Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
14-5 Provider of non‑cash benefit must pay amount to the Commissioner if payment would be subject to withholding
An entity (the payer) must pay an amount to the Commissioner before providing a *non‑cash benefit to another entity (the recipient) if Division 12 would require the payer to withhold an amount (the notionally withheld amount) if, instead of providing the benefit to the recipient, the payer made a payment to the recipient in money equal to the *market value of the benefit when the benefit is provided.
The amount to be paid to the Commissioner is equal to the notionally withheld amount.
Nick is a building contractor who has entered into a voluntary agreement with Mike for the purposes of section 12‑55. Nick proposes to give Mike his old utility van (whose market value is $1,000) as payment for work Mike has done for him over a fortnight.
If Nick were instead to pay Mike $1,000, Nick would have had to withhold $203 under Division 12 (in accordance with withholding rates current at the time).
This section requires Nick to pay $203 to the Commissioner before giving the van to Mike.
This section does not apply to providing:
a *fringe benefit; or
a benefit that is an exempt benefit under the Fringe Benefits Tax Assessment Act 1986; or
a benefit that would be an exempt benefit under that Act if paragraphs (d) and (e) of the definition of employer in subsection 136(1) of that Act were omitted; or
a benefit constituted by the acquisition of an *ESS interest *under an employee share scheme to which Subdivision 83A‑B or 83A‑C of the Income Tax Assessment Act 1997 applies.
This Act’s bill:Second reading speech
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.