2007

THE LEGISLATIVE ASSEMBLY

FOR THE AUSTRALIAN CAPITAL TERRITORY

(As presented)

(Treasurer)

2007

THE LEGISLATIVE ASSEMBLY

FOR THE AUSTRALIAN CAPITAL TERRITORY

(As presented)

(Treasurer)

An Act to amend the Payroll Tax Act 1987, and for other purposes

The Legislative Assembly for the Australian Capital Territory enacts as follows:

This Act is the Payroll Tax Amendment Act 2007.

This Act commences on a day fixed by the Minister by written notice.

Note 1 The naming and commencement provisions automatically commence on the notification day (see Legislation Act, s 75 (1)).

Note 2 A single day or time may be fixed, or different days or times may be fixed, for the commencement of different provisions (see Legislation Act, s 77 (1)).

Note 3 If a provision has not commenced within 6 months beginning on the notification day, it automatically commences on the first day after that period (see Legislation Act, s 79).

This Act amends the Payroll Tax Act 1987.

Note This Act also amends the Taxation Administration Act 1999 (see sch 1).

Note 1 The dictionary at the end of this Act defines certain terms used in this Act, and includes references (signpost definitions) to other terms defined elsewhere in this Act.

For example, the signpost definition ‘wages—see section 2.’ means that the term ‘wages’ is defined in that section.

(1) The wages made up of the grant of a share or option are taken to be paid or payable in the ACT if—

(a) for a share—the share is a share in a local company; or

(b) for an option—the option is an option to acquire shares in a local company.

(2) In any other case, the wages made up of the grant of the share or option are taken to be paid or payable outside the ACT.

Note If wages made up of the grant of a share or option to acquire a share are taken to be payable outside the ACT because the share is a share in a company that is not a local company, the grant of the share or option may still be liable to payroll tax under this Act if the grant is made in relation to services performed wholly in the ACT (see s 2D (1)).

(3) In this section:

local company means—

(a) a company incorporated or taken to be incorporated under the Corporations Act that is taken to be registered in the ACT for that Act; or

(b) any other body corporate that is incorporated under a Territory law.

A reference in this Act to wages paid or payable by a member of a group includes wages that would be taken to be paid or payable by a member of the group if the member were the employer of the employee to whom the wages were paid.

(a) wages that are paid or payable in the ACT in a month or part of a month, other than wages paid or payable in relation to services performed—

(i) wholly in another Territory or a State; or

(ii) by a person wholly in another country for a continuous period of more than 6 months beginning on the day when wages are first paid or payable to the person for the services;

or rendered

A reference in this Act to a benefit—

(a) is a reference to a fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth); but

(b) does not include a reference to a superannuation benefit.

(1) For this Act, the value of a benefit provided by an employer during a financial year is calculated as follows:

(2) In this Act, a reference to wages paid or payable as a benefit in a month is—

(a) a reference to the value of the benefit paid in the month; or

(b) if an election by the employer is in force under section 3B—a reference to an amount calculated in accordance with section 3B.

(3) In this Act, a reference to wages paid or payable as a benefit in a year is a reference to an amount calculated by adding the amounts under subsection (2) for the months of the year.

(4) In this section:

FBT rate means the rate of fringe benefits tax imposed by the Fringe Benefits Tax Assessment Act 1986 (Cwlth) that applies when the liability to payroll tax under this Act arises.

TV means the value that would be the taxable value of the benefit as a fringe benefit for the Fringe Benefits Tax Assessment Act 1986 (Cwlth).

(1) An employer who has paid or is liable to pay fringe benefits tax under the Fringe Benefits Tax Assessment Act 1986 (Cwlth) in relation to a period of not less than 15 months before 30 June in any year may elect to include as the value of the benefits paid or payable by the employer during a month—

(a) in a return lodged in relation to each of the first 11 months after 30 June in the year—¹/12th of the amount determined in accordance with subsection (2), or the part of that amount that under section 2D (Wages to which this Act applies) consists of wages for the year of tax (within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth)) ending on 31 March before the start of the current financial year; and

(b) in the return lodged in relation to the 12th month—the amount determined in accordance with subsection (2), or the part of that amount that under section 2D consists of wages for the year of tax (within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth)) ending on 31 March before the month, less the total amounts of fringe benefits included in the returns for each of the earlier 11 months.

(2) An amount is determined in accordance with this subsection as follows:

(3) An election under subsection (1) takes effect when it is notified to the commissioner.

Note If a form is approved under the Taxation Administration Act 1999, s 139C for this section, the form must be used.

(4) If an employer makes an election under subsection (1), the employer must lodge returns containing amounts calculated in accordance with the election unless the commissioner approves, by written notice given to the employer, the termination of the election and allows the employer to include the value mentioned in section 3A (2) (a) (Value of benefit).

(5) If an employer ceases to be liable to pay payroll tax, the value of taxable wages consisting of fringe benefits to be included in the employer’s final return is (whether or not the employer has made an election under subsection (1)) the value of the benefits paid or payable by the employer for the period starting on the previous 1 July until the date on which the employer ceases to be liable to payroll tax, less the value of the benefits paid or payable by the employer during the period for which payroll tax has been paid.

(6) In this section:

AFBA means the aggregate fringe benefits amount within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth), section 136.

FBT rate means the rate of fringe benefits tax imposed by the Fringe Benefits Tax Assessment Act 1986 (Cwlth) that applies when the liability to payroll tax under this Act arises.

(1) For this Act, wages, for a financial year, does not include the exempt component of a motor vehicle allowance paid or payable for the year.

