * public trading trust in relation to the income year. (3) The amount is not MIT trading trust income of the * managed investment trust under subsection (2) to the extent that it is attributable to a * capital gain made from * CGT event E4 or * CGT event E10.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-447 — Transitional— MIT trading trust income

(1) This section applies if: (a) an amount (the relevant amount ) included in the assessable income for an income year of a * managed investment trust is * MIT trading trust income of the managed investment trust (disregarding this section); and (b) immediately before 27 March 2018, the managed investment trust held a * total participation interest (the pre ‑ announcement TPI ) of greater than nil in the second entity mentioned in subsection 12 ‑ 446(1) (the second entity ); and (c) the relevant amount was derived, received or made by the managed investment trust before 1 July 2026. (2) Treat part of the relevant amount as not being * MIT trading trust income of the * managed investment trust. (3) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (4) and (5). (4) If the * total participation interest (the post ‑ announcement TPI ) held by the * managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre ‑ announcement TPI, work out that fraction by dividing: (a) the pre ‑ announcement TPI; by: (b) the post ‑ announcement TPI. (5) Otherwise, the fraction is 1.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-448 — Meaning of MIT agricultural income , Australian agricultural land for rent and Division 6C land

(1) This section applies if: (a) an amount is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12 ‑ 405(1)(a), (b), (c), (d) or (e). (2) The amount is MIT agricultural income of the * managed investment trust to the extent that it is attributable to an asset that is * Australian agricultural land for rent (whether or not held by the managed investment trust). (3) Australian agricultural land for rent is * Division 6C land situated in Australia that: (a) is used, or could reasonably be used, for carrying on a * primary production business; and (b) is held primarily for the purposes of deriving or receiving rent. (4) For the purposes of this section, if an * economic infrastructure facility is a fixture on * Australian agricultural land for rent: (a) treat the economic infrastructure facility as being separate from the Australian agricultural land for rent; and (b) treat the economic infrastructure facility as not being Australian agricultural land for rent. (5) Division 6C land is land (within the meaning of Division 6C of Part III of the Income Tax Assessment Act 1936 ), and includes a thing if an investment in the thing would be an investment in land under subsection 102MB(1) of that Act.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-449 — Transitional—MIT agricultural income

(1) This section applies if: (a) an amount (the relevant amount ) is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the relevant amount would be * MIT agricultural income (disregarding this section) of the managed investment trust because it is attributable to an asset that is * Australian agricultural land for rent; and (c) the managed investment trust derived, received or made the relevant amount before 1 July 2026; and (d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the asset: (i) the managed investment trust held the asset just before 27 March 2018; or (ii) before 27 March 2018, the managed investment trust entered into a contract for the * acquisition or lease of the asset; and (e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity ) held the asset: (i) the second entity held the asset just before 27 March 2018; or (ii) before 27 March 2018, the second entity entered into a contract for the acquisition or lease of the asset; and (f) if paragraph (e) applies—immediately before 27 March 2018, the managed investment trust held a * total participation interest (the pre ‑ announcement TPI ) of greater than nil in the second entity. (2) If paragraph (1)(d) applies, treat the relevant amount as not being * MIT agricultural income of the * managed investment trust. (3) If paragraph (1)(e) applies, treat part of the relevant amount as not being * MIT agricultural income of the * managed investment trust. (4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6). (5) If the * total participation interest (the post ‑ announcement TPI ) held by the * managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre ‑ announcement TPI, work out that fraction by dividing: (a) the pre ‑ announcement TPI; by: (b) the post ‑ announcement TPI. (6) Otherwise, the fraction is 1.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-450 — Meaning of MIT residential housing income

