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STATE TAXATION ACTS FURTHER AMENDMENT BILL 2009

                 PARLIAMENT OF VICTORIA

 State Taxation Acts Further Amendment Bill 2009



                       TABLE OF PROVISIONS
Clause                                                                      Page

PART 1--PRELIMINARY                                                            1
  1      Purpose                                                               1
  2      Commencement                                                          2

PART 2--FIRST HOME OWNER GRANT ACT 2000                                        4
  3      Eligible transaction                                                  4

PART 3--LAND TAX ACT 2005                                                      6
Division 1--Amendment relating to implied or constructive trusts               6
  4      Definitions                                                           6
  5      New Division 2B inserted                                              6
         Division 2B--Land held on implied or constructive trust               6
         46L      Land held on implied or constructive trust                   6
         46M      Trustee's right to reimbursement under implied trust or
                  constructive trust                                           7
Division 2--General amendments                                                 7
  6      Who is the owner of land?                                             7
  7      New section 16A                                                       8
         16A      Transfer of land for no consideration                        8
  8      Certain long-term lessees of private land                             9
  9      General land tax surcharge for trusts                                 9
  10     Land tax for PPR land if nominated PPR beneficiary                   10
  11     Unoccupied land subsequently used as principal residence             10
  12     Crown land                                                           10
  13     New heading to Division 1 of Part 7                                  11
  14     New section 104A                                                     11
         104A Notice of errors in notice of assessment of land tax            11




561372B.I-14/10/2009                   i      BILL LA INTRODUCTION 14/10/2009

 


 

Clause Page PART 4--PAYROLL TAX ACT 2007 12 15 Definitions 12 16 Taxable wages--New sections 10 to 11C 12 10 What are taxable wages? 12 11 Wages that are taxable in this jurisdiction 13 11A Jurisdiction in which employee is based 16 11B Jurisdiction in which employer is based 17 11C Place and date of payment of wages 18 17 What are wages? 20 18 Inclusion of shares and options granted to directors as wages 20 19 Repeal of section 25 20 20 Place where wages are payable 20 21 Part 4 Exemptions 21 Division 9--Services outside Australia 21 66A Wages paid or payable for or in relation to services performed in other countries 21 22 Transitional provisions 21 16 Application of amendments 21 PART 5--TAXATION ADMINISTRATION ACT 1997 23 Division 1--Amendments relating to recognised jurisdictions 23 23 Purpose 23 24 Definitions 23 25 Meaning of taxation laws 24 26 Relationship with other taxation laws 24 27 Searches without a warrant 24 28 New Division 2A inserted in Part 9 24 Division 2A--Investigations for the purposes of recognised laws 24 90A Investigations by and on behalf of corresponding Commissioner 24 90B Exercise of functions under Division 2 25 90C Transfer of documents or things seized under investigations for recognised jurisdiction 26 90D Investigations by Commissioner in another jurisdiction 27 90E Certificate of authority 27 29 Disclosures to a recognised jurisdiction and national regulators 28 Division 2--Amendments relating to notification defaults 28 30 Definitions 28 31 Penalty tax for notification defaults 29 32 Amount of penalty tax for notification default 29 33 Reduction in penalty tax 30 561372B.I-14/10/2009 ii BILL LA INTRODUCTION 14/10/2009

 


 

Clause Page 34 Increase in penalty tax for concealment 30 35 New clause inserted in Schedule 1 31 17 Penalty tax for notification defaults 31 Division 3--General amendments 31 36 Permitted disclosures to particular persons 31 37 Service of process by Commissioner 32 PART 6--REPEAL AND CONSEQUENTIAL AMENDMENTS 33 38 Repeal of Taxation (Reciprocal Powers) Act 1987 33 39 Consequential amendment to Accident Compensation Act 1985 33 40 Consequential amendment to Business Franchise (Tobacco) Act 1974 33 41 Consequential amendment to Unclaimed Money Act 2008 34 PART 7--REPEAL OF AMENDING ACT 35 42 Repeal of amending Act 35 ENDNOTES 36 561372B.I-14/10/2009 iii BILL LA INTRODUCTION 14/10/2009