(2) If the total motor vehicle allowance paid or payable to an employee for a financial year does not exceed the exempt component, the motor vehicle allowance is not wages for this Act.

(3) If the total motor vehicle allowance paid or payable to an employee for a financial year exceeds the exempt component (if any), only the amount that exceeds the exempt component of the motor vehicle allowance is included as wages for this Act.

(4) The exempt component of a motor vehicle allowance paid or payable for a financial year is calculated as follows:

(5) In this section:

E means the exempt component.

K means the number of business kilometres travelled during the financial year.

R is the exempt rate.

(6) K is calculated using the continuous recording method, or the averaging method, selected and used by the employer in accordance with schedule 2 (Motor vehicle allowances).

(7) The commissioner may, in writing, approve the use by an employer of another method of determining K (including the use of an estimate).

Note Power to make a statutory instrument includes power to make different provision for different categories (see Legislation Act, s 48).

(8) If the commissioner approves the use of a method under subsection (7) for an employer for a financial year, the employer must use the method to calculate K.

(9) The Minister may determine the exempt rate for a financial year.

(10) If the Minister does not determine the exempt rate for a financial year, the exempt rate for the financial year is the rate prescribed by regulation under the Income Tax Assessment Act 1997 (Cwlth), section 28-25 for calculating a deduction for car expenses for a large car using the ‘cents per kilometre method’ in the financial year immediately before the financial year in which the allowance is paid or payable.

(11) A determination under this section is a notifiable instrument.

Note A notifiable instrument must be notified under the Legislation Act.

(1) For this Act, wages, for a financial year, does not include an accommodation allowance paid or payable to an employee for a night’s absence from the person’s usual place of residence that does not exceed the exempt rate.

(2) If the accommodation allowance paid or payable to an employee for a night’s absence from the person’s usual place of residence exceeds the exempt rate, wages includes the allowance only to the extent that it exceeds the exempt rate.

(3) The Minister may determine the exempt rate for a financial year.

(4) If the Minister does not determine the exempt rate for a financial year, the exempt rate for the financial year is the total reasonable amount for daily travel allowance expenses using the lowest capital city for the lowest salary band for the financial year determined by the Commissioner of Taxation of the Commonwealth.

(5) A determination under this section is a notifiable instrument.

Note A notifiable instrument must be notified under the Legislation Act.

In this division:

associated person means a person who is associated with another person in accordance with any of the following:

(a) people are associated people if they are related people;

(b) individuals are associated people if they are partners in a partnership to which the Partnership Act 1963 applies;

(c) private companies are associated people if common shareholders have a majority interest in each private company;

(d) trustees are associated people if any person is a beneficiary common to the trusts (not including a public unit trust scheme) of which they are trustees;

(e) a private company and a trustee are associated people if a related body corporate of the company is a beneficiary of the trust (not including a public unit trust scheme) of which the trustee is a trustee.

business includes any of the following, whether carried on by 1 person or 2 or more people together:

(a) a profession or trade;

(b) any other activity carried on for fee or reward;

(c) the activity of employing people to perform duties in connection with another business;

(d) the carrying on of a trust (including a dormant trust);

(e) the activity of holding any money or property used in connection with another business.

entity means—

(a) a person; or

(b) 2 or more people who are associated people.

group means a group under this division but does not include any member of the group for whom a determination under section 3Q (Exclusion from groups) is in force.

private company means a company that is not limited by shares, or whose shares are not quoted on the Australian Stock Exchange or any other exchange of the World Federation of Exchanges.

related person means a person who is related to another person in accordance with any of the following provisions:

(a) individuals are related people if—

(i) they are domestic partners, or they have been domestic partners and the partnership has ended (whether the partnership ended in Australia or elsewhere); or

Note The Legislation Act, s 169 defines domestic partner and domestic partnership.

(ii) the relationship between them is that of parent and child, brothers, sisters or brother and sister;

(b) private companies are related people if they are related bodies corporate under the Corporations Act;

(c) an individual and a private company are related people if the individual is a majority shareholder or director of the company or of another private company that is a related body corporate of the company under the Corporations Act;

(d) an individual and a trustee are related people if the individual is a beneficiary of the trust (other than a public unit trust scheme) of which the trustee is a trustee;

(e) a private company and a trustee are related people if the company, or a majority shareholder or director of the company, is a beneficiary of the trust (other than a public unit trust scheme) of which the trustee is a trustee.

The fact that a person is not a member of a group under a provision of this division does not prevent the person from being a member of a group under another provision of this division.

A group is made up of all the people or bodies forming a group that is not part of a larger group.

(1) Corporations make up a group if they are related bodies corporate under the Corporations Act.

(2) In assessing whether corporations are related bodies corporate under the Corporations Act, a corporation that is a trustee company is taken to carry on a business.

Note Section 3Q allows the commissioner to exclude people from a group, but not if the person is a body corporate that, under the Corporations Act, s 50 is related to another body corporate that is a member of the group.

(1) If 1 or more employees of an employer perform duties in connection with 1 or more businesses carried on by the employer and 1 or more other people, the employer and each of the other people make up a group.

(2) If 1 or more employees of an employer are employed solely or mainly to perform duties in connection with 1 or more businesses carried on by 1 or more other people, the employer and each of the other people make up a group.

(3) If 1 or more employees of an employer perform duties in connection with 1 or more businesses carried on by 1 or more other people, and the duties are performed in connection with, or in fulfilment of the employer’s obligation under, an agreement, arrangement or undertaking for the provision of services to any 1 or more of the other people in connection with the business or businesses, the employer and each of the other people make up a group.

