ATO Fact Sheet on PAYG Withholding Requirements

The Australian Tax Office (ATO) has issued a Fact Sheet that explains PAYG withholding if a Not for Profit organisation does not provide its ABN or TFN to its investment body.

It explains how to claim an exemption from quoting a TFN and how to apply for a refund or credit of TFN amounts withheld.

Under the PAYG withholding requirements, an investment body (such as a bank, building society, unit trust or public company) must withhold an amount known as a ‘TFN withholding’ from the interest or dividends payable on an investment, unless the holder of the investment has:
- quoted its ABN or its TFN to the investment body, or
- claimed an exemption from quoting a TFN to the investment body.

A Not for Profit organisation may be able to claim an exemption from quoting either number if it is not required to lodge income tax returns.

NFPs must advise the investment body in writing that the organisation is claiming an exemption from quoting a TFN. The Tax Office does not have a specific form for this purpose. The written advice to the investment body should include:
- the organisation’s name and address
- details of the accounts and investments the organisation is claiming an exemption for, and
- the reason the organisation is not required to lodge an income tax return.

If the organisation is not required to lodge an income tax return because it is a non-profit company whose taxable income is $416 or less per annum, you can state the following reason:
The organisation is claiming an exemption from quoting a tax file number because it is a Not for Profit organisation which is not required to lodge an income tax return.

If your organisation is income tax exempt under the tax law, you can state the following reason:
The organisation is claiming an exemption from quoting a tax file number because it is an income tax exempt organisation which is not required to lodge a tax return.

The Fact Sheet is available at:
http://www.ato.gov.au/distributor.asp?doc=/content/Content/18673.htm