Income Tax Act 2007 section 982

Income tax is calculated by reference to gross amounts

Section 982 establishes that where income tax must be deducted from a payment at a specified rate, the rate is applied to the gross amount before any such deduction is made.

• When a provision requires income tax to be deducted from a payment at a specified rate, the rate applies to the gross amount
• The gross amount means the payment before any deduction of income tax under this part of the Act
• This ensures a consistent basis for calculating tax deductions across all relevant provisions
• The rule prevents the circular problem of calculating tax on an amount that has already had tax removed