(4) Subsection (3) applies to an agreement, arrangement or undertaking—

(a) whether the agreement, arrangement or undertaking is formal or informal, express or implied; and

(b) whether or not the agreement, arrangement or undertaking provides for duties to be performed by the employees or states the duties to be performed by them.

Note Section 3Q allows the commissioner to exclude people from a group in certain circumstances.

(1) If a person or set of people has a controlling interest in each of 2 businesses, the people who carry on the businesses make up a group.

Note Section 3Q allows the commissioner to exclude people from a group in certain circumstances.

(2) For this section, a person or set of people has a controlling interest in a business if 1 or more of the following applies:

(a) for 1 person—the person is the sole owner (whether or not as trustee) of the business;

(b) for a set of people—the people are together as trustees the sole owners of the business;

(c) for a business carried on by a corporation—

(i) the person or each of the set of people is a director of the corporation and the person or set of people is entitled to exercise more than 50% of the voting power at meetings of the directors of the corporation; or

(ii) a director or set of directors of the corporation that is entitled to exercise more than 50% of the voting power at meetings of the directors of the corporation is under an obligation, whether formal or informal, to act in accordance with the direction, instructions or wishes of the person or set of people;

(d) for a business carried on by a body corporate or unincorporated body—the person or set of people make up more than 50% of the board of management (however named) of the body or control the composition of the board;

(e) for a business carried on by a corporation that has a share capital—the person or set of people can, directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, more than 50% of the voting power attached to the voting shares, or any class of voting shares, issued by the corporation;

(f) for a business carried on by a partnership—the person or set of people—

(i) own (whether beneficially or not) more than 50% of the capital of the partnership; or

(ii) is entitled (whether beneficially or not) to more than 50% of the profits of the partnership;

(g) for a business carried on under a trust (the 1st trust)—the person or set of people (whether or not as a trustee of, or beneficiary under, another trust) is the beneficiary of more than 50% of the value of the interests in the first trust.

(3) If—

(a) 2 corporations are related bodies corporate under the Corporations Act; and

(b) 1 of the corporations has a controlling interest in a business;

the other corporation has a controlling interest in the business.

(4) If—

(a) a person or set of people has a controlling interest in a business; and

(b) a person or set of people who carry on the business has a controlling interest in another business (the 2nd business);

the person or set of people mentioned in paragraph (a) has a controlling interest in the 2nd business.

(5) If—

(a) a person or set of people is the beneficiary of a trust of more than 50% of the value of the interests in the trust; and

(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of another trust;

the person or set of people has a controlling interest in the business of the other trust.

(6) A person who may benefit from a discretionary trust because the trustee or another person, or the trustee and another person, exercises or fails to exercise a power or discretion, is taken, for this division, to be a beneficiary of more than 50% of the value of the interest in the trust.

(7) If—

(a) a person or set of people has a controlling interest in the business of a trust; and

(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of a corporation;

the person or set of people is taken to have a controlling interest in the business of the corporation.

(8) If—

(a) a person or set of people has a controlling interest in the business of a trust; and

(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of a partnership;

the person or set of people is taken to have a controlling interest in the business of the partnership.

(1) An entity and a corporation form part of a group if the entity has a controlling interest in the corporation.

Note Section 3Q allows the commissioner to exclude people from a group, but not if the person is a body corporate that, under the Corporations Act, s 50 is related to another body corporate that is a member of the group.

(2) For this section, an entity has a controlling interest in a corporation if the corporation has share capital and—

(a) the entity has a direct interest in the corporation and the value of the direct interest exceeds 50%; or

(b) the entity has an indirect interest in the corporation and the value of the indirect interest exceeds 50%; or

(c) the entity has an aggregate interest in the corporation and the value of the aggregate interest exceeds 50%.

(3) Subdivision 1A.4.3 applies to this section.

If a person is a member of 2 or more groups, the members of all the groups together make up a group.

Note See also s 3G (Make up of groups).

This subdivision applies to section 3K.

(1) An entity has a direct interest in a corporation if—

(a) for an entity that is a person—the person can directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, the voting power attached to any voting share issued by the corporation; or

(b) for an entity that is 2 or more people who are associated people—each of the associated people can, directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, the voting power attached to any voting share issued by the corporation.

(2) The value of the direct interest of the entity in the corporation is the proportion (expressed as a percentage) of the voting power of all voting shares issued by the corporation that—

(a) for an entity that is a person—the person can directly or indirectly exercise, control the exercise of, or substantially influence the exercise of, as mentioned in subsection (1); or

(b) for an entity that is 2 or more people who are associated people—the associated people can, if acting together, directly or indirectly exercise, control the exercise of, or substantially influence the exercise of, as mentioned in subsection (1).

(1) An entity has an indirect interest in a corporation if the corporation is linked to another corporation (the directly controlled corporation) in which the entity has a direct interest.

(2) A corporation is linked to a directly controlled corporation if the corporation is part of a chain of corporations—

(a) that starts with the directly controlled corporation; and

(b) in which a link in the chain is formed if a corporation has a direct interest in the next corporation in the chain.

Corporation A (a directly controlled corporation) has a direct interest in corporation B. Corporations A and B form part of a chain of corporations, and corporation B is linked to corporation A. Accordingly, an entity that has a direct interest in corporation A also has an indirect interest in corporation B.

Corporation B also has a direct interest in corporation C. In this case, corporations A, B and C form part of a chain of corporations. Both corporations B and C are linked to corporation A. The entity that has a direct interest in corporation A has an indirect interest in both corporations B and C.

