Income Tax Act 2007

General collection rules - Employment-related taxes - Calculating amounts of tax

RD 70: Calculating amounts of tax on failure to withhold

You could also call this:

"Working out tax owed when it wasn't taken out"

When you do not withhold tax under section RD 65(3), you need to calculate the amount of tax. You use a formula to work out the tax amount. The formula is: (tax rate ÷ (1 − tax rate) × contribution to fund) − tax already paid. You find the tax rate in schedule 1, part D. The contribution to fund is the amount received by the superannuation fund, excluding tax. Tax already paid is any tax already paid for the contribution. The tax rate is the basic rate at the time the contribution was made. You must use the correct tax rate to calculate the tax amount. This helps you work out how much tax you owe.

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Topics:

Money and consumer rights > Taxes

RD 69: Choosing different rates for employer's superannuation cash contributions, or

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"Tax rules for superannuation fund payments and contributions"

Part RGeneral collection rules
Employment-related taxes: Calculating amounts of tax

RD 70Calculating amounts of tax on failure to withhold

This section applies when an employer, person, or PAYE intermediary does not withhold under section RD 65(3) an amount of tax for an employer's superannuation cash contribution.
The amount of tax is calculated using the formula—
$(tax rate ÷ (1 − tax rate) × contribution to fund) − tax already paid.$

Where:
In the formula,—
tax rate is the basic rate set out in schedule 1, part D (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) at the time the contribution was made:
contribution to fund is the amount of the contribution received by the superannuation fund excluding the amount of tax:
tax already paid is any amount of tax for the contribution that has already been paid.

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2004 No 35 s NE 5

Notes

Section RD 70(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 523(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 70(1): amended (with effect on 1 April 2008), on 2 November 2012, by section 144(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RD 70(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 70 list of defined terms basic rate: repealed, on 24 February 2016, by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section RD 70 list of defined terms employer's superannuation cash contribution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 523(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 70 list of defined terms employer's superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 523(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).