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This is a Bill, not an Act. For current law, see the Acts databases.
South Australia
Pay-roll Tax (Harmonisation Project) Amendment
Bill 2008
A BILL FOR
An Act to amend the Pay-roll Tax Act 1971.
Contents
Part 1—Preliminary
1 Short
title
2 Commencement
3 Amendment provisions
Part 2—Amendment of Pay-roll Tax
Act 1971
4 Amendment of
section 3—Interpretation
5 Amendment of section 8—Wages
liable to pay-roll tax
6 Amendment of
section 12—Exemptions
7 Substitution of sections 18A to
18D
Division
1—Interpretation
18A Interpretation
Division 2—Business groups
18B Constitution of
groups
18C Groups of
corporations
18D Groups arising from the use of common
employees
18DA Groups of commonly controlled
businesses
18DB Groups arising from tracing of
interests in corporations
Division 3—Business groups—tracing of interests in
corporations
18DC Application
18DD Direct
interest
18DE Indirect
interest
18DF Aggregation of
interests
8 Insertion of heading
9 Repeal of
section 18H
10 Substitution of
section 18I
18I Exclusion of persons from
groups
11 Insertion of Schedules 1 and 2
Schedule 1—Motor vehicle and accommodation allowances
Division 1—Motor vehicle allowances
1 Motor vehicle
allowances—general
2 Continuous recording
method
3 Averaging
method
4 Meaning of relevant 12-week
period
5 Replacing 1 motor vehicle with another motor
vehicle
6 Changing method of
recording
7 Definition
Division 2—Accommodation allowances
8 Accommodation
allowances
Schedule 2—Shares and
options
1 Preliminary
2 Choice of
relevant day
3 Deemed choice of relevant day in special
cases
4 Effect of rescission, cancellation of share or
option
5 Grant of share pursuant to exercise of
option
6 Value of shares and
options
7 Inclusion of shares and options granted to
directors as wages
8 When services considered to have
been performed
9 Place where wages are
payable
The Parliament of South Australia enacts as
follows:
This Act may be cited as the Pay-roll Tax (Harmonisation Project)
Amendment Act 2008.
This Act will come into operation on 1 July 2008.
In this Act, a provision under a heading referring to the amendment of a
specified Act amends the Act so specified.
Part 2—Amendment
of Pay-roll Tax
Act 1971
4—Amendment of
section 3—Interpretation
(1) Section 3(1), definition of council—delete
the definition and substitute:
council means a council or council subsidiary under the
Local Government Act 1999;
(2) Section 3(1), definition of eligible termination
payment—delete the definition
(3) Section 3(1)—after the definition of employer
insert:
employment termination payment means—
(a) an employment termination payment within the meaning of
section 82-130 of the ITAA; or
(b) a payment that would be an employment termination payment within the
meaning of section 82-130 of the ITAA but for the fact that it was received
later than 12 months after the termination of a person's employment;
or
(c) a transitional termination payment within the meaning of
section 82-10 of the Income Tax (Transitional Provisions) Act 1997
of the Commonwealth;
FBTA Act means the Fringe Benefits Tax Assessment Act
1986 of the Commonwealth;
(4) Section 3(1), definition of fringe
benefit—delete "Fringe Benefits Tax Assessment
Act 1986 of the Commonwealth" and substitute:
FBTA Act
(5) Section 3(1), definition of group—delete the
definition and substitute:
group has the meaning given by section 18A;
(6) Section 3(1)—after the definition of interstate
wages insert:
ITAA means the Income Tax Assessment Act 1997 of the
Commonwealth;
option means an option or right, whether actual, prospective
or contingent, of a person to acquire a share or to have a share transferred or
allotted to the person;
(7) Section 3(1)—after the definition of return
period insert:
share means a share in a company and includes a stapled
security within the meaning of section 139GCD of the Income Tax
Assessment Act 1936 of the Commonwealth;
(8) Section 3(1)—after the definition of taxable
wages insert:
termination payment means—
(a) a payment made in consequence of the retirement from, or termination
of, any office or employment of an employee, being—
(i) an unused annual leave payment; or
(ii) an unused long service leave payment; or
(iii) so much of an employment termination payment paid or payable by an
employer, whether or not paid to the employee or to any other person or body,
that would be included in the assessable income of an employee under
Part 2-40 of the ITAA if the whole of the employment termination payment
had been paid to the employee; or
(b) an amount paid or payable by a company as a consequence of the
termination of the services or office of a director of the company, whether or
not paid to the director or to any other person or body, that would be an
employment termination payment if that amount had been paid or payable as a
consequence of termination of employment; or
(c) an amount paid or payable by a person who is an employer under a
service contract within the meaning of section 4 as a consequence of the
termination of the supply of the services of an employee under the contract,
whether or not paid to the employee or to any other person, if the amount would
be an employment termination payment if that amount had been paid or payable as
a consequence of termination of employment;
(9) Section 3(1)—after the definition of unfunded scheme
of superannuation insert:
unused annual leave payment has the same meaning as in
section 83-10 of the ITAA;
unused long service leave payment has the same meaning as in
section 83-75 of the ITAA;
(10) Section 3(1a)—delete subsection (1a) and
substitute:
(1a) Schedule 1 has effect with respect to motor vehicle allowances and
accommodation allowances.