Corporation B also has a direct interest in corporation D. There are now 2 chains of corporations, one consisting of A, B and C, and one consisting of A, B and D. Corporations B, C and D are all linked to corporation A and an entity that has a direct interest in corporation A would have an indirect interest in corporations B, C and D. An entity that has a direct interest in corporation B would have an indirect interest in corporations C and D. However, an entity that has a direct interest in corporation C only would not have an indirect interest in corporation D, as corporation D is not linked to corporation C.

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(3) The value of the indirect interest of an entity in a corporation (an indirectly controlled corporation) that is linked to a directly controlled corporation is calculated by multiplying together the following:

(a) the value of the direct interest of the entity in the directly controlled corporation;

(b) the value of each direct interest that forms a link in the chain of corporations by which the indirectly controlled corporation is linked to the directly controlled corporation.

An entity has a direct interest (with a value of 80%) in corporation A. Corporation A has a direct interest (with a value of 70%) in corporation B. The value of the indirect interest of the entity in corporation B is 80% × 70% (that is, 56%). Accordingly, in this example, the entity has a controlling interest under section 3K in corporation B.

Corporation B also has a direct interest (with a value of 40%) in corporation C. The value of the indirect interest of the entity in corporation C is 80% × 70% × 40% (that is, 22·4%). Accordingly, in this example, the entity does not have a controlling interest in corporation C.

(4) It is possible for an entity to have more than 1 indirect interest in a corporation.

1 An entity may have more that 1 indirect interest in a corporation if the corporation is linked to more than 1 corporation in which the entity has a direct interest.

2 An entity may have more that 1 indirect interest in a corporation if the corporation is linked to only 1 corporation in which the entity has a direct interest, but is linked through more than 1 chain of corporations. In this case, the entity has an aggregate interest in the corporation (see s 3P).

(1) An entity has an aggregate interest in a corporation if the entity—

(a) has a direct interest and 1 or more indirect interests in the corporation; or

(b) has more than 1 indirect interest in the corporation.

(2) The value of the aggregate interest of an entity in a corporation is calculated by adding together the following:

(a) the value of the direct interest (if any) of the entity in the corporation;

(b) the value of each indirect interest of the entity in the corporation.

An entity has a direct interest (with a value of 40%) in corporation B.

The entity also has a direct interest (with a value of 25%) in corporation A, which in turn has a direct interest (with a value of 60%) in corporation B. Accordingly, the entity also has an indirect interest in corporation B with a value of 15% (that is, 25% × 60%).

The value of the entity’s aggregate interest in corporation B is the total of the direct interest (40%) and the indirect interest (15%), which is 55%.

Accordingly, in this example, the entity has a controlling interest in corporation B under s 3K.

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(1) The commissioner may determine that a person who would, but for the determination, be a member of a group is not a member of the group.

(2) The commissioner may make a determination under subsection (1) only if satisfied, having regard to the nature and degree of ownership and control of the businesses, the nature of the businesses and any other matters the commissioner considers relevant, that a business carried on by the person is carried on independently of, and is not connected with the carrying on of, a business carried on by any other member of the group.

(3) The commissioner must not exclude a person from a group if the person is a corporation that, because of the Corporations Act, section 50 (Related bodies corporate) is related to another corporation that is a member of the group.

(4) This section extends to a group made up because of section 3L (Smaller groups included in larger groups).

(5) The commissioner may revoke a determination that applies to a person if satisfied that the circumstances in which the determination was made do not apply to the person.

(6) A determination under this section may provide for its commencement on or before the determination’s notification day.

Note This subsection provides express authority for a determination to commence on or before its notification day (see Legislation Act, s 73 (2) (d)).

(7) A determination under this section is a notifiable instrument.

Note 1 A notifiable instrument must be notified under the Legislation Act.

Note 2 Power to make a statutory instrument includes power to amend or repeal the instrument (see Legislation Act, s 46).

(1) The members of a group may, with the commissioner’s approval, designate a qualified member of the group to be the designated group employer for the group for this Act.

(2) A member of a group is a qualified member if the member—

(a) has during the previous financial year paid wages exceeding the amount determined for the year for section 7 (Registration of employers); or

(b) is likely during the current financial year to pay wages exceeding the amount determined for section 7.

(3) The members of a group may, with the commissioner’s approval, designate any member of the group to be the designated group employer for the group for the Act if none of the members of a group is a qualified member but the members together—

(a) have during the previous financial year paid wages exceeding the amount determined for the year for section 7; or

(b) are, in the commissioner’s opinion, likely during the current financial year to pay wages exceeding the amount determined for section 7.

(4) If the members of a group do not designate a member as the designated group employer within 7 days after the last day of the month in which the group is established, the commissioner may (but is not obliged to) designate a member of the group as the designated group employer.

(5) The designated group employer of a group stops being the designated group employer on the earlier of—

(a) the first day of a return period when there is a change in the membership of the group; or

(b) the first day of a return period when the members of the group revoke the designation.

(6) The designation of a designated group employer under subsection (1) or (3) must be—

(a) by written notice; and

(b) executed by or on behalf of each member of the group; and

(c) served on the commissioner.

or renders

or rendering

(3) The amount of payroll tax payable by an employer is calculated under division 2.3 (Liability to taxation—calculation of monthly payroll tax) and division 2.4 (Liability to taxation—calculation of payroll tax for financial year).

