Inserts for
Tax Laws Amendment (2012 Measures No. 2) Bill 2012: Companies’ non‑compliance with PAYG withholding and superannuation guarantee obligations

EXPOSURE DRAFT

Commencement information	
Column 1	Column 2	Column 3	
Provision(s)	Commencement	Date/Details	
3.  Schedule 3, Part 1	The day after this Act receives the Royal Assent.		
4.  Schedule 3, Part 2	The later of:
(a) the day after this Act receives the Royal Assent; and
(b) the day the Pay As You Go Withholding Non‑compliance Tax Act 2012 receives the Royal Assent.
However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur.		
5.  Schedule 3, Part 3, Division 1	The day after this Act receives the Royal Assent.		
6.  Schedule 3, Part 3, Division 2	Immediately after the commencement of the provision(s) covered by table item 3.		

Schedule 3—Companies’ non‑compliance with PAYG withholding and superannuation guarantee obligations
Part 1—Recovery of penalties
Division 1—Amendments applying to future and undischarged penalties
Taxation Administration Act 1953
1  At the end of section 8AAZL
Add:
	(4)	Furthermore, the Commissioner does not have to treat an amount using either of those methods if:
	(a)	doing so would require the Commissioner to apply the amount against a tax debt; and
	(b)	the tax debt is a penalty that is due and payable under section 269‑20 in Schedule 1 (penalties for directors of non‑complying companies).
2  Subsections 269‑35(1) to (4) in Schedule 1
Repeal the subsections, substitute:
Illness
	(1)	You are not liable to a penalty under this Division if, because of illness or for some other good reason, it would have been unreasonable to expect you to take part, and you did not take part, in the management of the company at any time when:
	(a)	you were a director of the company; and
	(b)	the directors were under the relevant obligations under subsection 269‑15(1).
All reasonable steps
	(2)	You are not liable to a penalty under this Division if:
	(a)	you took all reasonable steps to ensure that one of the following happened:
	(i)	the directors caused the company to comply with its obligation;
	(ii)	the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001;
	(iii)	the directors caused the company to begin to be wound up (within the meaning of that Act); or
	(b)	there were no reasonable steps you could have taken to ensure that any of those things happened.
	(3)	In determining what are reasonable steps for the purposes of subsection (2), have regard to:
	(a)	when, and for how long, you were a director and took part in the management of the company; and
	(b)	all other relevant circumstances.
When you can rely on this section
	(4)	For the purposes of:
	(a)	proceedings in a court to recover from you a penalty payable under this Division; or
	(b)	proceedings in a court against you in relation to a right referred to in paragraph 269‑45(2)(b) (directors jointly and severally liable as guarantors);
subsection (1) or (2) of this section does not apply unless you prove the matters mentioned in that subsection.
	(4A)	For the purpose of the Commissioner recovering from you a penalty payable under this Division (other than as mentioned in subsection (4)), subsection (1) or (2) does not apply unless:
	(a)	you provide information to the Commissioner during the period of 60 days starting on the day the Commissioner:
	(i)	in the case of the Commissioner recovering the penalty under section 260‑5 (Commissioner may collect amounts from third party)—gives you a notice under subsection 260‑5(6) in relation to the penalty; or
	(ii)	otherwise—notifies you in writing that he or she has recovered any of the penalty; and
	(b)	the Commissioner is satisfied of the matters mentioned in subsection (1) or (2) of this section on the basis of that information.
3  After section 269‑50 in Schedule 1
Insert:
269‑52  Copies of notices
	(1)	If:
	(a)	the Commissioner gives you a notice under section 269‑25 in accordance with section 269‑50; and
	(b)	you have given the address of a *registered tax agent to the Commissioner as your address for service for the purposes of any *taxation law;
the Commissioner may also give you a copy of the notice.
	(2)	The Commissioner may do so by leaving the copy at, or posting the copy to, the address of the *registered tax agent.
	(3)	To avoid doubt, this section does not affect:
	(a)	whether the Commissioner has given you the actual notice; or
	(b)	how the Commissioner may give you the actual notice.
4  Application of amendments
The amendments made by this Division apply to penalties that are:
	(a)	payable under Subdivision 269‑B in Schedule 1 to the Taxation Administration Act 1953 (including penalties in relation to which subitem 65(4) of Schedule 1 to the Tax Laws Amendment (Transfer of Provisions) Act 2010 applies); and
	(b)	due:
	(i)	at or after the commencement of this item; or
	(ii)	before the commencement of this item, to the extent the penalties are not paid, remitted or discharged before the commencement of this item.
Note:	Subitem 65(4) of Schedule 1 to the Tax Laws Amendment (Transfer of Provisions) Act 2010 applies in relation to penalties that were payable under Division 9 of former Part VI of the Income Tax Assessment Act 1936.
Division 2—Penalties for new directors
Taxation Administration Act 1953
5  Paragraph 269‑20(3)(b) in Schedule 1
Omit “14 days”, substitute “30 days”.
6  Subsection 269‑20(4) in Schedule 1
Omit “14th day”, substitute “30th day”.
7  Application of amendments
The amendments made by this Division apply to you, in relation to an obligation under section 269‑15 in Schedule 1 to the Taxation Administration Act 1953, if you:
	(a)	become a director of the relevant company; and
	(b)	begin to be under the obligation;
on or after the commencement of this item.
Division 3—Remission of penalties
Taxation Administration Act 1953
8  Section 269‑30 in Schedule 1
Repeal the section, substitute:
269‑30  Effect on penalty of directors’ obligation ending before end of notice period
	(1)	Subject to subsection (2), a penalty of yours under this Division is remitted if the directors of the company stop being under the relevant obligation under section 269‑15:
	(a)	before the Commissioner gives you notice of the penalty under section 269‑25; or
	(b)	within 21 days after the Commissioner gives you notice of the penalty under that section.