(11) Section 3(1ab)—delete subsection (1ab) and
substitute:
(1ab) Wages include a termination payment.
(12) Section 3(1c)—delete subsection (1c) and
substitute:
(1c) For the purposes of this Act, the value of taxable wages comprising a
fringe benefit is to be determined in accordance with the following
formula:
Where
VTW is the value of the taxable wages
TV is the value that would be the taxable value of the
benefit as a fringe benefit for the purposes of the FBTA Act
FBT rate is the rate of fringe benefits tax imposed by the
FBTA Act that applies when the liability to payroll tax under this Act
arises.
(13) Section 3—after subsection (3b) insert:
(3c) For the purposes of—
(a) the operation of the definition of superannuation
benefit; and
(b) the operation of subsections (2a) to (3b) (inclusive),
a reference to an employee will be taken to include a reference to a
director or member of the governing body of a company to whom, by virtue of a
paragraph of the definition of wages, an amount paid or payable in
the circumstances referred to in that paragraph constitutes wages (and the
company will be taken to be the employer).
(3d) Wages include the grant of a share or option to an employee by an
employer in respect of services performed by the employee.
(3e) Schedule 2 has effect for the purposes of
subsection (3d).
5—Amendment of
section 8—Wages liable to pay-roll tax
Section 8(1a)(a)(ii)—delete subparagraph (ii) and
substitute:
(ii) the wages relate, in their entirety, to services performed by a
person wholly in another country for a continuous period of more than
6 months beginning on the day on which wages were first paid or payable to
that person for services so performed; or
6—Amendment of
section 12—Exemptions
(1) Section 12(1)—after paragraph (cb) insert:
(cc) by a non-profit organisation having wholly charitable objects during
a period in respect of which the organisation satisfies the Commissioner that
the person is engaged exclusively in work of a kind ordinarily performed in
connection with the charitable objects of the organisation, but not so as to
include under this paragraph an organisation that is a school, a college, an
educational institution, an educational company or an instrumentality of the
State; or
(2) Section 12(1)(db)—delete paragraph (db) and
substitute:
(db) to an Aboriginal person who is employed under an employment project
under the Community Development Employment Project funded by the Department of
Employment and Workplace Relations of the Commonwealth or the Torres Strait
Regional Authority; or
(3) Section 12(1)—after paragraph (l) insert:
or
(m) to an employee in respect of any period when he or she was engaged as
a volunteer member of an emergency services organisation under the Fire and
Emergency Services Act 2005 in responding to any situation that
involved or may have involved an emergency under that Act, but not so as to
include under this paragraph wages paid or payable as recreation leave, annual
leave, long service leave or sick leave; or
(n) to an employee in respect of—
(i) maternity leave, being leave given to a female employee in connection
with her pregnancy or the birth of the child; or
(ii) adoption leave, being leave given to an employee in connection with
the adoption of a child by him or her,
but not so as to include under this paragraph—
(iii) leave taken as sick leave, recreation leave, annual leave or similar
leave; or
(iv) wages paid or payable in respect of maternity or adoption leave that
comprise fringe benefits; or
(v) wages paid or payable after 14 weeks maternity leave in respect
of any 1 pregnancy or after 14 weeks adoption leave in respect of
any 1 adoption.