(1) This section applies to an employer if—

(a) the total of all taxable wages paid or payable anywhere by the employer in a month exceeds the amount determined for this section under the Taxation Administration Act 1999, section 139; or

(b) the employer is a member of a group and the total of all taxable wages paid or payable anywhere by the members of the group together in a month exceeds the amount determined for this section under the Taxation Administration Act 1999, section 139.

(1) If a member of a group fails to pay an amount that the member is required to pay under this Act in relation to any period, every member of the group is liable jointly and severally to pay the amount to the commissioner.

(2) If 2 or more people are jointly or severally liable to pay an amount under this section, the commissioner may recover the whole of the amount from them, any of them or any 1 of them.

(3) If, under this section, 2 or more people are jointly and severally liable to pay an amount that is payable by any 1 of them, each person is also jointly and severally liable to pay—

(a) any amount payable to the commissioner under this Act or another law in relation to the amount, including interest and penalty tax; and

(b) any costs and expenses incurred in relation to the recovery of the amount that the commissioner is entitled to recover from the person.

(4) Nothing in this Act prevents a person who is jointly and severally liable to pay an amount of tax and who pays the amount to the commissioner from recovering a contribution from any other person who is liable to pay the whole or part of the amount.

(5) This section applies whether or not the member was an employer during the relevant period.

renders

provides

This subdivision applies only to an employer who is not a member of a group.

(1) The amount of payroll tax payable by an employer on taxable wages paid or payable by the employer in a month is the amount calculated as follows:

(2) If D is equal to or more than TW for a month, the employer is not required to pay payroll tax for the month.

(3) In this section:

D means the deductible amount mentioned in section 9E or section 9F for the employer;

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (otherwise than as a member of a group) during the month.

(1) For an employer who pays or is liable to pay taxable wages in a month but does not pay and is not liable to pay interstate wages in the month, the deductible amount for the month is the amount determined for section 7 (Registration of employers).

(2) Subsection (1) applies whether the employer pays or is liable to pay wages for the whole of the month or only part of the month.

(1) The deductible amount for an employer who pays or is liable to pay taxable wages and interstate wages in a month is—

(a) if notice has been given under subsection (2) and no determination under subsection (6) is in force—the amount stated in the most recent notice given under subsection (2); or

(b) if a determination is in force under subsection (6)—the amount stated in the determination.

(2) From time to time, the employer may give a notice to the commissioner, containing the information required by the commissioner, of an amount, calculated in accordance with subsection (3), that the employer claims to be the employer's deductible amount for the month and subsequent months.

(3) The amount is to be calculated as follows:

(4) In subsection (3):

A means the amount determined for section 7 (Registration of employers).

D means the deductible amount for the month.

I means the estimated interstate wages in the financial year in which D occurs.

T means the estimated taxable wages in the financial year in which D occurs.

(5) The deductible amount claimed must not be more than the amount mentioned in section 9E (1).

(6) At any time, the commissioner may, by notice in writing to the employer, determine an amount, not more than the amount mentioned in section 9E (1), as the deductible amount for the employer for 1 or more months stated in the determination.

(7) A determination under subsection (6) may be made on application by the employer or on the commissioner’s own initiative.

(8) At any time, the commissioner may, by notice in writing to the employer, revoke a determination made under subsection (6).

This subdivision applies only to an employer who is a member of a group for which there is a designated group employer.

(1) If an approval is in force under section 16 (4) (Payroll tax returns) for the designated group employer to lodge a joint return—

(a) the amount of payroll tax payable by the designated group employer on taxable wages paid or payable in a month by the employers covered by the return is the amount calculated as follows:

(b) the amount of payroll tax payable by each employer who is a member of the group but is not covered by the return on taxable wages paid or payable by the employer in a month is the amount calculated as follows:

(2) If D is equal to or more than JTW for a month, the designated group employer is not required to pay payroll tax for the month.

(3) In this section:

D means the deductible amount mentioned in section 9J (Group with designated group employer—deductible amount for groups not paying interstate wages) or section 9K (Group with designated group employer—deductible amount for groups paying taxable and interstate wages) for the group.

JTW means the total taxable wages paid or payable during the month by the employers covered by the return (as members of a group).

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (as a member of the group) during the month.

(1) If an approval under section 16 (4) (Payroll tax returns) is not in force for the designated group employer to lodge a group return—

(a) the amount of payroll tax payable by the designated group employer on taxable wages paid or payable by the designated group employer in a month is the amount calculated as follows:

(b) the amount of payroll tax payable by each employer who is a member of the group on taxable wages paid or payable by the employer in a month is the amount calculated as follows:

(2) If D is equal to or more than GTW for a month, the designated group employer is not required to pay payroll tax for the month.

(3) In this section:

D means the deductible amount mentioned in section 9J (Group with designated group employer—deductible amount for groups not paying interstate wages) or section 9K (Group with designated group employer—deductible amount for groups paying taxable and interstate wages) for the group.

GTW means the total taxable wages paid or payable during the month by the designated group employer (as a member of a group).

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (as a member of the group) during the month.

(1) For a group in which 1 or more members pay or are liable to pay taxable wages in a month but no members pay or are liable to pay interstate wages in the month, the deductible amount for the month is the amount determined for section 7 (Registration of employers).

(2) Subsection (1) applies whether group members pay or are liable to pay wages for the whole of the month or only part of the month.

(1) The deductible amount for a group in which 1 or more members pay or are liable to pay taxable wages or interstate wages in a month is—

(a) if notice has been given under subsection (2) and no determination under subsection (6) is in force—the amount stated in the most recent notice given under subsection (2); or

(b) if a determination is in force under subsection (6)—the amount stated in the determination.