 


 

PARLIAMENT OF VICTORIA Introduced in the Assembly State Taxation Acts Further Amendment Bill 2009 A Bill for an Act to amend the First Home Owner Grant Act 2000, the Land Tax Act 2005, the Payroll Tax Act 2007 and the Taxation Administration Act 1997 and to make consequential amendments to other Acts, to repeal the Taxation (Reciprocal Powers) Act 1987 and for other purposes. The Parliament of Victoria enacts: PART 1--PRELIMINARY 1 Purpose The main purposes of this Act are-- (a) to amend the First Home Owner Grant Act 5 2000 to impose a cap on the value of certain transactions that will be eligible for the First Home Owner Grant; and 561372B.I-14/10/2009 1 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 1--Preliminary s. 2 (b) to amend the Land Tax Act 2005 in relation to-- (i) leases of Crown land; and (ii) trusts; and 5 (iii) disposals of land for no consideration; and (iv) notification of errors in assessment notices; and (c) to amend the Payroll Tax Act 2007 to 10 clarify when wages are taxable in this jurisdiction; and (d) to amend the Taxation Administration Act 1997-- (i) to re-enact and modernise the law 15 relating to the reciprocal enforcement of taxation laws; and (ii) to provide for penalties for notification defaults; and (iii) to otherwise improve the operation of 20 that Act; and (e) to repeal the Taxation (Reciprocal Powers) Act 1987; and (f) to make consequential amendments to other Acts. 25 2 Commencement (1) This Part and Part 7 come into operation on the day on which this Act receives the Royal Assent. (2) Part 2 comes into operation on 1 January 2010. (3) Division 1 of Part 3 is deemed to have come into 30 operation on 1 January 2006. 561372B.I-14/10/2009 2 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 1--Preliminary s. 2 (4) Division 2 of Part 3 and Divisions 2 and 3 of Part 5 come into operation on the day after the day on which this Act receives the Royal Assent. (5) Part 4 is deemed to have come into operation on 5 1 July 2009. (6) Subject to subsection (7), Division 1 of Part 5 and Part 6 come into operation on a day to be proclaimed. (7) If a provision referred to in subsection (6) has not 10 come into operation before 1 October 2010, it comes into operation on that day. __________________ 561372B.I-14/10/2009 3 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 2--First Home Owner Grant Act 2000 s. 3 PART 2--FIRST HOME OWNER GRANT ACT 2000 3 Eligible transaction See: (1) In section 13(1) of the First Home Owner Grant Act No. 5/2000. Act 2000, for "An eligible transaction" substitute 5 Reprint No. 2 "Subject to subsection (1A), an eligible as at 26 September transaction". 2007 and (2) After section 13(1) of the First Home Owner amending Act Nos Grant Act 2000 insert-- 12/2008, 31/2008, "(1A) The consideration for an eligible transaction 10 84/2008, with a commencement date that is on or after 4/2009 and 37/2009. 1 January 2010 must not exceed $750 000.". LawToday: www. (3) After section 13(8) of the First Home Owner legislation. Grant Act 2000 insert-- vic.gov.au "(9) Subsection (1A) does not apply in relation to 15 an eligible transaction relating to a home that is on, or to be built on, land referred to in section 65 or 66 of the Land Tax Act 2005. (10) Subsection (1A) does not apply in relation to an eligible transaction relating to a home that 20 is on, or to be built on, land referred to in section 67(1)(a) of the Land Tax Act 2005 if-- (a) the applicant-- (i) is, or, when the contract for the 25 purchase of the home or the comprehensive building contract is completed, will be, the owner of the land within the meaning of section 67(2)(a) (as affected by 30 that section) of the Land Tax Act 2005; or 561372B.I-14/10/2009 4 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 2--First Home Owner Grant Act 2000 s. 3 (ii) holds an interest in the shares of a proprietary company described in section 67(2)(b) (as affected by that section) of the Land Tax Act 5 2005 and-- (A) the interest entitles the applicant to exclusive occupation of a specified home owned by the company 10 or which will be owned by the company, when a contract for the purchase of the specified home or a comprehensive building 15 contract for the building of the specified home is completed; and (B) the value of the shares is not less than the value of the 20 company's interest in the home; and (b) the applicant continues to comply with subparagraph (i) or (ii) (as the case requires) until the end of the period that 25 the applicant is required under section 12 to occupy the home.". __________________ 561372B.I-14/10/2009 5 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 4 PART 3--LAND TAX ACT 2005 Division 1--Amendment relating to implied or constructive trusts 4 Definitions 5 See: In section 3(1) of the Land Tax Act 2005, for Act No. 88/2005. paragraph (b) of the definition of trust Reprint No. 3 substitute-- as at 20 August 2009 "(b) does not include an implied or constructive and trust, except where expressly provided by amending 10 Act Nos this Act;". 