(4) Section 12—after subsection (1) insert:
(2) For the purposes of subsection (1)(cc), an educational
company is a company—
(a) in which an educational institution has a controlling interest;
and
(b) that provides, promotes or supports the educational services of that
institution.
(3) For the purposes of subsection (2), an educational institution
has a controlling interest in an educational company
if—
(a) members of the board of management of the company who are entitled to
exercise a majority in voting power at meetings of the board of management are
accustomed or under an obligation, whether formal or informal, to act in
accordance with the directions, instructions or wishes of the educational
institution; or
(b) the educational institution may (whether directly or indirectly)
exercise, control the exercise of, or substantially influence the exercise of,
more than 50% of the voting power attached to voting shares, or any class
of voting shares, issued by the company; or
(c) the educational institution has power to appoint more than 50% of the
members of the board of management of the company.
(4) For the avoidance of doubt, a reference in subsection (1)(n)(v)
to a period of 14 weeks leave is a reference to—
(a) a period that is the equivalent of 14 weeks leave on full pay, in
the case of full-time employees who take leave on less than full pay;
or
(b) a period of 14 weeks leave at part-time rates of pay, in the case
of a part-time employees.
(5) An employer—
(a) wishing to claim an exemption under subsection (1)(n) in respect
of maternity leave must obtain and keep a medical certificate in respect of, or
statutory declaration by, the employee—
(i) stating that the employee is or was pregnant; or
(ii) stating that the employee has given birth and the date of birth;
or
(b) wishing to claim an exemption under subsection (1)(n) in respect
of adoption leave must obtain and keep a statutory declaration by the
employee—
(i) that a child has been placed in the custody of the employee pending
the making of an adoption order; or
(ii) that an adoption order has been made or recognised in favour of the
employee.
(5) Section 12(6)—before the definition of health
service insert:
educational institution means an entity that provides
education above secondary level;
7—Substitution of
sections 18A to 18D
Sections 18A to 18D (inclusive)—delete the sections and
substitute:
Division 1—Interpretation
18A—Interpretation
In this Part—
business includes—
(a) a profession or trade; and
(b) any other activity carried on for fee, gain or reward; and
(c) the activity of employing 1 or more persons who perform duties for or
in connection with another business; and
(d) the carrying on of a trust (including a dormant trust); and
(e) the activity of holding any money or property used for or in
connection with another business,
whether carried on by 1 person or 2 or more persons together;
group means a group constituted under this Part, but does not
include any member of the group in respect of whom a determination under
section 18I is in force.
Division 2—Business groups
18B—Constitution of groups
A group is constituted by all the persons or bodies forming a
group that is not a part of any larger group.
18C—Groups of corporations
(1) Corporations constitute a group if they are related bodies corporate
by reason of section 50 of the Corporations Act 2001 of the
Commonwealth.
(2) For the purpose of assessing whether corporations are related bodies
corporate under that Act, they are taken to carry on a business and not to be
trustee companies.
Note—
Section 18I allows the Commissioner, for pay-roll tax purposes, to
exclude persons from a group constituted under this section in certain
circumstances but not in the case of corporations that are related bodies
corporate.
18D—Groups arising from the use of common
employees
(1) If 1 or more employees of an employer perform duties for or in
connection with 1 or more businesses carried on by the employer and
1 or more other persons, the employer and each of those other persons
constitute a group.
(2) If 1 or more employees of an employer are employed solely or
mainly to perform duties for or in connection with 1 or more businesses carried
on by 1 or more other persons, the employer and each of those other persons
constitute a group.
(3) If 1 or more employees of an employer perform duties for or in
connection with 1 or more businesses carried on by 1 or more other persons,
being duties 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 those other persons in connection with that
business or those businesses, the employer and each of those other persons
constitute 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 specifies the duties to be performed
by them.
Note—
Section 18I allows the Commissioner, for pay-roll tax purposes, to
exclude persons from a group constituted under this section in certain
circumstances.