	(2)	The following table has effect:

When appointing administrator or winding up company does not affect penalty	
Item	Column 1
If the company’s obligation is to pay to the Commissioner, on or before the due day …	Column 2
and, because of paragraph 269‑15(2)(b) or (c) (an administrator is appointed or the company begins to be wound up), the directors stop being under the relevant obligation after the last day of the 3 months after …	Column 3
subsection (1) does not apply …	
1	an amount in accordance with Subdivision 16‑B (obligation to pay withheld amounts to the Commissioner),	the due day,	to the extent the company does not, on or before the last day mentioned in column 2, notify the Commissioner under section 16‑150 of the amount the company is obliged to pay.	
2	the amount of an estimate under Division 268 (estimates of PAYG withholding liabilities and superannuation guarantee charge),	the day by which the company was obliged to pay the underlying liability to which the estimate relates,	to any extent.	
Note:	An administrator of the company being appointed, or the company beginning to be wound up, after the last day mentioned in column 2 will, to the extent mentioned in column 3, have no effect on the penalty.
	(3)	If you become a director of the company during or after the 3 months mentioned in column 2, treat the reference in the column to the 3 months as being a reference to the 3 months after the day you become a director of the company.
9  Application of amendment
The amendment made by this Division applies, in relation to a penalty under Division 269 in Schedule 1 to the Taxation Administration Act 1953, if the directors of the relevant company stop being under the relevant obligation under section 269‑15 in that Schedule on or after the commencement of this item.

Part 2—Credits
Income Tax Assessment Act 1997
10  Subsection 86‑40(2) (note 2)
Omit “and PAYG credits (see Subdivisions 16‑C and 18‑A”, substitute “, PAYG credits and PAYG withholding non‑compliance tax (see Subdivisions 16‑C, 18‑A and 18‑D”.
11  Subsection 995‑1(1)
Insert:
PAYG withholding non‑compliance tax means the Pay as you go withholding non‑compliance tax imposed under the Pay As You Go Withholding Non‑compliance Tax Act 2012.
Taxation Administration Act 1953
12  Subsection 8AAB(4) (after table item 38)
Insert:
38A	18‑150 in Schedule 1	Taxation Administration Act 1953	PAYG withholding non‑compliance tax	
13  At the end of section 18‑5 in Schedule 1
Add:
Note:	See also Subdivision 18‑D (PAYG withholding non‑compliance tax, which can reverse the economic benefit of a credit of a director, or an associate of a director, of a company that does not comply with its obligations under subsection 16‑70(1)).
14  At the end of Division 18 in Schedule 1
Add:
Subdivision 18‑D—Directors etc. of non‑complying companies
Table of sections
Object of Subdivision
18‑120	Object of Subdivision
PAYG withholding non‑compliance tax
18‑125	Directors of non‑complying companies
18‑130	Directors of non‑complying companies—tax reduced in certain circumstances
18‑135	Associates of directors of non‑complying companies
18‑140	Notices
18‑145	When PAYG withholding non‑compliance tax must be paid
18‑150	General interest charge payable on unpaid PAYG withholding non‑compliance tax
18‑155	Validity of decisions and evidence
18‑160	Rights of indemnity and contribution
Credits for later compliance
18‑165	Credits for later compliance—scope
18‑170	Credits for later compliance—Commissioner must give notice in certain circumstances
18‑175	Credits for later compliance—Commissioner may give notice
18‑180	Effect of earlier credits
Other provisions
18‑185	When Commissioner may give notice
18‑190	Review of decisions
Object of Subdivision
18‑120  Object of Subdivision
		The object of this Subdivision is to reverse the economic benefit of a credit under section 18‑15 (Tax credit for recipient of withholding payment) of a director, or an *associate of a director, of a company if:
	(a)	the company does not comply with its obligations under subsection 16‑70(1) (obligation to pay amounts withheld to the Commissioner); and
	(b)	the credit is attributable to *amounts withheld from *withholding payments made by the company to the director or associate;
until the company complies with its obligations.
PAYG withholding non‑compliance tax
18‑125  Directors of non‑complying companies
Liability to pay PAYG withholding non‑compliance tax
	(1)	An individual must pay *PAYG withholding non‑compliance tax in relation to a company for an income year of the individual if:
	(a)	the individual is or has been a director (within the meaning of the Corporations Act 2001) of the company; and
	(b)	the company was required to pay to the Commissioner under subsection 16‑70(1) in this Schedule amounts:
	(i)	the company withheld from *withholding payments the company made to any entities during the income year of the individual; and
	(ii)	to which subsection (2) applies; and
	(c)	the company did not pay the total of those amounts to the Commissioner on or before the last day (the non‑compliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16‑70(1); and
	(d)	a credit to which the individual is entitled under section 18‑15 is attributable to an extent to *amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.
Note:	For the purposes of paragraph (1)(d), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 16‑70(1).
	(2)	This subsection applies to *amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day) under subsection 16‑70(1), if:
	(a)	both of the following subparagraphs apply:
	(i)	the individual was a director (within the meaning of the Corporations Act 2001) of the company on the payment day;
	(ii)	the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16‑70(1) on or before the payment day; or
	(b)	all of the following subparagraphs apply:
	(i)	the individual became a director of the company after the payment day;
	(ii)	the individual was still a director of the company 30 days after becoming a director;
	(iii)	the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16‑70(1) on or before the last of those 30 days.
Amount of tax
	(3)	The amount of the *PAYG withholding non‑compliance tax the individual must pay is the lesser of:
 	(a)	the extent of the credit mentioned in paragraph (1)(d); and
	(b)	the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).
