On 7.4.17, a Deputy Commissioner registered a legislative instrument: the PAYG Withholding variation for foreign resident capital gains withholding payments – income tax exempt entities to vary (under s14-235(5) of the TAA) the CGT, PAYG withholding obligations, down to nil, for vendors who are tax exempt. This is for an entity that provides the purchaser:
- evidence of a private binding ruling issued by the ATO confirming that it is an “income tax exempt entity” that is valid for the year in which the transaction is occurring; or
- documentation showing that the entity is endorsed for income tax exemption as a registered charity under s 50-5 of the ITAA 1997.
The Instrument varies to Nil the amount of PAYG withholding that would otherwise have to be paid to the Commissioner under s 14-200 of Sch 1 to the TAA, when certain acquisitions of taxable Australian property from income tax exempt entities occur. The instrument seeks to avoid the unnecessary withholding, where no income tax would be payable by the seller of the relevant property.
DATE OF EFFECT: 7 April 2017.
[Federal Register of Legislation: Legislative Instrument; LTN 6/4/17]