46/2008 and 4/2009. LawToday: www. legislation. vic.gov.au 5 New Division 2B inserted After Division 2A of Part 3 of the Land Tax Act 2005 insert-- "Division 2B--Land held on implied or 15 constructive trust 46L Land held on implied or constructive trust (1) A person who is the owner of land as trustee of an implied or constructive trust is liable for land tax on the land at the general rate set 20 out in Part 1 of Schedule 1. (2) The trustee is to be assessed for land tax on the whole of the land subject to the implied or constructive trust as if the land were the only land owned by the trustee. 561372B.I-14/10/2009 6 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 6 (3) Despite subsection (2), if the trustee holds land as trustee of more than one implied or constructive trust for the same beneficiary or beneficiaries, the trustee is to be assessed for 5 land tax on the whole of the land subject to those implied or constructive trusts as if that land were the only land owned by the trustee. 46M Trustee's right to reimbursement under implied trust or constructive trust 10 A trustee of an implied or constructive trust who pays any land tax assessed on land subject to the trust is entitled to recoup the amount of the tax from any trust property that is subject to the trust.". 15 Division 2--General amendments 6 Who is the owner of land? (1) In section 10(b) of the Land Tax Act 2005, for "lease from the Crown" substitute "lease of Crown land". 20 (2) In section 10(c) of the Land Tax Act 2005, for "licence from the Crown" substitute "licence of Crown land". (3) At the end of section 10 of the Land Tax Act 2005 insert-- 25 "(2) Subsection (1)(b) does not apply to a person entitled to land under a sub-lease of Crown land.". 561372B.I-14/10/2009 7 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 7 7 New section 16A After section 16 of the Land Tax Act 2005 insert-- "16A Transfer of land for no consideration 5 (1) The Commissioner may determine that a person who has disposed of land is to be deemed to not be the owner of that land if the Commissioner is satisfied that-- (a) the person has disposed of the land for 10 no valuable consideration; and (b) the disposition of the land was made in good faith and not for the purpose of evading the payment of land tax; and (c) the person to whom the land was 15 disposed of had taken possession of the land on or before midnight on 31 December in the year immediately preceding the tax year. (2) If the Commissioner makes a determination 20 under subsection (1)-- (a) the person who disposed of the land is deemed not to be the owner of the land; and (b) the person to whom the land was 25 disposed of for no valuable consideration is deemed to be the owner of the land. (3) Subsection (2) applies whether or not the person to whom the land was disposed of is 30 the registered proprietor of the land. (4) In this section-- dispose of means dispose of by way of settlement, grant, assignment, transfer or conveyance.". 561372B.I-14/10/2009 8 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 8 8 Certain long-term lessees of private land In section 45(1) of the Land Tax Act 2005, for "lease from the Crown" substitute "lease of Crown land". 5 9 General land tax surcharge for trusts (1) In section 46A(3) of the Land Tax Act 2005-- (a) for paragraph (a) substitute-- "(a) land subject to a unit trust scheme if an appointment of a nominated PPR 10 beneficiary for the scheme is in force and the land is-- (i) used and occupied as the principal place of residence of the nominated PPR beneficiary; and 15 (ii) not used to carry on a substantial business activity; or". (b) for paragraph (b)(ii) substitute-- "(ii) an appointment of a nominated PPR beneficiary for the trust is in force and 20 the land is-- (A) used and occupied as the principal place of residence of the nominated PPR beneficiary; and (B) not used to carry on a substantial 25 business activity; or". (2) After section 46A(5) of the Land Tax Act 2005 insert-- "(6) In determining whether land is used by a person to carry on a substantial business 30 activity, account must be taken of the factors referred to in section 62(2).". 