(1) This section applies if: (a) an amount is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12 ‑ 405(1)(a), (b), (c), (d) or (e). (2) The amount is MIT residential housing income of the * managed investment trust to the extent that it is attributable to a * residential dwelling asset (whether or not held by the managed investment trust). Asset used to provide affordable housing (3) The amount is not MIT residential housing income of the * managed investment trust under subsection (2) to the extent that it is referable to the use of the * residential dwelling asset to * provide affordable housing. (4) If the amount is, or is attributable to, a * capital gain from a * CGT event, subsection (3) applies only if: (a) the entity that held the * residential dwelling asset just before the time (the CGT event time ) when the CGT event happened had held it for at least 3,650 days (consecutive or not); and (b) each of those days satisfies the following requirements: (i) the day is on or after 1 July 2017 and before the CGT event time; (ii) the residential dwelling asset was used on the day to * provide affordable housing. Income from a build to rent development (5) Subject to subsection (7), the amount is not MIT residential housing income of the * managed investment trust under subsection (2) to the extent any of the following paragraphs applies to the amount in relation to a * dwelling of an * active build to rent development: (a) the amount is, or is referable to, a payment of rental income under a lease of the dwelling; (b) the amount is, or is attributable to, a * capital gain from a * CGT event in relation to the dwelling; (c) all of the following subparagraphs apply: (i) the amount is, or is attributable to, a part of a capital gain from a CGT event in relation to a * membership interest in an entity; (ii) just before the time of the CGT event, all or part of the * market value of the membership interest is referable to the dwelling; (iii) subsection (6) applies to the part of the capital gain. (6) This subsection applies to the part of a * capital gain mentioned in paragraph (5)(c) worked out as follows: where: value of the interest in the dwelling means so much of the value of the membership interest as is referable to the * dwelling. value of the membership interest means the * market value of the * membership interest just before the time of the * CGT event. (7) Subsection (5) does not apply to an amount if: (a) the * build to rent compliance period for each of the * dwellings of the * active build to rent development has ended; and (b) assuming that the build to rent compliance period for each of the dwellings had not ended, the active build to rent development would have * ceased to be an active build to rent development.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3) | Amended by No 138 of 2024, effective sch 1 (items 13 ‑ 25), sch 4: 1 Jan 2025 (s 2(1) items 2, 5)

s 12-451 — Transitional—MIT residential housing income

(1) This section applies if: (a) an amount (the relevant amount ) is included in the assessable income for an income year of a * managed investment trust in relation to the income year (worked out for the purposes of determining the trust’s * net income, or in the case of an * AMIT, the trust’s total assessable income, for the income year); and (b) the relevant amount would be * MIT residential housing income (disregarding this section) of the * managed investment trust because it is attributable to a facility that consists of or contains a * residential dwelling asset; and (c) the managed investment trust derived, received or made the relevant amount before 1 October 2027; and (d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the facility: (i) the managed investment trust held the facility just before the time mentioned in subsection (7); or (ii) before the time mentioned in subsection (7), the managed investment trust entered into a contract for the * acquisition, creation or lease of the facility; and (e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity ) held the facility: (i) the second entity held the facility just before the time mentioned in subsection (7); or (ii) before the time mentioned in subsection (7), the second entity entered into a contract for the acquisition, creation or lease of the facility; and (f) if paragraph (e) applies—immediately before the time mentioned in subsection (7), the managed investment trust held a * total participation interest (the pre ‑ announcement TPI ) of greater than nil in the second entity. (2) If paragraph (1)(d) applies, treat the relevant amount as not being * MIT residential housing income of the * managed investment trust. (3) If paragraph (1)(e) applies, treat part of the relevant amount as not being * MIT residential housing income of the * managed investment trust. (4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6). (5) If the * total participation interest (the post ‑ announcement TPI ) held by the * managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre ‑ announcement TPI, work out that fraction by dividing: (a) the pre ‑ announcement TPI; by: (b) the post ‑ announcement TPI. (6) Otherwise, the fraction is 1. (7) The time is 4.30 pm, by legal time in the Australian Capital Territory, on 14 September 2017.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-452 — Meaning of residential dwelling asset