18DA—Groups of commonly controlled
businesses
(1) If a person or set of persons has a controlling interest in each of
2 businesses, the persons who carry on those businesses constitute a
group.
Note—
Section 18I allows the Commissioner, for pay-roll tax purposes, to
exclude persons from a group constituted under this section in certain
circumstances.
(2) For the purposes of this section, a person or set of persons has a
controlling interest in a business if—
(a) in the case of 1 person—the person is the sole owner (whether or
not as trustee) of the business; or
(b) in the case of a set of persons—the persons are together the
owners (whether or not as trustees) of the business; or
(c) in the case of a business carried on by a corporation—
(i) the person or each of the set of persons is a director of the
corporation and the person or set of persons 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 that person or set of
persons; or
(d) in the case of a business carried on by a body corporate or
unincorporated—that person or set of persons constitute more than 50% of
the board of management (by whatever name called) of the body or control the
composition of that board; or
(e) in the case of a business carried on by a corporation that has a share
capital—that person or set of persons 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; or
(f) in the case of a business carried on by a partnership—that
person or set of persons—
(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; or
(g) in the case of a business carried on under a trust—the person or
set of persons (whether or not as a trustee of, or beneficiary under, another
trust) is the beneficiary in respect of more than 50% of the value of the
interests in the first-mentioned trust.
(3) If—
(a) 2 corporations are related bodies corporate within the meaning of the
Corporations Act 2001 of the Commonwealth; 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 persons has a controlling interest in a business;
and
(b) a person or set of persons who carry on the business has a controlling
interest in another business,
the person or set of persons referred to in paragraph (a) has a
controlling interest in that other business.
(5) If—
(a) a person or set of persons is the beneficiary of a trust in respect 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 persons has a controlling interest in the
business.
(6) A person who may benefit from a discretionary trust as a result of the
trustee or another person, or the trustee and another person, exercising or
failing to exercise a power or discretion, is taken, for the purposes of this
Part, to be a beneficiary in respect of more than 50% of the value of the
interests in the trust.
(7) If—
(a) a person or set of persons 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 persons is taken to have a controlling interest in the
business of the corporation.
(8) If—
(a) a person or set of persons 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 persons is taken to have a controlling interest in the
business of the partnership.
18DB—Groups arising from tracing of interests in
corporations
(1) An entity and a corporation form part of a group if the entity has a
controlling interest in the corporation.
Note—
Section 18I allows the Commissioner, for pay-roll tax purposes, to exclude
persons from a group constituted under this section in certain
circumstances.
(2) For the purposes of 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
that direct interest exceeds 50%; or
(b) the entity has an indirect interest in the corporation and the value
of that 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) Division 3 applies for the purposes of the interpretation of this
section.
Note—
Division 3 sets out the manner for determining whether an entity has a
direct interest, indirect interest or aggregate interest in a corporation, and
the value of such an interest.
(4) In this section—
associated person means a person who is associated with
another person in accordance with any of the following
provisions—
(a) persons are associated persons if they are related persons;
(b) natural persons are associated persons if they are partners in a
partnership;
(c) private companies are associated persons if common shareholders have a
majority interest in each private company;
(d) trustees are associated persons 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 persons if a related
body corporate of the company (within the meaning of the Corporations Act
2001 of the Commonwealth) is a beneficiary of the trust (not including a
public unit trust scheme) of which the trustee is a trustee;
domestic partner means a person who is a domestic partner
within the meaning of the Family Relationships Act 1975, whether
declared as such under that Act or not;
entity means—
(a) a person; or
(b) 2 or more persons who are associated persons (as defined in this
section);
private company means a company that is not limited by
shares, or whose shares are not quoted on the Australian Stock Exchange or any
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) natural persons are related persons if—
(i) 1 is the spouse or domestic partner of the other; or
(ii) the relationship between them is that of parent and child, brothers,
sisters, or brother and sister;
(b) private companies are related persons if they are related bodies
corporate within the meaning of the Corporations Act 2001 of the
Commonwealth;
(c) a natural person and a private company are related persons if the
natural person is a majority shareholder or director of the company or of
another private company that is a related body corporate of the company within
the meaning of the Corporations Act 2001 of the
Commonwealth;
(d) a natural person and a trustee are related persons if the natural
person is a beneficiary of the trust (not being a public unit trust scheme) of
which the trustee is a trustee;
(e) a private company and a trustee are related persons if the company, or
a majority shareholder or director of the company, is a beneficiary of the trust
(not being a public unit trust scheme) of which the trustee is a
trustee.