561372B.I-14/10/2009 9 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 10 10 Land tax for PPR land if nominated PPR beneficiary After section 46I(3) of the Land Tax Act 2005 insert-- 5 "(4) Subsection (2) does not apply if the land for which a nomination is in force is used to carry on a substantial business activity. (5) In determining whether land is used by a person to carry on a substantial business 10 activity, account must be taken of the factors referred to in section 62(2).". 11 Unoccupied land subsequently used as principal residence In sections 61(3)(c) and 61(4)(c) of the Land Tax 15 Act 2005, for "Part" (wherever occurring) substitute "Division". 12 Crown land In section 79(2) of the Land Tax Act 2005-- (a) for paragraph (a) substitute-- 20 "(a) a person who is entitled to the land under a lease of Crown land, unless the lease is a retail premises lease within the meaning of the Retail Leases Act 2003; or"; 25 (b) in paragraph (b), for "1993." substitute "1993; or"; (c) after paragraph (b) insert-- "(c) a person who is entitled to the land under a licence of Crown land under 30 which the person has a right, absolute or conditional, of acquiring the fee simple.". 561372B.I-14/10/2009 10 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 3--Land Tax Act 2005 s. 13 13 New heading to Division 1 of Part 7 For the heading to Division 1 of Part 7 of the Land Tax Act 2005 substitute-- "Division 1--Notices and certificates". 5 14 New section 104A After section 104 of the Land Tax Act 2005 insert-- "104A Notice of errors in notice of assessment of land tax 10 (1) A person who is served with a notice of assessment of land tax must notify the Commissioner of any error or omission in the notice relating to-- (a) any land in Victoria owned by the 15 person that is not specified in the notice; (b) in the case of a notice of assessment for land jointly owned by two or more owners, any land in Victoria owned by 20 the joint owners that is not specified in the notice; (c) any land specified in the notice as exempt land. (2) Notice of the error or omission must be 25 given to the Commissioner within 60 days from the date of issue of the notice of assessment. (3) If there is more than one owner of the land specified in the notice of assessment, it is 30 sufficient compliance with this section if one of the owners provides the required information on behalf of all of them.". __________________ 561372B.I-14/10/2009 11 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 15 PART 4--PAYROLL TAX ACT 2007 15 Definitions See: In section 3 of the Payroll Tax Act 2007 insert Act No. 26/2007 the following definitions-- and 5 amending "ABN means the ABN (Australian Business Act Nos 26/2007, Number) for an entity within the meaning of 12/2008, the A New Tax System (Australian Business 31/2008, 79/2008 and Number) Act 1999 of the Commonwealth; 4/2009. LawToday: Australian jurisdiction means a State or a 10 www. Territory; legislation. vic.gov.au instrument includes a cheque, bill of exchange, promissory note, money order or a postal order issued by a post office; registered business address means an address for 15 service of notices under the A New Tax System (Australian Business Number) Act 1999 of the Commonwealth on an entity that has an ABN, as shown in the Australian Business Register kept under that Act;". 20 16 Taxable wages--New sections 10 to 11C For sections 10 and 11 of the Payroll Tax Act 2007 substitute-- "10 What are taxable wages? (1) For the purposes of this Act, taxable wages 25 are wages that are taxable in this jurisdiction. (2) However, exempt wages are not taxable wages. 561372B.I-14/10/2009 12 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 11 Wages that are taxable in this jurisdiction (1) For the purposes of this Act, wages are taxable in this jurisdiction if-- (a) the wages are paid or payable by an 5 employer for or in relation to services performed by an employee wholly in this jurisdiction; or (b) the wages are paid or payable by an employer for or in relation to services 10 performed by an employee in 2 or more Australian jurisdictions, or partly in one or more Australian jurisdictions and partly outside all Australian jurisdictions, and-- 15 (i) the employee is based in this jurisdiction; or (ii) the employer is based in this jurisdiction (in a case where the employee is not based in an 20 Australian jurisdiction); or (iii) the wages are paid or payable in this jurisdiction (in a case where both the employee and the employer are not based in an 25 Australian jurisdiction); or (iv) the wages are paid or payable for services performed mainly in this jurisdiction (in a case where both the employee and the employer 30 are not based in an Australian jurisdiction and the wages are not paid or payable in an Australian jurisdiction); or 561372B.I-14/10/2009 13 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 (c) the wages are paid or payable by an employer for or in relation to services performed by an employee wholly outside all Australian jurisdictions and 5 are paid or payable in this jurisdiction. Note Section 66A provides an exemption for wages paid or payable for services performed wholly in one or more other countries for a continuous period of more than 6 months. 