18‑130  Directors of non‑complying companies—tax reduced in certain circumstances
	(1)	The amount of the *PAYG withholding non‑compliance tax the individual must pay as mentioned in section 18‑125 is reduced if the Commissioner gives a notice to the individual under this section.
Notice
	(2)	The Commissioner must give a written notice to the individual on a day (the reduction notice day) (whether before, on or after the day (if any) the Commissioner gives the individual the relevant notice under section 18‑140), if the Commissioner is satisfied that:
	(a)	because of illness or for some other good reason, it would have been unreasonable to expect the individual to take part, and the individual did not take part, in the management of the company at any time during the period:
	(i)	starting on a day on or by which the company was required to pay any of the total mentioned in paragraph 18‑125(1)(c) to the Commissioner under subsection 16‑70(1); and
	(ii)	ending on the reduction notice day; or
	(b)	the individual took all reasonable steps to ensure that one of the following happened:
	(i)	the directors (within the meaning of the Corporations Act 2001) of the company caused the company to pay the total of the amounts mentioned in paragraph 18‑125(1)(c) to the Commissioner;
	(ii)	the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001;
	(iii)	the directors caused the company to begin to be wound up (within the meaning of that Act);
		or there were no reasonable steps the individual could have taken to ensure that any of those things happened.
	(3)	In determining what are reasonable steps for the purposes of paragraph (2)(b), the Commissioner must have regard to:
	(a)	when, and for how long, the individual was a director and took part in the management of the company; and
	(b)	all other relevant circumstances.
Amount of reduction
	(4)	The amount of the reduction is the amount stated in the notice.
	(5)	In determining the amount to state in the notice, the Commissioner must have regard to:
	(a)	in a case to which paragraph (2)(a) applies—when, and for how long, the individual could not have been expected to take part, and did not take part, in the management of the company; and
	(b)	in a case to which paragraph (2)(b) applies—when, and for how long, the individual was a director and took part in the management of the company; and
	(c)	in either case—what is fair and reasonable in the circumstances.
Effect of reduction
	(6)	The amount of the *PAYG withholding non‑compliance tax the individual must pay is treated as always having been that amount as reduced under this section.
18‑135  Associates of directors of non‑complying companies
Liability to pay PAYG withholding non‑compliance tax
	(1)	An individual must pay *PAYG withholding non‑compliance tax in relation to a company for an income year of the individual if:
	(a)	at a time when another individual (the director) was a director (within the meaning of the Corporations Act 2001) of the company, the first individual was an *associate of the director; and
	(b)	the company was required to pay to the Commissioner under subsection 16‑70(1) in this Schedule amounts:
	(i)	the company withheld from *withholding payments the company made to any entities during the income year of the individual; and
	(ii)	to which subsection (2) of this section applies; and
	(c)	the company did not pay the total of those amounts to the Commissioner on or before the last day (the non‑compliance day) on or before which the company was required to pay any of those amounts to the Commissioner in accordance with subsection 16‑70(1); and
	(d)	subsection (3) or (6) of this section applies; and
	(e)	a credit to which the individual is entitled under section 18‑15 is attributable to an extent to *amounts withheld by the company under Division 12 from withholding payments made to the individual during the income year of the individual.
Note:	For the purposes of paragraph (1)(e), it does not matter whether the company pays the amounts withheld from the withholding payments made to the individual to the Commissioner under subsection 16‑70(1).
	(2)	This subsection applies to *amounts withheld that the company was required to pay to the Commissioner on or before a particular day (the payment day) under subsection 16‑70(1), if:
	(a)	all of the following subparagraphs apply:
	(i)	the director was a director (within the meaning of the Corporations Act 2001) of the company on the payment day;
	(ii)	the individual was an *associate of the director on the payment day;
	(iii)	the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16‑70(1) on or before the payment day; or
	(b)	all of the following subparagraphs apply:
	(i)	the director became a director of the company after the payment day;
	(ii)	the director was still a director of the company 30 days after becoming a director;
	(iii)	the individual was an *associate of the director throughout that 30 day period;
	(iv)	the company did not pay the total of those amounts to the Commissioner in accordance with subsection 16‑70(1) on or before the last of those 30 days.
	(3)	This subsection applies if the Commissioner is satisfied that:
	(a)	because of:
	(i)	the individual’s relationship with the director; or
	(ii)	a relationship of the individual with the company;
		the individual knew, or could reasonably have been expected to know, of the company’s failure to pay the total of the amounts mentioned in paragraph (1)(c) to the Commissioner; and
	(b)	none of the following subparagraphs applies:
	(i)	the individual took all reasonable steps to influence the director to cause the company to notify the Commissioner under Subdivision 18‑C of the relevant *amounts withheld;
	(ii)	the individual took all reasonable steps to influence the director to cause one of the events mentioned in subsection (4) to happen, or there were no reasonable steps the individual could have taken to influence the director to cause any of those events to happen;
	(iii)	the individual reported the company’s non‑payment to the Commissioner or to another authority with responsibilities relevant to the operation of the company.
Example:	Other authorities with responsibilities relevant to the operation of the company could include the Minister, the police, the Australian Securities and Investments Commission or the Building and Construction Industry Commissioner.
	(4)	The following are the events:
	(a)	the company pays the total of the amounts mentioned in paragraph (1)(c) to the Commissioner;
	(b)	an administrator of the company is appointed under section 436A, 436B or 436C of the Corporations Act 2001;
	(c)	the company begins to be wound up (within the meaning of that Act).
	(5)	In determining what are reasonable steps for the purposes of paragraph (3)(b), have regard to:
	(a)	when, and for how long, the individual was an *associate of the director; and
	(b)	when, and for how long, the director was a director and took part in the management of the company; and
	(c)	all other relevant circumstances.