(1) A residential dwelling asset is an asset that: (a) is a * dwelling; and (b) is * taxable Australian real property; and (c) is * residential premises (other than * commercial residential premises); and (d) is not a dwelling that: (i) is used primarily to provide specialist disability accommodation (within the meaning of the National Disability Insurance Scheme (Specialist Disability Accommodation Conditions) Rule 2018 ); and (ii) is enrolled in accordance with section 6 of that Rule; and (e) is not a dwelling that: (i) is used primarily to provide disability accommodation; and (ii) is a dwelling of a kind prescribed by the regulations for the purposes of this subparagraph. (2) Section 118 ‑ 120 (Extension to adjacent land) applies in relation to this section in the same way as it applies in relation to Subdivision 118 ‑ B. (3) To avoid doubt, for the purposes of applying section 118 ‑ 120 in relation to this section, a * dwelling’s * adjacent land may include land used primarily for private or domestic purposes in association with the dwelling and with one or more other dwellings.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-453 — MIT agricultural income and MIT residential housing income—capital gains in relation to membership interests

(1) Subsection (2) applies if: (a) any of the following provisions apply in relation to an amount: (i) section 12 ‑ 448; (ii) section 12 ‑ 450; and (b) the amount is, or is attributable to, a * capital gain from a * CGT event in relation to an asset that is a * membership interest in an entity; and (c) just before the CGT event happened, the entity held, directly or indirectly, one or more assets that are any of the following; (i) * Australian agricultural land for rent; (ii) a * residential dwelling asset. (2) For the purposes of subsections 12 ‑ 448(2) and 12 ‑ 450(2): (a) in a case where the * membership interest mentioned in subsection (1) passes the principal asset test in section 855 ‑ 30 of the Income Tax Assessment Act 1997 immediately before the time the * CGT event happens: (i) if the assets mentioned in paragraph (1)(c) are all * Australian agricultural land for rent—treat the * capital gain as being wholly attributable to the Australian agricultural land for rent; or (ii) if the assets mentioned in paragraph (1)(c) are all * residential dwelling assets—treat the capital gain as being wholly attributable to residential dwelling assets; or (iii) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the * market value of the membership interest that is attributable to Australian agricultural land for rent equals or exceeds the market value of the membership interest that is attributable to residential dwelling assets—treat the capital gain as being wholly attributable to Australian agricultural land for rent; or (iv) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the market value of the membership interest that is attributable to Australian agricultural land for rent falls short of the market value of the membership interest that is attributable to residential dwelling assets—treat the capital gain as being wholly attributable to residential dwelling assets; or (b) in any other case—treat the capital gain: (i) as not being attributable to Australian agricultural land for rent; and (ii) as not being attributable to residential dwelling assets. (3) For the purposes of subsection (2), in determining whether the * membership interest passes the principal asset test, treat references in section 855 ‑ 30 of the Income Tax Assessment Act 1997 to * taxable Australian real property as instead being references to an asset that is any of the following: (a) * Australian agricultural land for rent; (b) a * residential dwelling asset. (4) For the purposes of this section, in working out the * market value of an asset, work out that market value just before the time the * CGT event mentioned in paragraph (1)(b) happens.

Amendment history: Inserted by No 34 of 2019, effective sch 1 (items 6 ‑ 11, 16), sch 5 (items 3 ‑ 5): 1 July 2019 (s 2(1) items 2, 3)

s 12-460 — FHSS released amounts

The Commissioner must withhold an amount from the * FHSS released amounts paid in respect of a person.

Amendment history: Inserted by No 132 of 2017, effective sch 1 (items 1 ‑ 5, 13 ‑ 20): 1 July 2018 (s 2(1) item 2) sch 2 (items 6, 7): 1 Jan 2018 (s 2(1) item 3)

s 12A-1 — What this Division is about

When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member. The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments. Withholding liabilities under Subdivisions 12 ‑ F and 12 ‑ H do not apply in relation to deemed payments (although analogous liabilities may arise under Subdivision 12A ‑ C). AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-5 — What this Subdivision is about