Division 3—Business groups—tracing of
interests in corporations
18DC—Application
This Division applies for the purposes of section 18DB.
18DD—Direct interest
(1) An entity has a direct interest in a corporation if—
(a) in the case of 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 shares issued
by the corporation; or
(b) in the case of an entity that is 2 or more persons who are associated
persons—each of the associated persons can, directly or indirectly,
exercise, control the exercise of, or substantially influence the exercise of,
the voting power attached to any voting shares 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) in the case of an entity that is a person—the person can
directly or indirectly exercise, control the exercise of, or substantially
influence the exercise of, as referred to in subsection (1); or
(b) in the case of an entity that is 2 or more persons who are associated
persons—the associated persons can, if acting together, directly or
indirectly exercise, control the exercise of, or substantially influence the
exercise of, as referred to in subsection (1).
18DE—Indirect interest
(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.
Examples—
The following are examples of how subsections (1) and (2) work (the
examples are cumulative):
1 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.
2 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.
3 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.
(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.
Examples—
The following are examples of how subsection (3) works (the examples
are cumulative):
1 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% x 70% (that
is, 56%). Accordingly, in this example the entity has a controlling interest
(within the meaning of section 18DA) in corporation B.
2 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% x 70% x 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, which may occur if the corporation is linked to more
than 1 corporation in which the entity has a direct interest, or 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.
(5) In a case where subsection (4) applies, the entity has an
aggregate interest in the corporation—see section 18DF.
18DF—Aggregation of interests
(1) An entity has an aggregate interest in a corporation
if—
(a) the entity has a direct interest and 1 or more indirect interests in
the corporation; or
(b) the entity has more than 1 indirect interest in the
corporation.
(2) The value of the aggregate interest of an entity in a corporation is
the sum of 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.
Example—
(a) an entity has a direct interest (with a value of 40%) in corporation
B;
(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%));
(c) the value of the entity's aggregate interest in corporation B is the
sum of the direct interest (40%) and the indirect interest (15%), which is
55%;
(d) accordingly, in this example, the entity has a controlling interest in
corporation B (within the meaning of section 18DB).
Before section 18E insert:
Division 4—Other matters
Section 18H—delete the section
10—Substitution of
section 18I
Section 18I—delete the section and substitute:
18I—Exclusion of persons from
groups
(1) The Commissioner may, by order in writing, 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 only make such a determination 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 that group.
(3) The Commissioner cannot exclude a person from a group if the person is
a body corporate that, by reason of section 50 of the Corporations
Act 2001 of the Commonwealth, is related to another body corporate that
is a member of that group.
(4) This section extends to a group constituted by reason of
section 18F.
(5) A determination can be expressed to take effect on a date that is
earlier than the date of the determination.
(6) The Commissioner may by order in writing revoke a determination that
applies in respect of a person if satisfied that the circumstances in which a
determination may be made do not apply to the person.
(7) The revocation of a determination can be expressed to take effect on a
date that is earlier than the date of the determination.
11—Insertion of
Schedules 1 and 2
After section 35 insert:
Schedule 1—Motor vehicle and accommodation
allowances
Division 1—Motor vehicle
allowances
1—Motor vehicle
allowances—general
(1) For the purposes of this Act, wages, in respect of a
financial year, do not include the exempt component of a motor vehicle allowance
paid or payable in respect of that year.
(2) Accordingly, if the total motor vehicle allowance paid or payable to
an employee in respect of a financial year does not exceed the exempt component,
the motor vehicle allowance is not wages for the purposes of this
Act.
(3) If the total motor vehicle allowance paid or payable to an employee in
respect of a financial year exceeds the exempt component (if any), only that
amount that exceeds the exempt component of the motor vehicle allowance is
included as wages for the purposes of this Act.
