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HD 4: Treatment of principals
or “Your tax responsibilities when using an agent”
You could also call this:

“How agents can pay and collect tax on behalf of principals”

When the Commissioner assesses how much tax you need to pay, this is enough for an agent to pay the tax on your behalf if you have one. If your agent pays tax for you, you need to pay them back. The agent can either ask you for the money or take it from any of your money they’re holding.

Your agent can keep some of your money to pay for tax that they might have to pay in the future. They can do this at any time during the tax year when the tax is due, or even in a later year.

Sometimes, your agent might not have enough of your money to pay your tax. If they haven’t spent the money on something else after they found out about the tax, and if paying would cause them problems, the Commissioner can give them more time to pay.

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Next up: HD 6: When relationship effectively that of principal and agent

or “When someone else has significant control over your business”
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Part H Taxation of certain entities
Agents

HD 5Matters between principals and agents

  1. The Commissioner’s assessment is, as between principal and agent, sufficient authority for the payment of tax by the agent.

  2. On paying tax, an agent is entitled to be reimbursed by the principal, and may—

  3. recover the amount from the principal; or
    1. subtract the amount from money held by the agent that belongs or is payable to the principal.

      1. For the purposes of paying tax in relation to which an agent is or may become liable, the agent may retain from money that belongs or is payable to the principal an amount that is reasonably sufficient to pay the tax. This subsection applies at a time in an income year in which the tax is due or in a later income year.

      2. The Commissioner may set a new due date for an agent to pay a tax liability if—

      3. the agent—
        1. is unable to pay the tax liability out of money that the agent holds that belongs to the principal; and
          1. has not paid away an amount after being assessed in relation to the agency; and
          2. the enforcement of payment would cause hardship to the agent.

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