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Income tax: during the course of a year of income, may the Commissioner of Taxation refund to an employer excess tax instalment deductions (TIDs) paid by the employer under the pay-as-you-earn (PAYE) arrangements, where the excess TIDs, mistakenly, were not made in accordance with the rates prescribed?

Notice of Withdrawal

This Determination explained that while there was no express power in Division 2 of Part VI of the Income Tax Assessment Act 1936 to refund excess TIDs, the High Court of Australia in David Securities Pty Ltd & Ors v. Commonwealth Bank of Australia (1992) 175 CLR 353; 92 ATC 4658; (1992) 24 ATR 125, indicated that moneys paid under a mistake of fact or law are refundable to the payer. This decision enabled the Commissioner to refund to an employer excess TIDs which were mistakenly paid during the course of a year of income.

The Pay As You Go (PAYG) withholding system, which expressly provides relevant refund rules under Subdivision 18-B of Schedule 1 to the Taxation Administration Act 1953, replaced the PAYE system for the 2000-2001 income year and later income years.

Accordingly, this Taxation Determination is no longer current.

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