(4) The exempt component of a motor vehicle allowance paid
or payable in respect of a financial year is calculated in accordance with the
following formula:
E = K x R
Where
E is the exempt component
K is the number of business kilometres travelled during the
financial year
R is the exempt rate.
(5) The number of business kilometres travelled during the financial
year ("K") is to be determined in accordance with the continuous
recording method, or the averaging method, whichever method is selected and used
by the employer in accordance with the succeeding clauses of this
Division.
(6) The Commissioner, by notice in writing, may approve the use, by an
employer or class of employer, of another method of determining the number of
business kilometres travelled during the financial year (including the use of an
estimate).
(7) If the Commissioner acts under subclause (6), the number of
business kilometres travelled during the financial year is to be determined in
accordance with the method approved by the Commissioner.
(8) For the purposes of this clause, the exempt rate for the
financial year concerned is—
(a) the rate prescribed by the regulations under section 28-25 of the ITAA
for calculating a deduction for car expenses for a large car using the "cents
per kilometre method" in the financial year immediately preceding the financial
year in which the allowance is paid or payable; or
(b) if no rate referred to in paragraph (a) is prescribed, the rate
prescribed by the regulations under this Act.
2—Continuous recording method
If an employer selects the continuous recording method for the purposes of
determining the number of business kilometres travelled during the 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 undertaken by the person during a financial year by means of a motor
vehicle provided or maintained by the person;
(b) the specific purpose for which each such business journey was
taken;
(c) the distance travelled by the person during the financial year in the
course of all such 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 referred to in paragraph (a).
3—Averaging method
(1) If an employer selects the averaging method for the purposes of
determining the number of business kilometres travelled during the 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 undertaken by the person during the relevant 12-week period by means of
a motor vehicle provided or maintained by the person;
Note—
Clause 4 defines the relevant 12-week period.
(b) the specific purpose for which each such business journey was
taken;
(c) the distance travelled by the person during the relevant 12-week
period in the course of all such business journeys, calculated on the basis of
the odometer readings referred to in paragraph (a);
(d) the odometer readings at the beginning and end of the relevant 12-week
period for each motor vehicle provided or maintained by the person for the
purpose of undertaking business journeys;
(e) the distance travelled by each such vehicle during the relevant
12-week period, calculated on the basis of the odometer readings referred to in
paragraph (d);
(f) the distance travelled by the person in the course of business
journeys undertaken by means of each such vehicle during the relevant 12-week
period, calculated as a percentage of the distance travelled by that vehicle
during that period (the relevant percentage);
(g) the odometer readings at the beginning and end of the financial year
for each vehicle provided or maintained by the person for the purpose of
undertaking business journeys;
(h) the distance travelled by each such vehicle during the financial year,
calculated on the basis of the odometer readings referred to in
paragraph (g);
(i) the distance travelled by the person in the course of business
journeys undertaken by means of each such 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 that
distance that was travelled by the person in the course of business journeys
undertaken by means of each such vehicle during the financial year is the same
as the relevant percentage.
(2) For the next succeeding 4 financial years after the first financial
year in which odometer details are recorded in accordance with
subclause (1), an employer is not required to calculate the relevant
percentage, or record the details referred to in subclause (1)(a)-(f), for
the person but is required to record the other details referred to in that
subclause.
(3) Accordingly, for the next succeeding 4 financial years after the first
financial year in which odometer details are recorded in accordance with
subclause (1), the number of business kilometres travelled during the
financial year is to be calculated (as referred to in subclause (1)(i)) on
the basis of the relevant percentage calculated for the first financial
year.
(4) Despite subclauses (2) and (3), an employer is required to
calculate the relevant percentage for a financial year, and record the details
referred to in subclause (1)(a)-(f), if—
(a) the Commissioner serves a notice on the employer before the
commencement of a financial year during that period directing the employer to
keep the details referred to in subclause (1)(a)–(f) for that
financial year; or
(b) the employer wishes to use the recording method referred to in this
clause for one or more additional motor vehicles used by the person in any
financial year or for any other reason.