10 (2) The question of whether wages are taxable in this jurisdiction is to be determined by reference only to the services performed by the employee in respect of the employer during the month in which the wages are 15 paid or payable, subject to this section. (3) Any wages paid or payable by an employer in respect of an employee in a particular month are taken to be paid or payable for or in relation to the services performed by the 20 employee in respect of the employer during that month. Note For example, if wages paid in a month are paid to an employee for services performed over several months, the 25 question of whether the wages are taxable in this jurisdiction is to be determined by reference only to services performed by the employee in the month in which the wages are paid. The services performed in previous months are disregarded. (The services performed in previous months will be relevant 30 to the question of whether wages paid in those previous months are taxable in this jurisdiction.) (4) If no services are performed by an employee in respect of an employer during the month in which wages are paid or payable to or in 35 relation to the employee-- 561372B.I-14/10/2009 14 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 (a) the question of whether the wages are taxable in this jurisdiction is to be determined by reference only to the services performed by the employee in 5 respect of the employer during the most recent prior month in which the employee performed services in respect of the employer; and (b) the wages are taken to be paid or 10 payable for or in relation to the services performed by the employee in respect of the employer during that most recent prior month. (5) If no services were performed by an 15 employee in respect of an employer during the month in which wages are paid or payable to or in relation to the employee or in any prior month-- (a) the wages are taken to be paid or 20 payable for or in relation to services performed by the employee in the month in which the wages are paid or payable; and (b) the services are taken to have been 25 performed at a place or places where it may be reasonably expected that the services of the employee in respect of the employer will be performed. (6) All amounts of wages paid or payable in the 30 same month by the same employer in respect of the same employee are to be aggregated for the purposes of determining whether they are taxable in this jurisdiction (as if they were paid or payable for all services 35 performed by the employee in the month in which the wages are paid or payable, or the 561372B.I-14/10/2009 15 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 most recent prior month, as the case requires). Note For example, if one amount of wages is paid by an employer 5 in a particular month for services performed in this jurisdiction, and another amount of wages is paid by the same employer in the same month for services performed by the same employee in another Australian jurisdiction, the wages paid are to be aggregated (as if they were paid for all 10 services performed by the employee in that month). Accordingly, subsection (1)(b) would be applied for the purpose of determining whether the wages are taxable in this jurisdiction. (7) If wages are paid in a different month from 15 the month in which they are payable, the question of whether the wages are taxable in this jurisdiction is to be determined by reference to the earlier of the relevant months. 20 11A Jurisdiction in which employee is based (1) For the purposes of this Act, the jurisdiction in which an employee is based is the jurisdiction in which the employee's principal place of residence is located. 25 (2) The jurisdiction in which an employee is based is to be determined by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. 30 (3) If more than one jurisdiction would qualify as the jurisdiction in which an employee is based during a month, the jurisdiction in which the employee is based is to be determined by reference to the state of affairs 35 existing on the last day of that month. 