(2) From time to time, the designated group employer may give a notice to the commissioner, containing the information required by the commissioner, of an amount, calculated in accordance with subsection (3), that the employer claims to be the group’s deductible amount for the month and subsequent months.

(3) The amount is to be calculated as follows:

(4) In subsection (3):

A means the amount determined for section 7 (Registration of employers).

D means the deductible amount for the month.

I means the estimated interstate wages payable by the group in the financial year in which D occurs.

T means the estimated taxable wages payable by the group in the financial year in which D occurs.

(5) The deductible amount claimed must not be more than the amount mentioned in section 9J (1).

(6) At any time, the commissioner may, by notice in writing to the designated group employer, determine an amount, not more than the amount mentioned in section 9J (1), as the deductible amount for the group for 1 or more months stated in the determination.

(7) A determination under subsection (6) may be made on application by the designated group employer or on the commissioner’s own initiative.

(8) At any time, the commissioner may, by notice in writing to the designated group employer, revoke a determination made under subsection (6).

This subdivision applies only to an employer who is a member of a group for which there is no designated group employer.

(1) The amount of payroll tax payable by each member of the group on taxable wages paid or payable by the member in a month is the amount calculated as follows:

(2) In this section:

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (as a member of the group) during the month.

This division may apply to a period other than a financial year or a month (see s 17 (4) (b)).

(1) This section applies only to an employer who is not a member of a group.

(2) The employer is not liable to pay payroll tax for a financial year if the total taxable wages and interstate wages paid or payable by the employer (otherwise than as a member of a group) during the year is not more than the employer’s threshold amount calculated as follows:

(3) If the total taxable wages and interstate wages paid or payable by an employer (otherwise than as a member of a group) during a financial year is more than the employer’s threshold amount, the employer is liable to pay as payroll tax for the year the amount calculated as follows:

(4) In this section:

C means the number of days in the financial year for which the employer paid or was liable to pay taxable wages or interstate wages (otherwise than as a member of a group).

DFY means the number of days in the financial year.

IW means the total interstate wages paid or payable by the employer (otherwise than as a member of a group) during the financial year.

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TA means the amount determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (otherwise than as a member of a group) during the financial year.

(1) This section applies only to an employer who is a member of a group for which there is a designated group employer.

(2) None of the members of a group is liable to pay payroll tax for a financial year if the total taxable wages and interstate wages paid or payable by the group during the year is not more than the group threshold amount, calculated as follows:

(3) If the total taxable wages and interstate wages paid or payable by a group during the financial year is more than the group threshold amount, payroll tax is payable in accordance with subsection (4) and subsection (5).

(4) The designated group employer for the group is liable to pay as payroll tax for the financial year the amount calculated as follows:

(5) Each member of the group (other than the designated group employer) is liable to pay as payroll tax for the financial year the amount calculated as follows:

(6) In this section:

C means the number of days in the financial year for which at least 1 member of the group paid or was liable to pay (as a member of the group) taxable wages or interstate wages.

DFY means the number of days in the financial year.

GIW means the total interstate wages paid or payable by the group during the financial year.

GTW means the total taxable wages paid or payable by the group during the financial year.

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TA means the amount determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (as a member of the group) during the financial year.

(1) This section applies only to an employer who is a member of a group for which there is no designated group employer.

(2) Each member of the group is liable to pay as payroll tax for the financial year the amount calculated as follows:

(3) In this section:

R means the rate determined under the Taxation Administration Act 1999, section 139 for this section.

TW means the total taxable wages paid or payable by the employer (as a member of the group) during the financial year.

In this division:

group employer means an employer who is a member of a group.

individual employer means an employer who is not a member of a group.

(1) For this division, the correct amount of payroll tax payable by an employer for a financial year is the amount determined in accordance with section 10 (Amount of tax payable—employer not member of group), section 11 (Amount of tax payable—group with a designated group employer) or section 12 (Amount of tax payable—group with no designated group employer) for the year.

(2) This division applies to payroll tax paid or payable by an employer whether as an individual employer or a group employer.

(3) If an employer is liable for payroll tax both as an individual employer and a group employer (for different periods in the same financial year) separate adjustments must be made under this division for any period as an individual employer and any period as a group employer (and separate determinations of the correct amount of payroll tax payable by the employer must be made).

(1) If the amount of payroll tax paid or payable by an employer when the employer lodges the returns for a financial year exceeds the correct amount of payroll tax payable by the employer for the financial year, the commissioner (on application by the employer) must refund to the employer an amount equal to the difference.

(2) If the amount of payroll tax paid or payable by an employer when the employer lodges the returns for a financial year is less than the correct amount of payroll tax payable by the employer for the financial year, the employer must pay the commissioner as payroll tax an amount equal to the difference.

(3) Any amount payable by an employer under this section for a financial year must be paid within the period during which the employer is required to lodge a return under this Act for the return period that is or includes the month of June in the financial year.

(4) The amount of any refund payable to an employer for a financial year under this section must be reduced by the amount of any other refund of payroll tax made for the financial year to the employer (whether under this section or otherwise) before the time of the refund under this section.

(1) This section applies if an employer’s circumstances change during a financial year.

(2) The employer must, if the amount of payroll tax paid or payable by the employer when the employer lodges returns for the relevant period before the change of circumstances is less than the correct amount of payroll tax payable by the employer for the financial year, pay the commissioner as payroll tax an amount equal to the difference.

(3) A change of circumstances occurs if the employer—

(a) ceases to pay or be liable to pay taxable wages and interstate wages; or

(b) becomes a group employer following a period as an individual employer; or

(c) ceases to be a group employer and becomes an individual employer.