(5) In a situation referred to in subclause (4), the new record for
the financial year replaces the relevant percentage details previously recorded
and subclauses (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
referred to in subclauses (2) and (3) for a person for 4 successive
financial years must, in the next succeeding financial year, make a fresh
recording of all the details specified in subclause (1) if the employer
intends to continue to use the same method of recording for the person and
subclauses (2) and (3) then 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.
(7) 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.
4—Meaning of relevant 12-week
period
(1) In clause 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 and 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.
(2) The period may overlap the start or end of the financial year, so long
as it includes part of the year.
(3) 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.
5—Replacing 1 motor vehicle with another motor
vehicle
(1) For the purposes of using the averaging method, an employer may
nominate 1 motor vehicle as having replaced another motor vehicle with
effect from a day specified 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 in which the nomination takes effect.
(5) However, the Commissioner may allow an employer to record the
nomination at a later time.
6—Changing method of recording
(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 clause 2 in respect of 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 clause 3 in respect of the financial
year.
7—Definition
In this Division—
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, being an application that, if
the person is paid a motor vehicle allowance for that use, results in the
provision of a fringe benefit (within the meaning of the FBTA Act) 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 (within the meaning of the Income
Tax Assessment Act 1936 of the Commonwealth).
Division 2—Accommodation
allowances
8—Accommodation allowances
(1) For the purposes of this Act, wages do not include an
accommodation allowance paid or payable to an employee in respect of 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 in
respect of a night's absence from the person's usual place of residence exceeds
the exempt rate, wages include that allowance only to the extent
that it exceeds the exempt rate.
(3) For the purposes of this clause, the exempt rate for the
financial year concerned is—
(a) 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; or
(b) if no determination referred to in paragraph (a) is in force, the
rate prescribed by the regulations.
Schedule 2—Shares and options
1—Preliminary
(1) Any wages constituted by a share or option under section 3(3d)
are taken, for the purposes of the imposition of pay-roll tax, to be paid or
payable on the relevant day.
(2) For the purposes of this Schedule, the relevant day is
the day that the employer elects in accordance with this Schedule to treat as
the day on which the wages are paid or payable.
2—Choice of relevant day
(1) The employer can elect to treat as the relevant day
either the date on which the share or option is granted to the employee or the
vesting date.
(2) A share or option is granted to a person in the following
circumstances—
(a) in the case of a share—if the person acquires the share (within
the meaning of section 139G of the Income Tax Assessment Act 1936 of
the Commonwealth) or in the circumstances prescribed by the regulations under
this Act;
(b) in the case of an option—if the person acquires a right (within
the meaning of section 139G of the Income Tax Assessment Act 1936 of
the Commonwealth) to the share to which the option relates or in the
circumstances prescribed by the regulations under this Act.
(3) The vesting date in respect of a share is the date on
which the share vests in the employee (that is, when any conditions applying to
the grant of the share have been met and the employee's legal or beneficial
interest in the share cannot be rescinded).
(4) The vesting date in respect of an option is 1 of the
following dates (whichever happens first):
(a) the date on which the share to which the option relates is granted to
the employee;
(b) the date on which the employee exercises a right under the option to
have the share the subject of the option transferred to, allotted to or vest in
him or her.
3—Deemed choice of relevant day in special
cases
(1) If an employer grants a share or an option to an employee and the
value of the grant of the share or option is not included in the taxable wages
of the employer for the financial year in which the share or option was granted,
the employer is taken to have elected to treat the wages constituted by the
grant of that share or option as being paid or payable on the vesting
date.
(2) If an employer grants a share or an option to an employee and the
value of the grant of the share or option is nil or, if the employer were to
elect to treat the date of grant as the relevant day, the wages constituted by
the grant would not be liable to pay-roll tax, the employer is taken to have
elected to treat the wages constituted by the grant of that share or option as
being paid or payable on the date on which the share or option was
granted.
4—Effect of rescission, cancellation of share or
option
(1) If the grant of a share or option is withdrawn, cancelled or exchanged
before the vesting date for any valuable consideration (other than the grant of
other shares or options), the following provisions apply:
(a) the date of withdrawal, cancellation or exchange is taken to be the
vesting date of the share or option;
(b) the market value of the share or option, on the vesting date, is taken
to be the amount of the valuable consideration (and, accordingly, that amount is
the amount paid or payable as wages on that date).