561372B.I-14/10/2009 16 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 (4) An employee who does not have a principal place of residence is taken, for the purposes of this Act, to be an employee who is not based in an Australian jurisdiction. 5 (5) In the case of wages paid or payable to a corporate employee, the jurisdiction in which the employee is based is to be determined in accordance with section 11B instead of this section (as if a reference in section 11B to an 10 employer were a reference to an employee). (6) In this section, a corporate employee is a company that is taken to be an employee under section 34 or 39 or a company to whom a payment is made that is taken to be 15 wages payable to an employee under section 42 or 47. 11B Jurisdiction in which employer is based (1) For the purposes of this Act, the jurisdiction in which an employer is based is-- 20 (a) the jurisdiction in which the employer's registered business address is located (if the employer has an ABN); or (b) the jurisdiction in which the employer's principal place of business is located 25 (in any other case). (2) If wages are paid or payable in connection with a business carried on by an employer under a trust, the employer's registered business address is the registered business 30 address of the trust or, if the trust does not have an ABN, the registered business address of the trustee of the trust. 561372B.I-14/10/2009 17 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 (3) If an employer has registered business addresses located in different jurisdictions at the same point in time, the jurisdiction in which the employer is based at that point in 5 time is the jurisdiction in which the employer's principal place of business is located. (4) The jurisdiction in which an employer is based is to be determined by reference to the 10 state of affairs existing during the month in which the relevant wages are paid or payable. (5) If more than one jurisdiction would qualify as the jurisdiction in which an employer is 15 based during a month, the jurisdiction in which the employer is based is to be determined by reference to the state of affairs existing on the last day of that month. (6) An employer who has neither a registered 20 business address nor a principal place of business is taken, for the purposes of this Act, to be an employer who is not based in an Australian jurisdiction. 11C Place and date of payment of wages 25 (1) For the purposes of this Act, wages are taken to have been paid at a place if, for the purpose of the payment of those wages-- (a) an instrument is sent or given or an amount is transferred by an employer to 30 a person or a person's agent at that place; or (b) an instruction is given by an employer for the crediting of an amount to the account of a person or a person's agent 35 at that place. 561372B.I-14/10/2009 18 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 16 (2) The wages are taken to have been paid on the date that the instrument was sent or given, the amount was transferred or the account credited in accordance with the instruction 5 (as the case requires). (3) Wages are taken to be payable at the place at which they are paid, subject to this section. (4) Wages that are not paid by the end of the month in which they are payable are taken to 10 be payable at-- (a) the place where wages were last paid by the employer to the employee; or (b) if wages have not previously been paid by the employer to the employee--the 15 place where the employee last performed services in respect of the employer before the wages became payable. (5) If wages paid or payable in the same month 20 by the same employer in respect of the same employee are paid or payable in more than one Australian jurisdiction, the wages paid or payable in that month are taken to be paid or payable in the Australian jurisdiction in 25 which the highest proportion of the wages are paid or payable. Note Section 11 requires all wages paid or payable in the same month by the same employer in respect of the same 30 employee to be aggregated for the purpose of determining whether the wages are taxable in this jurisdiction. The above provision ensures only one Australian jurisdiction can be considered to be the jurisdiction in which the wages are paid or payable.". 561372B.I-14/10/2009 19 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 17 17 What are wages? After section 13(2) of the Payroll Tax Act 2007 insert-- "(3) This Act applies in respect of wages referred 5 to in subsections (1)(a) to (e) that are paid or payable to or in relation to a person who is not an employee in the same way as it applies to wages paid or payable to an employee (as if a reference in this Act to an 10 employee included a reference to any such person).". 18 Inclusion of shares and options granted to directors as wages (1) Section 24(4) of the Payroll Tax Act 2007 is 15 repealed. (2) At the foot of section 24 of the Payroll Tax Act 2007 insert-- "Note Section 13 provides that a reference to an employee in this 20 Act includes a reference to any person to whom any amount that is treated as wages under this Act is payable. See also section 11, which deems the wages to be paid or payable for services performed.". 19 Repeal of section 25 25 Section 25 of the Payroll Tax Act 2007 is repealed. 20 Place where wages are payable For the note at the foot of section 26(2) of the Payroll Tax Act 2007 substitute-- 30 "Note The place where wages are paid or payable is sometimes relevant to determining whether the wages are liable to payroll tax under this Act. See section 11.". 561372B.I-14/10/2009 20 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 21 21 Part 4 Exemptions After Division 8 of Part 4 of the Payroll Tax Act 2007 insert-- "Division 9--Services outside Australia 5 66A Wages paid or payable for or in relation to services performed in other countries Wages are exempt wages if they are paid or payable for or in relation to services performed by an employee wholly in one or 10 more other countries for a continuous period of more than 6 months beginning on the day on which wages were first paid or payable to that employee for the services so performed.". 15 22 Transitional provisions After clause 15 of Schedule 3 to the Payroll Tax Act 2007 insert-- "16 Application of amendments (1) The amendments made to this Act by the 20 State Taxation Acts Further Amendment Act 2009 apply in respect of taxable wages that are paid or payable on or after 1 July 2009. (2) The amendments made to this Act by the 25 State Taxation Acts Further Amendment Act 2009 are to be applied for the purpose of determining the correct amount of payroll tax (within the meaning of section 82) payable by an employer in respect of the 30 financial year commencing on 1 July 2009 (including in respect of expired months). 561372B.I-14/10/2009 21 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 4--Payroll Tax Act 2007 s. 22 (3) However, section 9 continues to apply in respect of an expired month as if the amendments made to this Act by the State Taxation Acts Further Amendment Act 5 2009 had not been made. (4) In this clause, an expired month is a month occurring after June 2009 that ended before the date on which the State Taxation Acts Further Amendment Act 2009 received the 10 Royal Assent.". __________________ 561372B.I-14/10/2009 22 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 23 PART 5--TAXATION ADMINISTRATION ACT 1997 Division 1--Amendments relating to recognised jurisdictions 23 Purpose In section 1 of the Taxation Administration Act See: Act No. 5 1997, after "laws" insert "and the reciprocal 40/1997. enforcement of recognised laws". Reprint No. 4 as at 29 February 2008 and amending Act No. 84/2008. LawToday: www. legislation. vic.gov.au 24 Definitions (1) In section 3 of the Taxation Administration Act 1997 insert the following definitions-- 10 "corresponding Commissioner, in relation to a recognised jurisdiction, means the person who is responsible for the general administration of the law that corresponds with this Act; 15 recognised jurisdiction means the Commonwealth, another State or a Territory; recognised law means a law administered by a corresponding Commissioner that is-- (a) a law relating to the imposition of a tax, 20 duty or levy; or (b) a law declared by the Governor in Council under subsection (2) to be a recognised law;". 561372B.I-14/10/2009 23 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 25 (2) At the end of section 3 of the Taxation Administration Act 1997 insert-- "(2) The Governor in Council may, by Order published in the Government Gazette, 5 declare a law of the Commonwealth, another State or a Territory to be a recognised law for the purposes of this Act.". 25 Meaning of taxation laws In section 4 of the Taxation Administration Act 10 1997-- (a) in paragraph (d), for "Act;" substitute "Act."; (b) paragraph (e) is repealed. 26 Relationship with other taxation laws 15 After section 7(1)(e) of the Taxation Administration Act 1997 insert-- "(ea) reciprocal enforcement of recognised laws;". 27 Searches without a warrant Insert the following the heading to section 76 of 20 the Taxation Administration Act 1997-- "Powers of entry". 