Withholding liabilities under Subdivision 12 ‑ F do not apply in relation to deemed payments arising under Subdivision 12A ‑ C relating to dividends, interest or royalties (although analogous liabilities may arise under Subdivision 12A ‑ C). AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments. Table of sections Operative provisions 12A ‑ 10 Deemed payments—no obligation to withhold under Subdivision 12 ‑ F (dividend, interest and royalty payments) 12A ‑ 15 Dividend, interest or royalty payments relating to AMIT—requirement to give notice or make information available 12A ‑ 20 Failure to give notice or make information available under section 12A ‑ 15: administrative penalty 12A ‑ 25 Meaning of AMIT DIR payment 12A ‑ 30 Meaning of AMIT dividend payment 12A ‑ 35 Meaning of AMIT interest payment 12A ‑ 40 Meaning of AMIT royalty payment

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-10 — Deemed payments—no obligation to withhold under Subdivision 12 ‑ F (dividend, interest and royalty payments)

(1) If the entity that receives a payment as mentioned in subsection 12 ‑ 215(1), 12 ‑ 250(1) or 12 ‑ 285(1) is the trustee of an * AMIT, the entity need not withhold an amount under that subsection from the payment if the payment arises because of the operation of section 12A ‑ 205 (deemed payments). Note: The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A ‑ C). (2) Subsection (3) applies if: (a) the entity that receives a payment as mentioned in subsection 12 ‑ 215(1), 12 ‑ 250(1) or 12 ‑ 285(1) is a * custodian; and (b) it received the payment from an * AMIT. (3) The entity need not withhold an amount under that subsection from the payment mentioned in that subsection if: (a) the payment arises because of the operation of section 12A ‑ 205 (deemed payments); or (b) the payment is a * post ‑ AMMA actual payment in respect of a payment that so arises. Note: Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A ‑ C). (4) Disregard this section for the purposes of section 12A ‑ 15.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-15 — Dividend, interest or royalty payments relating to AMIT—requirement to give notice or make information available

AMITs and custodians (1) An entity that is an * AMIT or a * custodian must comply with subsection (2) if: (a) the entity makes a payment to another entity (the recipient ) from which an amount would have been required to be withheld under Subdivision 12 ‑ F if: (i) the entity were a company; and (ii) the payment had been made to a foreign resident; and (iii) the condition in either or both of paragraphs 12 ‑ 210(a) or (b), of paragraphs 12 ‑ 245(a) or (b) or of paragraphs 12 ‑ 280(a) or (b) (as the case requires) were satisfied; and (b) an amount is not required to be withheld from the payment because: (i) the recipient is not a foreign resident; or (ii) the recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936 ) of the recipient in Australia, and the payment is attributable to the permanent establishment; and (c) the payment is any of the following: (i) a payment that arises because of the operation of section 12A ‑ 205 (deemed payments); (ii) a * pre ‑ AMMA actual payment in respect of a payment that so arises. (2) The entity must: (a) give to the recipient a written notice containing the details specified in subsection (3); or (b) make those details available on a website in a way that the details are readily accessible to the recipient for not less than 5 continuous years. (3) The notice must be given, or the details must be made available on a website, before or at the time when the payment is made and: (a) must specify the part of the payment from which an amount would have been so required to have been withheld; and (b) must specify the income year of the * AMIT to which that part relates. Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12A ‑ 20. Other entities (4) An entity that is not an * AMIT or a * custodian must comply with subsection (5) if: (a) the entity receives a payment; and (b) another entity (the subsequent recipient ) is or becomes entitled: (i) to receive from the entity; or (ii) to have the entity credit to the subsequent recipient, or otherwise deal with on the subsequent recipient’s behalf or as the subsequent recipient directs; an amount attributable to the payment; and (c) the entity would have been required to withhold an amount from the payment under subsection 12 ‑ 215(1), 12 ‑ 250(1) or 12 ‑ 285(1) if the subsequent recipient had been a foreign resident; and (d) an amount is not required to be withheld from the payment because: (i) the subsequent recipient is not a foreign resident; or (ii) the subsequent recipient is a foreign resident carrying on business in Australia at or through a permanent establishment (within the meaning of subsection 128B(3F) of the Income Tax Assessment Act 1936 ) of the subsequent recipient in Australia, and the payment is attributable to the permanent establishment; and (e) the payment is any of the following: (i) a payment that arises because of the operation of section 12A ‑ 205 (deemed payments); (ii) a * pre ‑ AMMA actual payment in respect of a payment that so arises. (5) The entity must: (a) give to the subsequent recipient a written notice containing the details specified in subsection (6); or (b) make those details available on a website in a way that the details are readily accessible to the subsequent recipient for not less than 5 continuous years. (6) The notice must be given, or the details must be made available on a website, before or at the time when the amount is paid or credited to the subsequent recipient, or is dealt with on the subsequent recipient’s behalf or as the subsequent recipient directs, and: (a) must specify the part of the payment referred to in paragraph (4)(a) from which an amount would have been so required to have been withheld; and (b) must specify the income year of the * AMIT to which that part relates. Note: Failure to give the notice or make the details available as required by this section incurs an administrative penalty: see section 12A ‑ 20.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-20 — Failure to give notice or make information available under section 12A ‑ 15: administrative penalty

