Document ID: chunk:federal_register_of_legislation:C2004A00662:clause:1_28:p1
Version: federal_register_of_legislation:C2004A00662
Segment Type: clause
Provision Reference: sch 1 cl 28 (pt 1/3)
Character Range: 59746–62708

28  After Division 12 in Schedule 1
Insert:

Division 13—Alienated personal services payments

Table of sections

13‑1 Object of this Division
13‑5 Payment to the Commissioner in respect of alienated personal services payments
13‑10 Alienated personal services payments
13‑15 Personal services payment remitters
13‑20 Time for payments to Commissioner for alienated personal services payments made during 2000‑01

13‑1  Object of this Division

  The object of this Division is to ensure the efficient collection of income tax (and other liabilities) on any *personal services income included in an individual's assessable income under Division 86 of the Income Tax Assessment Act 1997 by:
 (a) putting *personal services entities receiving *alienated personal services payments in a position similar to their position if amounts were withheld from the payments under Division 12; but
 (b) doing so in a way that enables them to comply with their obligations without having to withhold amounts separately from each payment.

Note: Under Division 86 of the Income Tax Assessment Act 1997 (about alienation of personal services income), an individual's personal services income that is gained or produced by another entity is in some cases included in the individual's assessable income. Payments of this income by the entity might not be caught by Division 12.

13‑5  Payment to the Commissioner in respect of alienated personal services payments

Obligation to pay amounts

 (1) A *personal services entity must pay an amount of tax to the Commissioner if:
 (a) it receives an *alienated personal services payment that relates to an individual's personal services income; and
 (b) it receives the payment during a *PAYG payment period for which it is a *personal services payment remitter.

Working out the amounts

 (2) Use this method statement to work out the amount:

      Method statement
           Step 1. Identify the payments that the *personal services entity makes to the individual during the period mentioned in paragraph (1)(b) that are *withholding payments covered by section 12‑35.
           Step 2. Identify the amounts that:

                (a) are included in the individual's assessable income under section 86‑15 of the Income Tax Assessment Act 1997; and
                (b) relate to *alienated personal services payments the entity receives during that period.

           Step 3. Work out the sum of all the amounts that Division 12 would require the entity to withhold in respect of that period if both of these were taken into account:

                (a) the payments identified in step 1; and
                (b) the amounts identified in step 2, as if they were payments of salary covered by section 12‑35.

           Step 4. Work out the sum of all the amounts withheld under section 12‑35 from the payments identified in step 1.
           Step 5. Subtract the sum under step 4 from the sum under step 3.
Example: