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A4.460 Deduction of tax at source—excepted payments between companies etc

ITA 2007, Pt 15 provides for the deduction of tax from various types of payments as outlined in this Division. See the list at A4.401. Each category of payment includes some exemptions from the requirement to deduct. The following commentary deals with a further exemption for 'excepted payments' which applies to payments of different types where the payer and the recipient meet the necessary criteria.

The rules are contained in ITA 2007, ss 929–938 (Pt 15, Ch 11). Payment may be made without deduction if, at the time the payment is made, the payer reasonably believes that the payment is an 'excepted payment'¹.

The payment must be made by a company, by a local authorityor by a partnership of which at least one of the members is a company or local authority (a 'qualifying partnership')². A company acting as trustee or agent for another person does not qualify³.

The payments to which the exception from the duty