Australian Business Number (ABN) Requirements and Contract Deposit Payments to Overseas Artists
As from 1 May, 2013 the Australian Taxation Office (ATO) has insisted that each and every contracting artist, or his/her corporation, is required to apply for an ABN.
This simple requirement has caused several issues which had not been considered previously.
One of these issues relates to the withholding rate applicable to deposit and/or fee instalment payments made at a time during which the artist has not yet been in a position to apply for an ABN. In this regard, a promoter may apply for a variation of the regulation which directs the artist to quote an ABN to the promoter in order to avoid the no-ABN rule and which requires tax to be withheld at the top marginal rate of 47%.
In this regard, we enclose the text of a letter which the ATO will issue to promoters upon their application for such variation. Promoters are advised to email the Sports, Entertainment, and Major Events area of the ATO at email@example.com and request a blanket variation for their organisation with respect to the no-ABN regulation based upon the attached text. This variation will exempt a promoter from the no-ABN withholding rule for all contractual payments made up to 30 days prior to the date of the first planned performance of a tour.
If any payments are to be made within 30 days of the first performance the promoter should enquire of the artist, or its local representative, if an ABN has been issued to it or whether an ABN application has been submitted on its behalf. If either of these circumstances apply the no-ABN rule will not be applicable during this 30 day period.
If you have any queries in relation to this, or any other related matter, please do not hesitate to