(2) If an employer includes the value of a grant of a share or option in
the taxable wages of the employer for a financial year and the grant is
rescinded because the conditions attaching to the grant were not met, the
taxable wages of the employer, in the financial year in which the grant is
rescinded, are to be reduced by the value of the grant as previously included in
the taxable wages of the employer.
(3) Subclause (2) does not apply just because an employee fails to
exercise an option or to otherwise exercise his or her rights in respect of a
share or option.
5—Grant of share pursuant to exercise of
option
The grant of the share by an employer does not constitute wages for the
purposes of this Act if the employer is required to grant the share as a
consequence of the exercise of an option by a person and—
(a) the grant of the option to the person constitutes wages for the
purposes of this Act; or
(b) the option was granted to the person before
1 July 2008.
6—Value of shares and options
(1) If the grant of a share or option constitutes wages under this Act,
the amount paid or payable as wages is taken, for the purposes of this Act, to
be the market value of the share or option (expressed in Australian currency) on
the relevant day, less the consideration (if any) paid or given by the employee
in respect of the share or option (other than consideration in the form of
services performed).
(2) The market value of a share or option on the relevant day is to be
determined in accordance with the Commonwealth income tax provisions.
(3) For that purpose, the Commonwealth income tax provisions apply with
the following modifications, and any other necessary modifications:
(a) the market value of an option is to be determined as if it were a
right to acquire a share;
(b) a reference to a taxpayer is to be read as a reference to the
employee;
(c) a reference to the Commissioner of Taxation is to be read as a
reference to either that Commissioner or the Commissioner of State
Taxation.
(4) Section 3(1c) does not apply to the grant of a share or option
that constitutes wages, even if it constitutes a fringe benefit.
(5) In this clause—
Commonwealth income tax provisions means the provisions of
Subdivision F of Division 13A of Part III of the Income Tax
Assessment Act 1936 of the Commonwealth.
7—Inclusion of shares and options granted to
directors as wages
(1) For the purposes of this Act, wages include the grant of a share, or
option, by a company to a director of the company by way of remuneration for the
appointment or services of the director that would be wages under this Act if
the director were an employee of the company.
(2) For that purpose, the other provisions of this Schedule apply in
respect of any such grant as if a reference to the employer were a reference to
the company and a reference to the employee were a reference to the director of
the company.
(3) In this clause, a reference to a director of the company includes a
reference to the following:
(a) a person who, under a contract or other arrangement, is to be
appointed as a director of the company;
(b) a former director of the company.
(4) In the case of wages constituted by the grant of a share or option by
a company to a director of the company by way of remuneration for the
appointment of the director, but not for services performed—
(a) the grant of the share or option is taken, for the purposes of this
Act, to be paid or payable for services performed during the month in which the
relevant day occurs; and
(b) a reference in this Act to the place or places where services are
performed is a reference to the place or places where it may reasonably be
expected that the services of the director in respect of the company will be
performed.
8—When services considered to have been
performed
For the purposes of this Act, if the grant of a share or an option
constitutes wages for the purposes of this Act, the services in respect of which
those wages are paid or payable are taken to have been performed during the
month in which the relevant day occurs.
9—Place where wages are
payable
(1) The wages constituted by the grant of the share or option are taken to
be paid or payable in this State if the share is a share in a local company or,
in the case of an option, an option to acquire shares in a local
company.
(2) In any other case, the wages constituted by the grant of the share or
option are taken to be paid or payable outside this State.
Note—
If the wages concerned are taken to be payable outside this State, because
the shares concerned are shares in a company that is not a local company, the
grant of the share or option may still be liable to pay-roll tax under this Act
if the grant is made for services performed or rendered wholly or mainly in this
State (see section 8).
(3) In this clause—
local company means—
(a) a company incorporated or taken to be incorporated under the
Corporations Act 2001 of the Commonwealth that is taken to be
registered in this State for the purposes of that Act; or
(b) any other body corporate that is incorporated under an Act of this
State.