An entity that: (a) is required to give a notice, or make details available on a website, under section 12A ‑ 15 in relation to: (i) a payment made to another entity; or (ii) an amount paid or credited to, or dealt with on behalf of or as directed by, another entity; and (b) fails to comply with that section; is liable to pay to the Commissioner a penalty equal to the amount that would have been required to be withheld under this Subdivision (disregarding section 12 ‑ 300) in relation to amounts attributable to the payment or amount if the notice had been given or the details had been made available. Note: Division 298 in this Schedule contains machinery provisions for administrative penalties.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-25 — Meaning of AMIT DIR payment

An AMIT DIR payment means any of the following: (a) an * AMIT dividend payment; (b) an * AMIT interest payment; (c) an * AMIT royalty payment.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-30 — Meaning of AMIT dividend payment

(1) This section applies to a trust that is an * AMIT for an income year. (2) The object of this section is to ensure that the total of the * AMIT dividend payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3). (3) The amount is the total of the * determined member components for the * AMIT for the income year of the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12 ‑ F. (4) A payment (the actual or deemed payment ) that the trustee of a trust makes in relation to an income year is an AMIT dividend payment in relation to that year. However, the amount of the AMIT dividend payment is worked out under the following method statement, and may be: (a) the amount of the actual or deemed payment; or (b) the amount of the actual or deemed payment, increased or reduced as a result of the method statement. Note: The payment by the trustee may be an actual payment, or a deemed payment under section 12A ‑ 205. Method statement Step 1. Work out what it is reasonable to expect will be the amount mentioned in subsection (3). Step 2. The AMIT dividend payment is so much of the step 1 amount as is reasonable having regard to: (a) the object of this section; and (b) the amounts of any earlier AMIT dividend payments made by the trustee in relation to the income year; and (c) the expected amounts of any later AMIT dividend payments the trustee expects to make in relation to the income year. (5) The amount mentioned in subsection (3) and the expected amounts of any later * AMIT dividend payments are to be worked out on the basis of the trustee’s knowledge when the payment is made. (6) Subsection (5) does not apply if the payment is a payment arising because of the operation of section 12A ‑ 205 (deemed payments). (7) However, the payment is not an AMIT dividend payment in relation to the income year if: (a) the payment is a * post ‑ AMMA actual payment in respect of another payment; and (b) the other payment arises because of the operation of section 12A ‑ 205; and (c) the other payment is an AMIT dividend payment.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-35 — Meaning of AMIT interest payment

(1) This section applies to a trust that is an * AMIT for an income year. (2) The object of this section is to ensure that the total of the * AMIT interest payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3). (3) The amount is the total of the * determined member components for the * AMIT for the income year of the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to a requirement to withhold under Subdivision 12 ‑ F. (4) To work out the amount of an AMIT interest payment , apply subsections 12A ‑ 30(4), (5), (6) and (7). For this purpose: (a) treat references in those subsections to AMIT dividend payments as instead being references to AMIT interest payments; and (b) treat the reference in subsection 12A ‑ 30(4) to “the amount mentioned in subsection (3)” as instead being a reference to “the amount mentioned in subsection 12A ‑ 35(3)”.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-40 — Meaning of AMIT royalty payment