(4) The relevant period before a change of circumstances is the period before the change (during the financial year and after any earlier change of circumstances) for which the employer paid or was liable to pay taxable wages or interstate wages.

(5) In calculating the correct amount of payroll tax payable by the employer, the wages paid or payable by the employer during the relevant period are taken to be the only wages paid or payable by the employer during the financial year.

(6) Any amount payable by an employer under this section for a relevant period must be paid within the period during which the employer is required to lodge a return under this Act for the relevant period or the last return under this Act for the relevant period.

(7) Any payroll tax paid or payable by an employer under this section must be included as payroll tax paid or payable by the employer for the annual adjustment of payroll tax under this division.

If an employer ceases to be a group employer during a financial year an adjustment will be made under this section. If later in that financial year the employer ceases to pay wages there will be a further adjustment under this section. The first adjustment will adjust payroll tax paid for the period as a group employer against the correct amount of tax that should have been paid (based on the assumption that the period as a group employer is the only period for which the employer paid wages throughout the year). The second adjustment will adjust payroll tax paid for the period as an individual employer against the correct amount of tax that should have been paid (based on the assumption that the period as an individual employer is the only period for which the employer paid wages throughout the year). Any amount of payroll tax paid under this section is taken into account for the purposes of the annual adjustment of payroll tax.

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

If a person who did not pay and was not liable to pay taxable wages or interstate wages for any part of a financial year satisfies the commissioner that, because of the nature of the person’s trade or business, the taxable wages and interstate wages, if any, paid or payable by the person fluctuate with different periods of the financial year, the commissioner may determine that the person is to be treated for this division—

(a) if the person has conducted the trade or business in Australia during the whole of the financial year—as an employer who pays or is liable to pay taxable wages throughout the financial year; or

(b) if the person has conducted the trade or business in Australia during part only of the financial year—as an employer who pays or is liable to pay taxable wages throughout the part of the financial year.

The effect of a determination under this section is that when the correct amount of payroll tax is calculated (for a tax adjustment provided for by this division) the employer may receive the benefit of the payroll tax threshold for the period for which the employer is to be treated as paying wages, and not just for the period for which the employer actually pays wages. Without the determination, an employer may only receive the benefit of a proportion of the threshold amount that is equivalent to the proportion of the whole financial year for which the employer actually pays wages.

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(c) pay any tax that is payable in relation to the return because of division 2.3 (Liability to taxation—calculation of monthly payroll tax).

(4) The designated group employer for a group may, with the commissioner’s approval, lodge a joint return under this section covering stated members of the group, including the designated group employer.

(5) If a joint return is lodged and the return would, if lodged by a single employer, comply with this section, each of the employers covered by the return is taken to have complied with this section.

(b) pay any tax that is payable in relation to each return calculated in accordance with division 2.4 (Liability to taxation—calculation of payroll tax for financial year)—

(i) as if a reference in division 2.4 to a financial year (other than the reference in the definition of DFY) or year were a reference to the period as varied by the commissioner; and

(ii) with any necessary changes and any changes prescribed by regulation.

(aa) under section 3Q (1), refusing to determine that a person is not a member of a group; or

(ab) under section 3Q (6), revoking a determination that a person is not a member of a group; or

(1) This section applies to a liability to pay tax under the pre-amendment Acts.

(2) The pre-amendment Acts continue to apply to—

(a) the liability; and

(b) anything done to satisfy the liability.

(3) In this section:

pre-amendment Acts means each of the following Acts as in force at any time before the commencement of the Payroll Tax Amendment Act 2007:

(a) the Payroll Tax Act 1987;

(b) the Taxation Administration Act 1999.

(4) Subsection (1) and subsection (2) are laws to which the Legislation Act, section 88 (Repeal does not end effect of transitional laws etc) applies.

(5) This section expires 5 years after the day it commences.

In this schedule:

business journey means—

(a) a journey undertaken in a motor vehicle by a person otherwise than in the application of the vehicle to a private use, that is an application that, if the person is paid a motor vehicle allowance for the use, results in the provision of a fringe benefit (under the Fringe Benefits Tax Assessment Act 1986 (Cwlth)) by the employer; or

(b) a journey undertaken in a motor vehicle by a person in the course of producing assessable income of the person (under the Income Tax Assessment Act 1936 (Cwlth)).

If an employer selects the continuous recording method for calculating the number of business kilometres travelled during a financial year, the following details are required to be recorded by the employer:

(a) the odometer readings at the beginning and end of each business journey (relevant business journey) undertaken by the person during the financial year by means of a motor vehicle provided or maintained by the person;

(b) the specific purpose for which each relevant business journey was taken;

(c) the distance travelled by the person during the financial year in the course of all relevant business journeys (which is taken to be the number of business kilometres travelled during the financial year), calculated on the basis of the odometer readings mentioned in paragraph (a).

