On 4 September 2009, the Assistant Treasurer, Senator Nick Sherry, announced that amendments would be made to the PAYG-I provisions to clarify and give better effect to the calculation of the PAYG instalment income in respect of financial arrangements subject to the Taxation of financial arrangements (TOFA) 3 & 4.
The proposed amendments will repeal s 45-120(2B) of Schedule 1 to the Taxation Administration Act 1953 to restore the position in relation to the PAYG instalments system as it was prior to TOFA 3 & 4. The amendments also include transitional provisions that will apply to taxpayers who have an amount included in their instalment income on the basis of the existing law for an instalment quarter starting on or after 1 July 2009 and ending before the proposed amendments are enacted.
The amendments will affect taxpayers who:
- are subject to TOFA 3 & 4 (whether mandatorily or by election),
- make the early start election,
- are quarterly PAYG taxpayers who pay on the basis of instalment income, and
- have an amount included in their instalment income on the basis of the existing law for an instalment quarter that ends before the proposed amendments are enacted.
For the ATO administrative treatment pending passage of the amending legislation, go here