(1) This section applies to a trust that is an * AMIT for an income year. (2) The object of this section is to ensure that the total of the * AMIT royalty payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3). (3) The amount is the total of the * determined member components for the * AMIT for the income year of the character of a * royalty that is subject to a requirement to withhold under Subdivision 12 ‑ F. (4) To work out the amount of an AMIT royalty payment , apply subsections 12A ‑ 30(4), (5), (6) and (7). For this purpose: (a) treat references in those subsections to AMIT dividend payments as instead being references to AMIT royalty payments; and (b) treat the reference in subsection 12A ‑ 30(4) to “the amount mentioned in subsection (3)” as instead being a reference to “the amount mentioned in subsection 12A ‑ 40(3)”.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-100 — What this Subdivision is about

Withholding liabilities under Subdivision 12 ‑ H do not apply in relation to deemed payments arising under Subdivision 12A ‑ C analogous to fund payments under Subdivision 12 ‑ H (although analogous liabilities may arise under Subdivision 12A ‑ C). AMIT trustees, custodians and other entities may be required to give notices etc. to recipients of such deemed payments. Table of sections Operative provisions 12A ‑ 105 Deemed payments—no obligation to withhold under Subdivision 12 ‑ H 12A ‑ 110 Meaning of fund payment —AMITs

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-105 — Deemed payments—no obligation to withhold under Subdivision 12 ‑ H

(1) The trustee mentioned in subsection 12 ‑ 385(1) need not withhold an amount under that subsection from the payment mentioned in that subsection if the payment arises because of the operation of section 12A ‑ 205 (deemed payments). Note: The trustee may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A ‑ C). (2) The * custodian mentioned in subsection 12 ‑ 390(1) need not withhold an amount under that subsection from the later payment mentioned in that subsection if: (a) the later payment arises because of the operation of section 12A ‑ 205 (deemed payments); or (b) the later payment is a * post ‑ AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a). Note: Either or both of the trustee of the AMIT concerned and the custodian may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A ‑ C). (3) The entity mentioned in subsection 12 ‑ 390(4) need not withhold an amount under that subsection from the payment mentioned in that subsection if: (a) the payment arises because of the operation of section 12A ‑ 205 (deemed payments); or (b) the payment is a * post ‑ AMMA actual payment in respect of a payment of a kind mentioned in paragraph (a). Note: The entity may have to pay the Commissioner an amount in respect of the deemed payment (see Subdivision 12A ‑ C). (4) Disregard this section for the purposes of section 12 ‑ 395.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-110 — Meaning of fund payment —AMITs