	(6)	This subsection applies if:
	(a)	the individual was an employee of the company; and
	(b)	the Commissioner is satisfied that the company treated the individual more favourably than it treated other employees of the company.
Amount of tax
	(7)	The amount of the *PAYG withholding non‑compliance tax the individual must pay is the lesser of:
 	(a)	the extent of the credit mentioned in paragraph (1)(e); and
	(b)	the total amount the company did not pay to the Commissioner as mentioned in paragraph (1)(c).
18‑140  Notices
Notices
	(1)	The Commissioner must not commence proceedings to recover:
	(a)	the *PAYG withholding non‑compliance tax an individual must pay for an income year in relation to a company as mentioned in section 18‑125 or 18‑135; or
	(b)	any related *general interest charge payable under section 18‑150;
unless, after the non‑compliance day mentioned in section 18‑125 or 18‑135, the Commissioner gives a written notice to the individual under this section.
	(2)	The Commissioner may only give the notice if the Commissioner is satisfied, on the basis of information available to the Commissioner, that it is fair and reasonable for the individual to pay *PAYG withholding non‑compliance tax in relation to the company for the income year.
	(3)	The Commissioner must not give the notice on a day if, on that day:
	(a)	the individual; or
	(b)	in a case to which section 18‑135 applies—the director mentioned in that section;
is liable to pay to the Commissioner a penalty under Division 269 because the company has not complied with the obligation mentioned in item 1 of the table in subsection 269‑10(1) to pay to the Commissioner an *amount withheld to which paragraph 18‑125(1)(b) or 18‑135(1)(b) applies.
	(4)	The notice must specify:
	(a)	the company; and
	(b)	the income year; and
	(c)	the amount of the *PAYG withholding non‑compliance tax the individual must pay.
Effect of compliance between non‑compliance day and notice day
	(5)	Subsections (6) and (7) apply if:
	(a)	the company’s liability to pay the total of the amounts mentioned in paragraph 18‑125(1)(c) or 18‑135(1)(c) to the Commissioner is discharged to any extent during the period:
	(i)	starting on the day after the non‑compliance day; and
	(ii)	ending on the day before the day the Commissioner gives the notice under this section to the individual; and
	(b)	had all discharges of the company’s liability occurring during that period occurred before the non‑compliance day:
	(i)	the individual would not have been required to pay the *PAYG withholding non‑compliance tax in relation to the company for the income year; or
	(ii)	the amount of PAYG withholding non‑compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non‑compliance tax.
	(6)	The amount of the *PAYG withholding non‑compliance tax the individual must pay is reduced:
	(a)	in a case to which subparagraph (5)(b)(i) applies—to nil; or
	(b)	otherwise—to the amount of PAYG withholding non‑compliance tax the individual would have been required to pay as mentioned in subparagraph (5)(b)(ii).
	(7)	The amount of the *PAYG withholding non‑compliance tax the individual must pay is treated as always having been that amount as reduced under subsection (6).
18‑145  When PAYG withholding non‑compliance tax must be paid
	(1)	The *PAYG withholding non‑compliance tax an individual must pay for an income year is due and payable at the earliest time any of the income tax the individual must pay for the *financial year to which the income year relates is due and payable.
Note:	Division 5 of the Income Tax Assessment Act 1997 explains how to work out when to pay your income tax.
	(2)	For the purposes of subsection (1), if the individual is not required to pay income tax for the *financial year:
	(a)	treat the individual as being required to pay income tax for the financial year; and
	(b)	if the Commissioner has made an assessment that the income tax the individual is required to pay is nil—treat that assessment as being for an amount greater than nil.
Note:	See Part 4‑15 in this Schedule for collection and recovery provisions.
18‑150  General interest charge payable on unpaid PAYG withholding non‑compliance tax
		If an amount of *PAYG withholding non‑compliance tax that an individual must pay to the Commissioner remains unpaid after the time by which it is due to be paid, the individual is liable to pay *general interest charge on the unpaid amount of tax for each day in the period that:
	(a)	started at the beginning of the day by which the unpaid amount of tax was due to be paid; and
	(b)	finishes at the end of the last day, at the end of which, any of the following remains unpaid:
	(i)	the unpaid amount of tax;
	(ii)	general interest charge on any of the unpaid amount of tax.
18‑155  Validity of decisions and evidence
	(1)	Section 175 of the Income Tax Assessment Act 1936 (validity) applies to a decision of the Commissioner under section 18‑140 in this Schedule in the same way as it applies to an assessment.
	(2)	Section 177 of the Income Tax Assessment Act 1936 (Evidence) applies to a notice under section 18‑140 in this Schedule in the same way as it applies to a notice of assessment.
18‑160  Rights of indemnity and contribution
	(1)	This section applies if an individual must pay *PAYG withholding non‑compliance tax as mentioned in section 18‑125 or 18‑135 because a company did not pay an amount to the Commissioner as mentioned in paragraph 18‑125(1)(c) or 18‑135(1)(c).
	(2)	The individual has the same rights (whether by way of indemnity, subrogation, contribution or otherwise) against the company or anyone else as if:
	(a)	the individual had made a payment equal to the amount of the *PAYG withholding non‑compliance tax under a guarantee of the liability of the company to pay the amount to the Commissioner; and
	(b)	under the guarantee:
	(i)	the individual; and
	(ii)	every individual to whom subsection (3) applies;
		were jointly and severally liable as guarantors (but only, in the case of an individual to whom subparagraph (ii) of this paragraph applies, to the extent to which subsection (3) applies to the individual); and
	(c)	any credit to which the individual mentioned in subsection (1) is entitled under section 18‑170 or 18‑175 in relation to the amount of PAYG withholding non‑compliance tax were a repayment of the payment mentioned in paragraph (a) of this subsection.