(1) If an employer selects the averaging method for calculating the number of business kilometres travelled during a financial year, the following details are required to be recorded by the employer:

(a) the odometer readings at the beginning and end of each business journey (relevant business journey) undertaken by the person during the relevant 12-week period by means of a motor vehicle provided or maintained by the person;

(b) the specific purpose for which each relevant business journey was taken;

(c) the distance travelled by the person during the relevant 12-week period in the course of all relevant business journeys, calculated on the basis of the odometer readings mentioned in paragraph (a);

(d) the odometer readings at the beginning and end of the relevant 12-week period for each motor vehicle (relevant motor vehicle) provided or maintained by the person for the purpose of undertaking business journeys;

(e) the distance travelled by each relevant vehicle during the relevant 12-week period, calculated on the basis of the odometer readings mentioned in paragraph (d);

(f) the distance travelled by the person in the course of business journeys undertaken by means of each relevant vehicle during the relevant 12-week period, calculated as a percentage of the distance travelled by the vehicle during the period (the relevant percentage);

(g) the odometer readings at the beginning and end of the financial year for each motor vehicle (relevant vehicle) provided or maintained by the person for the purpose of undertaking business journeys;

(h) the distance travelled by each relevant vehicle during the financial year, calculated on the basis of the odometer readings mentioned in paragraph (g);

(i) the distance travelled by the person in the course of business journeys undertaken by means of each relevant vehicle during the financial year (which is taken to be the number of business kilometres travelled during the financial year), calculated on the basis that the percentage of the distance that was travelled by the person in the course of business journeys undertaken by means of each relevant vehicle during the financial year is the same as the relevant percentage.

(2) For the next 4 financial years after the first financial year in which odometer details are recorded in accordance with subsection (1), an employer is not required to calculate the relevant percentage, or record the details mentioned in subsection (1) (a) to (f), for the person but is required to record the other details mentioned in subsection (1).

(3) Accordingly, for the next 4 financial years after the first financial year in which odometer details are recorded in accordance with subsection (1), the number of business kilometres travelled during the financial year is to be calculated (as mentioned in subsection (1) (i)) on the basis of the relevant percentage calculated for the first financial year.

(4) Despite subsection (2) and subsection (3), an employer is required to calculate the relevant percentage for a financial year, and record the details mentioned in subsection (1) (a) to (f), if—

(a) the commissioner serves a written notice on the employer before the commencement of a financial year during the 4-year period directing the employer to keep the details referred to in subsection (1) (a) to (f) for the financial year; or

(b) the employer wishes to use the recording method mentioned in this section for 1 or more additional motor vehicles used by the person in any financial year or for any other reason.

(5) In a situation mentioned in subsection (4), the new record for the financial year replaces the relevant percentage details previously recorded and subsections (2) and (3) apply in relation to the new record for the financial year as if it were the first financial year in which odometer details were recorded.

(6) An employer who has adopted and employed the method of recording mentioned in subsection (2) and subsection (3) for a person for 4 successive financial years must, in the next succeeding financial year, make a fresh recording of all the details stated in subsection (1) if the employer intends to continue to use the same method of recording for the person.

(7) Subsection (2) and subsection (3) apply in relation to the new record under subsection (6) for the financial year as if it were the first financial year in which odometer details were recorded.

(8) If the odometer of a motor vehicle is replaced or recalibrated during any period for which its readings are relevant for the purposes of this clause, the odometer readings immediately before and after the replacement or recalibration are to be recorded.

(1) For section 2.3, relevant 12-week period means a continuous period of at least 12 weeks, selected by the employer, throughout which a motor vehicle is provided or maintained by a person.

(2) If the motor vehicle is provided or maintained for less than 12 weeks, the period must be the entire period for which the motor vehicle is provided or maintained.

(3) The period may overlap the start or end of the financial year, as long as it includes part of the year.

(4) If the averaging method is used for 2 or more motor vehicles for the same financial year, the odometer readings for those motor vehicles must cover periods that are concurrent.

(1) In using the averaging method, an employer may nominate one motor vehicle as having replaced another motor vehicle with effect from a day stated in the nomination.

(2) After the nomination takes effect, the replacement motor vehicle is treated as the original motor vehicle, and the original motor vehicle is treated as a different motor vehicle.

(3) An employer need not repeat for the replacement vehicle the steps already taken for the original motor vehicle.

(4) An employer must record the nomination in writing in the financial year when the nomination takes effect.

(5) However, the commissioner may allow an employer to record the nomination at a later time.

(1) An employer may change from using the averaging method to using the continuous recording method with effect from the beginning of a financial year if the employer complies with section 2.2 for the financial year.

(2) An employer may change from using the continuous recording method to using the averaging method with effect from the beginning of a financial year if the employer complies with section 2.3 for the financial year.

• Corporations Act

• domestic partner (see s 169 (1))

• domestic partnership (see s 169 (2))

associated person, for division 1A.4 (Grouping of employers)—see section 3E.

business, for division 1A.4 (Grouping of employers)—see section 3E.

business journey, for schedule 2 (Motor vehicle allowances)—see section 2.1.

designated group employer means a member designated for a group under section 3R.

entity, for division 1A.4 (Grouping of employers)—see section 3E.

group, for division 1A.4 (Grouping of employers)—see section 3E.

group employer, for division 2.5 (Adjustments of tax)—see section 13.

individual employer, for division 2.5 (Adjustments of tax)—see section 13.

interstate wages means wages that are taxable wages under a corresponding law.

perform, in relation to services, includes render.

private company, for division 1A.4 (Grouping of employers)—see section 3E.

related person, for division 1A.4 (Grouping of employers)—see section 3E.

return period, in relation to an employer, means a period for which the employer must lodge a return under this Act.

value, of a benefit—see section 3A.

Note 1 The dictionary at the end of this Act defines certain terms used in this Act, and includes references (signpost definitions) to other terms defined elsewhere.

For example, the signpost definition ‘corporation—see the Corporations Act, section 57A.’ means that the term ‘corporation’ is defined in that section and the definition applies to this Act.

Presentation speech made in the Legislative Assembly on 2007.

Notified under the Legislation Act on 2007.

For the latest republication of amended laws, see www.legislation.act.gov.au.