(1) This section applies to a trust that is an * AMIT for an income year. (2) The object of this section is to ensure that the total of the * fund payments that the trustee of the * AMIT makes in relation to the income year equals, as nearly as practicable, the amount mentioned in subsection (3). (3) The amount is the sum of the following amounts: (a) total of the * determined member components for the * AMIT for the income year of a character relating to assessable income, disregarding determined member components (the excluded components ) of any of the following characters: (i) the character of a * discount capital gain from a * CGT asset that is not * taxable Australian property; (ii) the character of a * capital gain (other than a discount capital gain) from a CGT asset that is not taxable Australian property; (iii) the character of a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to, or exempted from, a requirement to withhold under Subdivision 12 ‑ F; (iv) the character of interest (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to, or exempted from, a requirement to withhold under Subdivision 12 ‑ F; (v) the character of a * royalty that is subject to, or exempted from, a requirement to withhold under Subdivision 12 ‑ F; (vi) the character of * ordinary income, or * statutory income, from a source other than an * Australian source; (vii) if a legislative instrument under subsection (4) specifies a character—that character; (b) the total of each * capital loss of the AMIT from a * CGT event that: (i) happened in the income year to a CGT asset that is not taxable Australian property; and (ii) has been applied against a capital gain from a CGT event that happened in relation to a CGT asset that is taxable Australian property; but only to the extent that each such capital loss has been so applied in the income year; (c) the total of each amount to which subsection (3A) applies in relation to the income year. (3A) If: (a) the AMIT has a * net capital loss for an earlier income year; and (b) one or more of the * capital losses the trust made during that earlier income year were from * CGT events that happened in relation to * CGT assets that were not * taxable Australian property; and (c) in relation to the income year mentioned in paragraph (3)(c), some or all of the net capital loss is applied against a * capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property; this subsection applies, for the income year mentioned in paragraph (3)(c), to an amount equal to so much of the net capital loss that is so applied as related to capital losses mentioned in paragraph (b) of this subsection. (4) The Commissioner may, by legislative instrument, specify one or more characters for the purposes of subparagraph (3)(a)(vii). (5) A payment (the actual or deemed payment ) that the trustee of a trust makes in relation to an income year is a fund payment in relation to that year. However, the amount of the fund payment is worked out under the following method statement, and may be: (a) the amount of the actual or deemed payment; or (b) the amount of the actual or deemed payment, increased or reduced as a result of the method statement. Note: The payment by the trustee may be an actual payment, or a deemed payment under section 12A ‑ 205. Method statement Step 1. Reduce the actual or deemed payment by so much of it that is attributable to the excluded components. Step 2. Work out what it is reasonable to expect will be the amount mentioned in subsection (3). Do so on the basis that a * capital gain from * taxable Australian property of the trust that was or would be reduced under step 5 of the method statement in subsection 102 ‑ 5(1) of the Income Tax Assessment Act 1997 were double the amount it actually is. Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to: (a) the object of this section; and (b) the step 1 amount; and (c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and (d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year. (6) The amount mentioned in subsection (3) and the expected amounts of any later * fund payments are to be worked out on the basis of the trustee’s knowledge when the payment is made. (7) Subsection (6) does not apply if the payment is a payment arising because of the operation of section 12A ‑ 205 (deemed payments). (8) However, the payment is not a fund payment in relation to the income year if: (a) the payment (the actual payment ) is a * post ‑ AMMA actual payment in respect of another payment; and (b) the other payment arises because of the operation of section 12A ‑ 205; and (c) the other payment is a fund payment. (9) An amount is also not a fund payment in relation to the income year unless it is paid: (a) during the income year; or (b) within 3 months after the end of the income year; or (c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 years) allowed by the Commissioner. (10) The Commissioner may allow a longer period as mentioned in paragraph (9)(c) only if the Commissioner is of the opinion that: (a) if the other payment arises at a time because of the operation of section 12A ‑ 205 (deemed payments)—the * AMIT complied with subsection 276 ‑ 455(1) of the Income Tax Assessment Act 1997 in respect of the income year (requirement to give AMMA statements within 3 months); or (b) otherwise—the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3) | Amended by No 15 of 2019, effective sch 1 (items 19 ‑ 33, 46): 1 Apr 2019 (s 2(1) item 2) | Amended by No 49 of 2026, effective sch 1 (items 52, 53, 80, 81): 1 July 2026 (s 2(1) items 2, 4)

s 12A-200 — What this Subdivision is about

When a withholding MIT that is an AMIT gives a member an AMMA statement, the trustee is deemed to have made a payment to the member. The payment is generally the sum of the determined member components reflected in the statement that are of a character relating to assessable income, reduced by any previous actual payments related to those components. The deemed payment can flow through one or more custodians, giving rise to subsequent deemed payments. Table of sections Operative provisions 12A ‑ 205 Issue of AMMA statement etc. deemed to be payment 12A ‑ 210 Post ‑ AMMA actual payment and pre ‑ AMMA actual payment in respect of deemed payment 12A ‑ 215 AMIT payment to the Commissioner in respect of deemed payments to offshore entities etc. 12A ‑ 220 Custodian payment to the Commissioner in respect of deemed payments to offshore entities etc.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-205 — Issue of AMMA statement etc. deemed to be payment