	(3)	This subsection applies to an individual to the extent that:
	(a)	the individual was a director (within the meaning of the Corporations Act 2001) of the company on the day (the payment day) on or by which the company was required to pay the amount mentioned in subsection (1) to the Commissioner; or
	(b)	both of the following subparagraphs apply:
	(i)	the individual became a director of the company after the payment day;
	(ii)	the individual was still a director of the company 30 days after becoming a director.
	(4)	However, subsection (3) does not apply to an individual to the extent that the amount of the *PAYG withholding non‑compliance tax the individual must pay in relation to the company for the income year as mentioned in section 18‑125 is reduced under section 18‑130.
Credits for later compliance
18‑165  Credits for later compliance—scope
		Sections 18‑170, 18‑175 and 18‑180 apply if:
	(a)	an individual must pay *PAYG withholding non‑compliance tax in relation to a company for an income year because the company did not pay to the Commissioner the total of the amounts mentioned in paragraph 18‑125(1)(c) or 18‑135(1)(c); and
	(b)	the Commissioner gives to the individual a notice under section 18‑140 on a particular day (the tax notice day) in relation to the PAYG withholding non‑compliance tax the individual must pay; and
	(c)	on or after the tax notice day, the company’s liability to pay the total of the amounts to the Commissioner is discharged to any extent.
18‑170  Credits for later compliance—Commissioner must give notice in certain circumstances
Commissioner must give notice to director or associate in certain circumstances
	(1)	The Commissioner must give a written notice to the individual on a particular day (the credit notice day) if, had the discharge mentioned in paragraph 18‑165(c) (and all previous discharges of the company’s liability mentioned in that paragraph) occurred before the tax notice day:
	(a)	the individual would not have been required to pay the *PAYG withholding non‑compliance tax in relation to the company for the income year; or
	(b)	the amount of PAYG withholding non‑compliance tax the individual would have been required to pay would have been less than the actual amount of PAYG withholding non‑compliance tax.
Note 1:	Subsection 18‑180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.
Note 2:	The amount of PAYG withholding non‑compliance tax may be limited by:
(a)	the conditions in subsections 18‑125(1) and (2) or 18‑135(1) to (6); or
(b)	the limits on the amount of the tax in subsection 18‑125(3) or 18‑135(7).
Note 3:	In working out the actual amount of the tax for the purposes of paragraph (1)(b), have regard to other credits to which the individual is entitled under this section or section 18‑175. See subsection 18‑180(1).
Director or associate entitled to credit if Commissioner gives notice
	(2)	The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).
	(3)	The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.
Amount of credit
	(4)	The amount of the credit is the amount stated in the notice.
	(5)	In a case to which paragraph (1)(a) applies, the amount stated must be the amount of the *PAYG withholding non‑compliance tax.
	(6)	In any other case, the amount stated:
	(a)	must not exceed the amount of the *PAYG withholding non‑compliance tax; and
	(b)	must not exceed the amount of the discharge mentioned in paragraph 18‑165(c); and
	(c)	must not be less than the amount by which:
	(i)	the amount of the PAYG withholding non‑compliance tax; exceeds
	(ii)	the amount that would have been the amount of the PAYG withholding non‑compliance tax had the discharge mentioned in paragraph 18‑165(c) (and all previous discharges of the company’s liability mentioned in that paragraph) occurred before the tax notice day.
	(7)	In determining the amount to state in the notice in a case to which paragraph (1)(a) does not apply, the Commissioner must have regard to what is fair and reasonable in the circumstances.
18‑175  Credits for later compliance—Commissioner may give notice
Commissioner may give notice to director or associate
	(1)	The Commissioner may give a written notice to the individual on a particular day (the credit notice day).
Note:	Subsection 18‑180(2) provides that the Commissioner must not give a notice to the individual in certain circumstances.
Director or associate entitled to credit if Commissioner gives notice
	(2)	The individual is entitled to a credit if the Commissioner gives a written notice to the individual under subsection (1).
	(3)	The individual becomes entitled to the credit on the day the Commissioner gives the notice to the individual.
Amount of credit
	(4)	The amount of the credit is the amount stated in the notice.
	(5)	The amount stated:
	(a)	must not exceed the amount of the *PAYG withholding non‑compliance tax; and
Note:	In working out the amount of the tax for the purposes of paragraph (5)(a), have regard to other credits to which the individual is entitled under section 18‑170 or this section. See subsection 18‑180(1).
	(b)	must not exceed the amount of the discharge mentioned in paragraph 18‑165(c).
Commissioner’s discretion
	(6)	In determining:
	(a)	whether to give a notice under this section; or
	(b)	the amount to state in the notice;
the Commissioner must have regard to what is fair and reasonable in the circumstances.
18‑180  Effect of earlier credits
	(1)	A reference in section 18‑170 or 18‑175, or subsection (2) of this section, to the amount of the *PAYG withholding non‑compliance tax is treated as being a reference to:
	(a)	the amount of the PAYG withholding non‑compliance tax; less
Note:	The amount of the PAYG withholding non‑compliance tax may, in a case to which section 18‑125 applies, be affected by reductions under section 18‑130.
	(b)	the total of any credits to which the individual is entitled in relation to the amount of PAYG withholding non‑compliance tax because of notices given to the individual under section 18‑170 or 18‑175 before the credit notice day.
	(2)	The Commissioner must not give a written notice to the individual under section 18‑170 or 18‑175 if, on the day before the credit notice day, the amount of the *PAYG withholding non‑compliance tax is nil.
