State and territory government-owned enterprises listed in the National Tax Equivalent Regime (NTER) entity register are not subject to federal income tax. However, to comply with the National Competition Policy, NTER entities must pay Commonwealth tax equivalents.
In 2001, the Commonwealth, state and territory governments agreed to establish an NTER for larger government-owned enterprises and other enterprises where competitive neutrality issues arise.
The NTER is an administrative intergovernmental arrangement under which federal income tax laws are applied notionally to the NTER entities as if they were subject to these laws.
The NTER Manual sets out the operating features of the NTER, including any modifications to the federal income tax laws, taking into account the NTER entities tax history, ownership by state and territory governments, and activities that may be regarded as unique to public sector enterprises.
Monthly and quarterly NTER PAYG payments are due within 21 days after the end of each instalment month or quarter.
If you have a question about your NTER liability, contact the NTER administrator at the ATO.
Applications for NTER private rulings are to be made in the same manner and on the same grounds as are set out for taxpayers in Division 359 in Schedule 1 of the Taxation Administration Act 1953.
An objection against an NTER-related decision is dealt with by an ATO officer. The reviewing ATO officer will be independent from and at an equal or a higher level than the ATO officer who made the disputed decision.
To ensure the integrity of an NTER, the ATO can conduct compliance assurance measures, which will be outlined in an agreed work plan.
For more information, see the Taxpayers' Charter .