(1) This section applies if: (a) an entity (the first recipient ) is or was a * member of a * withholding MIT in respect of an income year; and (b) the withholding MIT is an * AMIT for the income year; and (c) the AMIT gives the first recipient an * AMMA statement for the income year. (2) For the purposes of this Part, Subdivision 840 ‑ M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936 : (a) treat the trustee of the * AMIT as having made a payment (the first deemed payment ) of an amount to the first recipient at the time the AMIT gave the first recipient the * AMMA statement; and (b) treat the amount of the first deemed payment as being the amount worked out as follows: (i) first, work out the total of all the * determined member components of all the * members of the AMIT of a character relating to assessable income for the income year; (ii) next, identify each of the * pre ‑ AMMA actual payments (if any) made to those members in respect of all payments by the trustee to those members that arise from the operation of paragraph (a); (iii) next, identify every * AMIT DIR payment (if any) and each * fund payment (if any) that arises from each such pre ‑ AMMA actual payment; (iv) next, reduce the result of subparagraph (i) by the sum of each such AMIT DIR payment and fund payment; (v) next, work out how much of the result of subparagraph (iv) is referable to the first recipient. (3) Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936 , treat the first recipient as having derived the first deemed payment just before the end of the income year to which the * AMMA statement relates. (4) Subsection (5) applies if: (a) the first recipient is a * custodian; and (b) another entity (the subsequent recipient ): (i) starts to have, at a time, an entitlement to an amount that is reasonably attributable to all or part of the first deemed payment; or (ii) would start to have, at a time, such an entitlement if the first deemed payment were an actual payment of an amount. (5) For the purposes of this Part, Subdivision 840 ‑ M of the Income Tax Assessment Act 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936 : (a) treat the first recipient as having made a payment (the subsequent deemed payment ) of an amount to the subsequent recipient at that time; and (b) treat the amount of the subsequent deemed payment as being the amount of the entitlement mentioned in subparagraph (4)(b)(i) or (ii); and (c) treat the amount of the subsequent deemed payment as being attributable to the first deemed payment. (6) Also, for the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936 , treat the subsequent recipient as having derived the subsequent deemed payment at the time the subsequent deemed payment arises. (7) If: (a) an entity is a subsequent recipient mentioned in subsection (4) (including as a result of a previous operation of this subsection); and (b) subsection (5) applies with the result that a payment is treated as having been made to the entity; and (c) the entity is a * custodian; apply subsections (4), (5) and (6) again as if the entity were the first recipient mentioned in subsection (4). Note: This means that the entity is treated under subsection (5) as having made a payment to another entity if the other entity has (or would have) an entitlement as mentioned in paragraph (4)(b).

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)

s 12A-210 — Post ‑ AMMA actual payment and pre ‑ AMMA actual payment in respect of deemed payment

(1) A payment that does not arise because of the operation of section 12A ‑ 205 is a post ‑ AMMA actual payment in respect of a payment (the deemed payment ) that does arise because of the operation of that section if: (a) the payment and the deemed payment are both attributable to the same * member component for the * AMIT mentioned in that section; and (b) the actual payment is made at or after the time the deemed payment arises. (2) A payment that does not arise because of the operation of section 12A ‑ 205 is a pre ‑ AMMA actual payment in respect of a payment (the deemed payment ) that does arise because of the operation of that section if: (a) the payment and the deemed payment are both attributable to the same * member component for the * AMIT mentioned in that section; and (b) the actual payment is made before the time the deemed payment arises.

Amendment history: Inserted by No 53 of 2016, effective sch 1 (items 2 ‑ 4), sch 3 (items 5 ‑ 23), sch 4 (items 6 ‑ 9), sch 5 (items 73 ‑ 75), sch 6 (items 35 ‑ 68), sch 8 (item 1): 5 May 2016 (s 2(1) items 2, 4) sch 7 (items 1, 2): 1 July 2014 (s 2(1) item 3)