Editing Tax file number (section)

==TFN withholding tax==
In the few cases that a payee has not supplied the paying entity with their TFN by the time payment is to be made, unless if the payment is exempt, the paying entity is legally required to withhold a TFN withholding tax amount at the highest marginal tax rate (currently 47%) from the payment the paying entity is about to make. Similar but stricter rules apply to businesses which do not supply their customers with an ABN.

The paying entity would report the TFN and ABN withheld amounts on its next [[Business Activity Statement]] (BAS) and add the withheld amounts to the payment it needs to make to the ATO. The paying entity would also advise the recipient of the TFN withheld amount.

The TFN withheld amount becomes a prepayment of tax by the taxpayer whose funds have been withheld. When the taxpayer files an income tax return he or she would need to claim the so-called "TFN amounts" against his or her final tax liability, and any excess is refunded. The taxpayer needs to file an income tax return to get back the excess of tax.