Other provisions
18‑185  When Commissioner may give notice
		The Commissioner may give a notice to the individual on a day (the notice day) under section 18‑130, 18‑140, 18‑170 or 18‑175 if:
	(a)	on the notice day, the Commissioner has not given a notice of assessment to the individual for the income year mentioned in section 18‑125 or 18‑135; or
	(b)	if the notice would:
	(i)	in the case of a notice under section 18‑130—result in the individual being liable to pay *PAYG withholding non‑compliance tax or an increased amount of PAYG withholding non‑compliance tax; or
	(ii)	in the case of a notice under section 18‑140—result in the Commissioner being able to commence proceedings to recover PAYG withholding non‑compliance tax, or an increased amount of PAYG withholding non‑compliance tax, from the individual; or
	(iii)	in the case of a notice under section 18‑170 or 18‑175—reduce the amount of a credit or disentitle the individual to a credit;
		the Commissioner gives the notice no later than 2 years after first giving a notice of assessment to the individual for the income year mentioned in section 18‑125 or 18‑135; or
	(c)	if the notice would:
	(i)	in the case of a notice under section 18‑130—result in the individual being liable to pay no PAYG withholding non‑compliance tax, or a reduced amount of PAYG withholding non‑compliance tax; or
	(ii)	in the case of a notice under section 18‑140—result in the Commissioner no longer being able to commence proceedings to recover PAYG withholding non‑compliance tax, or result in the Commissioner being able to commence proceedings to recover a reduced amount of PAYG withholding non‑compliance tax, from the individual; or
	(iii)	in the case of a notice under section 18‑170 or 18‑175—increase the amount of a credit or entitle the individual to a credit;
		the Commissioner gives the notice no later than 4 years after first giving a notice of assessment to the individual for the income year mentioned in section 18‑125 or 18‑135; or
	(d)	in any case—the Commissioner gives the notice:
	(i)	to give effect to a decision on a review or appeal; or
	(ii)	as a result of an objection made by the individual or pending a review or appeal.
18‑190  Review of decisions
		An individual to whom the Commissioner gives a notice under section 18‑140 in relation to an amount of *PAYG withholding non‑compliance tax may object, under Part IVC of this Act, against a decision of the Commissioner under section 18‑130, 18‑140, 18‑170 or 18‑175 in relation to the PAYG withholding non‑compliance tax if the individual is dissatisfied with the decision.
15  Subsection 250‑10(2) in Schedule 1 (after table item 105)
Insert:
110	PAYG withholding non‑compliance tax	18‑145 in Schedule 1	Taxation Administration Act 1953	
Taxation (Interest on Overpayments and Early Payments) Act 1983
16  Subsection 3(1) (after paragraph (caa) of the definition of decision to which this Act applies)
Insert:
	(cab)	in a case where the expression is used in relation to relevant tax of a kind referred to in item 91 of the table in section 3C (Pay as you go withholding non‑compliance tax)—a decision of the Commissioner under section 18‑130 in Schedule 1 to the Taxation Administration Act 1953; or
Note:	Section 18‑130 in Schedule 1 to the Taxation Administration Act 1953 requires the Commissioner to give a notice to a director of a company if the Commissioner is satisfied of certain matters.
17  Subsection 3(1) (note at the end of the definition of income tax crediting amount)
Omit “Note”, substitute “Note 1”.
18  Subsection 3(1) (at the end of the definition of income tax crediting amount)
Add:
Note 2:	For credits that arise under section 18‑170 or 18‑175 in Schedule 1 to the Taxation Administration Act 1953, see subsection (3) of this section.
19  At the end of section 3
Add:
Credits under section 18‑170 or 18‑175 in Schedule 1 to the Taxation Administration Act 1953
	(3)	To avoid doubt, for the purposes of this Act, a credit of an individual that arises under section 18‑170 or 18‑175 in Schedule 1 to the Taxation Administration Act 1953 relates to the income tax payable by the individual for the year of income in which the individual becomes entitled to the credit.
Note:	Subdivision 18‑D in Schedule 1 to the Taxation Administration Act 1953 provides that a director, or an associate of a director, of a company that does not comply with its obligations under Part 2‑5 (Pay as you go (PAYG) withholding) must pay Pay as you go withholding non‑compliance tax in certain circumstances. Sections 18‑170 and 18‑175 entitle the director or associate to a credit if the company subsequently complies with its obligations.
20  Section 3C (after table item 90 of the definition of relevant tax)
Insert:
91	Pay as you go withholding non‑compliance tax	
21  Section 10
Before “Interest payable”, insert “(1)”.
22  At the end of section 10
Add:
	(2)	For the purposes of subparagraph (1)(a)(i), if the decision to which this Act relates is a decision of the Commissioner under section 18‑130 in Schedule 1 to the Taxation Administration Act 1953 in relation to an amount of Pay as you go withholding non‑compliance tax, the notice of the decision in relation to which that decision was made is the notice the Commissioner gives to the person under section 18‑140 in that Schedule in relation to that amount of tax.
23  Application of amendments
The amendments made by this Part apply to an individual in relation to amounts withheld by a company, if:
	(a)	the amounts are withheld during an income year of the individual starting on or after 1 July 2011; and
	(b)	the company is required to pay the amounts withheld to the Commissioner on or after the commencement of this item.

Part 3—Superannuation guarantee charge
Division 1—Estimates
Corporations Act 2001
24  Paragraph 553AB(1)(a)
After “superannuation guarantee charge”, insert “, or by way of a liability to pay the amount of an estimate under Division 268 in Schedule 1 to the Taxation Administration Act 1953”.
25  Paragraph 553AB(1)(b)
After “superannuation guarantee charge”, insert “or estimate liability”.
26  Paragraph 553AB(3)(a)
After “superannuation guarantee charge”, insert “, or by way of a liability to pay the amount of an estimate under Division 268 in Schedule 1 to the Taxation Administration Act 1953”.
