Issue: Correction to section 139C(1D) 35 Issue: Minor drafting issues 35 Provisional tax attribution 37 Issue: Support for the proposals 37 Issue: The proposal is overly complex and mechanical in nature 37 Issue: Clarification of elections 38 Issue: The provisional tax amount attributed to the company 39 Issue: Consequences of an insolvent liquidation 39 Issue: Tax pooling 40 Issue: Consideration of consequences of the shareholder-employee ceasing to receive a salary 40 Issue: Date of election 40 Company becoming a provisional taxpayer 41 Issue: Minor drafting issues 41 Allowing contractors to elect their own withholding rate 42 Issue: Support for proposed amendment 42 Issue: Non-declaration rate for schedular payments 42 Issue: Minimum rate 43 Issue: Repeatedly switching withholding rates 43 Issue: Safeguards for prescribed rate 44 Issue: Maximum prescribed rate 45 Issue: Published guidance on prescribed rate 45 Issue: Schedular notification 46 Issue: Services performed before 1 April 2017 46 Issue: Recognition of incorrect rates 47 Issue: Minor drafting issues 47 Extending withholding to labour-hire firm contractors 48 Issue: Support for proposed amendment 48 Issue: Wider review needed 48 Issue: Need for greater clarity 48 Issue: Alignment with attribution rule for personal services income 49 Issue: Exemption certificates 50 Clarifying special tax rates of 0% 51 Issue: Company exemption for labour-hire firm contractors 51 Issue: Exemption for certain professional services firms 52 Issue: Minor drafting issues 52 Voluntary withholding agreements 54 Issue: Support for the proposed amendment 54 Issue: Company exemption for voluntary withholding agreements 54 Issue: Requirement for valid agreement 55 Issue: Other payments 55 Issue: Placement of voluntary withholding provision 56 Late payment penalties 57 Issue: Support for the amendment 57 Issue: Instalment arrangements credited against core tax 57 Issue: Commissioner discretion to impose penalties and UOMI 58 Issue: Imposition of late payment penalties on other civil penalties 58 Issue: Minor drafting issue 59 Disclosing reportable unpaid tax to credit reporting agencies 61 Issue: Support for the amendment 61 Issue: May limit commercial lending by banks 61 Issue: Formal notification 62 Issue: Safeguards for disclosing taxpayer information 62 Issue: Remedies for error 63 Threshold for initial disclosure 64 Issue: Disclose where there is repeated non-compliance 65 Issue: Amending the threshold amount using an Order in Council 65
We agree that the subsection should be altered to include the word “the” as outlined in the submission. Recommendation That the submission be accepted. Issue: Minor drafting issues Submission (Matter raised by officials) A number of small drafting points have been identified in relation to the wording in the legislation that should be remedied. Comment We recommend that the following minor drafting matters be remedied: the definition of “initial provisional taxpayer” in the Income Tax Act should reflect the change in the safe harbour threshold from $50,000 to $60,000; clause 110 should include a reference to section RC3(3) in the proposed amendment to section to ensure that those who are put into provisional tax for the current year can continue to use the safe harbour provisions; clause 110 should include the words “on or before” to ensure those taxpayers who pay their provisional tax instalments early can still use the safe harbour; clause 110 should also repeal section 120KE(1)(e) to align the treatment of taxpayers who have certificates of exemption from resident withholding tax; and clause 109 should amend proposed section 120KBB(3) to ensure that taxpayers will not be paid credit UOMI on failed instalments. Recommendation That the submission be accepted. Clauses 72, 73, 77, 78, 79, 82, 92(8)-(10), 96, 102 and 111 Support for the proposals