Definition of "cultivation contract work"

2010 definition amends 'cultivation contract work' to ensure tax is withheld at source from payments for work for labour-only services.

In schedule 4, part C, clause 2 of the Income Tax Act 2007, the definition of "cultivation contract work" has been amended to clarify that the schedular payments rules only apply to works or services provided under a contract or arrangement for the supply of labour, or substantially for the supply of labour in relation to land that is intended to be used for the cultivation of fruit crops, vegetables, orchards or vineyards.

The effect of the amendment ensures that tax is to be withheld at source (under the PAYE rules) from payments for cultivation contract work that are for labour-only services, or substantially labour-only services. This amendment ensures that the definition does not include payments for services that involve a high capital element such as the use of a combine harvester.

Application date

The amendment applies from 1 April 2010.