27  Paragraph 553AB(3)(b)
After “superannuation guarantee charge”, insert “or estimate liability”.
28  Paragraph 556(1)(e)
Repeal the paragraph, substitute:
	(e)	subject to subsection (1A)—next:
	(i)	wages, superannuation contributions and superannuation guarantee charge payable by the company in respect of services rendered to the company by employees before the relevant date; or
	(ii)	liabilities to pay the amounts of estimates under Division 268 in Schedule 1 to the Taxation Administration Act 1953 of superannuation guarantee charge mentioned in subparagraph (i);
29  Before subsection 556(1A)
Insert:
Superannuation guarantee charge
30  After subsection 556(1AF)
Insert:
	(1AG)	Subsections (1AC) to (1AF) apply to a liability to pay the amount of an estimate of superannuation guarantee charge for a quarter in the same way as they apply to superannuation guarantee charge payable for the quarter.
31  Before subsection 556(1B)
Insert:
Leave amounts
32  Before subsection 556(1C)
Insert:
Retrenchment payments
33  Before subsection 556(2)
Insert:
Definitions
34  Subsection 588FGA(1)
Repeal the subsection, substitute:
	(1)	This section applies if the Court makes an order under section 588FF against the Commissioner of Taxation because of the payment of an amount in respect of a liability:
	(a)	under any of the following provisions:
	(i)	former section 220AAE, 220AAM or 220AAR of the Income Tax Assessment Act 1936;
	(ii)	former section 221F (except subsection 221F(12)), former section 221G (except subsection 221G(4A)) or former section 221P of the Income Tax Assessment Act 1936;
	(iii)	former subsection 221YHDC(2) of the Income Tax Assessment Act 1936;
	(iv)	former subsection 221YHZD(1) or (1A) of the Income Tax Assessment Act 1936;
	(v)	former subsection 221YN(1) of the Income Tax Assessment Act 1936;
	(vi)	section 222AHA of the Income Tax Assessment Act 1936;
	(vii)	Subdivision 16‑B in Schedule 1 to the Taxation Administration Act 1953; or
	(b)	to pay the amount of an estimate of unpaid superannuation guarantee charge under Division 268 in Schedule 1 to the Taxation Administration Act 1953.
Superannuation Guarantee (Administration) Act 1992
35  At the end of section 63A
Add:
Estimates under the Taxation Administration Act 1953
	(3)	For the purposes of this Part, an amount paid to the Commonwealth is treated as being a payment of superannuation guarantee charge:
	(a)	in respect of an employee or employees; and
	(b)	made by or on behalf of an employer;
to the extent that, as a result of the amount being paid to the Commonwealth, a liability of the employer to pay superannuation guarantee charge in respect of that employee or those employees is discharged under subsection 268‑20(3) in Schedule 1 to the Taxation Administration Act 1953.
Note:	Under Division 268 in that Schedule, the Commissioner may make an estimate of the unpaid and overdue amount of an employer’s superannuation guarantee charge for a quarter.
	(4)	However, subsection (3) does not apply to the amount until the Commissioner knows which employee or employees the liability to pay the superannuation guarantee charge was in respect of.
Taxation Administration Act 1953
36  Division 268 in Schedule 1 (heading)
Repeal the heading, substitute:
Division 268—Estimates and recovery of PAYG withholding liabilities and superannuation guarantee charge
37  Section 268‑1 in Schedule 1
Omit:
This Division enables the Commissioner to make an estimate of amounts not paid as required by Part 2‑5 (Pay as you go (PAYG) withholding), and to recover the amount of the estimate.
substitute:
This Division enables the Commissioner to make an estimate of:
	(a)	amounts not paid as required by Part 2‑5 of this Act (Pay as you go (PAYG) withholding); or
	(b)	unpaid superannuation guarantee charge;
and to recover the amount of the estimate.
38  Section 268‑1 in Schedule 1
After “amounts required by Part 2‑5”, insert “or the Superannuation Guarantee (Administration) Act 1992”.
39  Section 268‑1 in Schedule 1
After “that Part”, insert “or Act”.
40  Section 268‑5 in Schedule 1
Repeal the section, substitute:
268‑5  Object of Division
		The object of this Division is to enable the Commissioner to take prompt and effective action to recover:
	(a)	amounts not paid as required by Part 2‑5 (Pay as you go (PAYG) withholding); or
	(b)	unpaid superannuation guarantee charge that has not been assessed.
41  Subsection 268‑10(1) in Schedule 1
Repeal the subsection, substitute:
Estimate
	(1)	The Commissioner may estimate the unpaid and overdue amount of a liability (the underlying liability) of yours:
	(a)	under section 16‑70 in this Schedule (requirement to pay to the Commissioner amounts you have withheld under the Pay as you go withholding rules); or
	(b)	to pay superannuation guarantee charge for a *quarter under section 16 of the Superannuation Guarantee (Administration) Act 1992, to the extent the superannuation guarantee charge has not been assessed before the Commissioner makes the estimate.
	(1A)	For the purposes of this Division, your superannuation guarantee charge for a *quarter is treated as being payable on the day by which you must lodge a superannuation guarantee statement for the quarter under section 33 of the Superannuation Guarantee (Administration) Act 1992, even if, on that day, the charge has not been assessed under that Act.
42  Subsection 268‑10(3) in Schedule 1 (example)
Repeal the example, substitute:
Example 1:	In the case of an underlying liability under section 16‑70 (requirement to pay to the Commissioner amounts you have withheld under the Pay as you go withholding rules), the Commissioner may have regard to information about amounts you withheld under the Pay as you go rules before the period in relation to which the underlying liability arose.
Example 2:	In the case of an underlying liability to pay superannuation guarantee charge for a quarter, the Commissioner may have regard to information about your contributions to RSAs and complying superannuation funds for earlier quarters.
43  Subsection 268‑75(1) in Schedule 1
Repeal the subsection, substitute:
	(1)	This section applies if:
	(a)	your liability to pay the amount of the estimate remains undischarged at the end of 7 days after the Commissioner gives you notice of the estimate; and
	(b)	the underlying liability is not a liability to pay superannuation guarantee charge.
44  Subsection 268‑90(2) in Schedule 1
Omit “The statutory”, substitute “In a case covered by paragraph 268‑10(1)(a) (estimate of liability under requirement to pay to the Commissioner amounts you have withheld under the Pay as you go withholding rules), the statutory”.
45  After subsection 268‑90(2) in Schedule 1
Insert:
	(2A)	In a case covered by paragraph 268‑10(1)(b) (estimate of liability to pay superannuation guarantee charge), the statutory declaration or affidavit must verify the following facts:
	(a)	your name and address;
	(b)	for each employee for whom you have an *individual superannuation guarantee shortfall for the relevant *quarter:
	(i)	the employee’s name and postal address and, if the employee has *quoted the employee’s *tax file number to you, the employee’s tax file number; and
	(ii)	the amount of the shortfall;
	(c)	what has been done to comply with your obligation to pay the relevant superannuation guarantee charge to the Commissioner.
46  Saving provision—estimates
An estimate:
	(a)	made under section 268‑10 in Schedule 1 to the Taxation Administration Act 1953; and
	(b)	in force just before the commencement of this item;
has effect, from that commencement, as if it had been made under that section as amended by this Schedule.
47  Application of amendments
The amendments made by this Division apply to superannuation guarantee charge for a quarter if the day by which you must lodge a superannuation guarantee statement for the quarter occurs on or after the day this item commences.
Division 2—Penalties
Superannuation Guarantee (Administration) Act 1992
48  Subsection 63A(3)
After “subsection 268‑20(3)”, insert “, or section 269‑40,”.
Taxation Administration Act 1953
49  Section 269‑1 in Schedule 1
After “Division 268”, insert “in this Schedule and Part 3 of the Superannuation Guarantee (Administration) Act 1992 (obligation to pay superannuation guarantee charge)”.
50  Paragraph 269‑5(a) in Schedule 1
Repeal the paragraph, substitute:
	(a)	meets its obligations under:
	(i)	Subdivision 16‑B (obligation to pay withheld amounts to the Commissioner); and
	(ii)	Division 268 (estimates of PAYG withholding liabilities and superannuation guarantee charge); and
	(iii)	Part 3 of the Superannuation Guarantee (Administration) Act 1992 (obligation to pay superannuation guarantee charge); or
51  Subsection 269‑10(1) in Schedule 1 (table)
Repeal the table, substitute:

Obligations that directors must cause company to comply with	
Item	Column 1
This Division applies if, on a particular day (the initial day), a company is a company registered under the Corporations Act 2001, and on the initial day …	Column 2
and the company is obliged to pay to the Commissioner on or before a particular day (the due day) …	
1	the company withholds an amount under Division 12	that amount in accordance with Subdivision 16‑B.	
2	the company receives an *alienated personal services payment	an amount in respect of that alienated personal services payment in accordance with Division 13 and Subdivision 16‑B.	
3	the company provides a *non‑cash benefit	an amount in respect of that benefit in accordance with Subdivision 16‑B.	
4	the company is given notice of an estimate under Division 268	the amount of the estimate.	
5	a *quarter ends	superannuation guarantee charge for the quarter in accordance with the Superannuation Guarantee (Administration) Act 1992.	
52  At the end of section 269‑10 in Schedule 1
Add:
Superannuation guarantee charge
	(3)	For the purposes of this Division, the company’s superannuation guarantee charge for a *quarter under the Superannuation Guarantee (Administration) Act 1992 is treated as being payable on the day by which the company must lodge a superannuation guarantee statement for the quarter under section 33 of that Act, even if the charge is not assessed under that Act on or before that day.
53  Subsection 269‑30(2) in Schedule 1 (table)
At the end of the table, add:
3	superannuation guarantee charge for a *quarter,	the due day,	(a) if the company, on or before the last day mentioned in column 2, lodges under section 33 of the Superannuation Guarantee (Administration) Act 1992 a superannuation guarantee statement for the quarter—the extent (if any) to which the sum mentioned in paragraph 35(1)(e) of that Act is less than the amount of the superannuation guarantee charge the company is obliged to pay for the quarter; or
(b) otherwise—to any extent.	
54  Subsection 269‑30(2) in Schedule 1 (note)
Omit “Note”, substitute “Note 1”.
55  At the end of subsection 269‑30(2) in Schedule 1
Add:
Note 2:	The sum mentioned in paragraph 35(1)(e) of the Superannuation Guarantee (Administration) Act 1992 is the sum of:
(a)	the total of the company’s individual superannuation guarantee shortfalls; and
(b)	the company’s nominal interest component; and
(c)	the company’s administration component;
	specified in the superannuation guarantee statement.
56  After subsection 269‑35(3) in Schedule 1
Insert:
Superannuation guarantee charge—reasonably arguable position
	(3A)	You are not liable to a penalty under this Division to the extent that the penalty resulted from the company treating the Superannuation Guarantee (Administration) Act 1992 as applying to a matter or identical matters in a particular way that was *reasonably arguable, if the company took reasonable care in connection with applying that Act to the matter or matters.
57  Application of amendments
The amendments made by this Division apply to a company’s liability to pay superannuation guarantee charge for a quarter if the day by which the company must lodge a superannuation guarantee statement for the quarter occurs on or after the day this item commences.