28 New Division 2A inserted in Part 9 After Division 2 of Part 9 of the Taxation Administration Act 1997 insert-- 25 "Division 2A--Investigations for the purposes of recognised laws 90A Investigations by and on behalf of corresponding Commissioner (1) The Commissioner may, by agreement with 30 a corresponding Commissioner of a recognised jurisdiction-- 561372B.I-14/10/2009 24 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 28 (a) authorise the corresponding Commissioner to exercise a function under Division 2 for the purposes of a recognised law in force in that 5 jurisdiction; or (b) exercise on behalf of the corresponding Commissioner a function under Division 2 for the purposes of a recognised law in force in that 10 jurisdiction. (2) An agreement under subsection (1) may be subject to any conditions imposed at the time the agreement is entered into or at a later time by-- 15 (a) the Commissioner; or (b) the corresponding Commissioner. 90B Exercise of functions under Division 2 (1) For the purposes of exercising a function under Division 2 in respect of a recognised 20 law-- (a) a reference in this Part to tax is to be read as a reference to tax under the recognised law; and (b) a reference in this Part to a tax liability 25 is to be read as a reference to a tax liability under the recognised law; and (c) a reference in this Part to a taxation law is to be read as a reference to the recognised law; and 30 (d) a reference in this Part to an offence against a taxation law is to be read as a reference to an offence against, or contravention of, the recognised law. 561372B.I-14/10/2009 25 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 28 (2) If the Commissioner authorises a corresponding Commissioner of a recognised jurisdiction to exercise a function under Division 2 in respect of a recognised law-- 5 (a) a reference in this Part to the Commissioner is to be read as a reference to the corresponding Commissioner; and (b) a reference in this Part to an authorised 10 officer is to be read as a reference to a person authorised to exercise the same function, or an equivalent function, under the recognised law; and (c) a reference in this Part to an authorised 15 officer's identity card, in relation to a person authorised to exercise the same function, or an equivalent function, under the recognised law, is to be read as a reference to an identification card 20 issued to that person under the recognised law. 90C Transfer of documents or things seized under investigations for recognised jurisdiction 25 An authorised officer who seizes any document or thing under section 77(2)(b) for the purpose of a recognised law in force in a recognised jurisdiction may, for the purposes of the recognised law, transfer the document 30 or thing to-- (a) the corresponding Commissioner of the recognised jurisdiction; or (b) an authorised person acting on behalf of the corresponding Commissioner of the 35 recognised jurisdiction. 561372B.I-14/10/2009 26 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 28 90D Investigations by Commissioner in another jurisdiction (1) The Commissioner may enter into an agreement with a corresponding 5 Commissioner of a recognised jurisdiction under which-- (a) the Commissioner is authorised to exercise the investigative functions conferred or imposed by a recognised 10 law in force in the recognised jurisdiction for the purposes of a taxation law; or (b) the corresponding Commissioner is to exercise on behalf of the Commissioner 15 the investigative functions conferred or imposed by a recognised law in force in the recognised jurisdiction for the purposes of a taxation law. (2) The Commissioner may authorise any person 20 who is authorised to exercise a function under Division 2 for the purposes of a taxation law to exercise on behalf of the Commissioner the investigative functions that are conferred or imposed under 25 section 90D(1)(a). (3) In this section, investigative function includes any function that corresponds to a function conferred or imposed under Division 2. 30 90E Certificate of authority (1) The Commissioner must issue a certificate of authority to any person authorised by a corresponding Commissioner to carry out a function under Division 2 for the purposes of 35 a recognised law. 561372B.I-14/10/2009 27 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 29 (2) Any person who exercises or purports to exercise a function under Division 2 on behalf of a corresponding Commissioner for the purposes of a recognised law must 5 produce a certificate of authority.". 29 Disclosures to a recognised jurisdiction and national regulators (1) For section 92(1)(c) of the Taxation Administration Act 1997 substitute-- 10 "(c) in connection with the administration or execution of a recognised law (including for the purpose of any legal proceedings arising out of a recognised law or a report of those proceedings); or". 15 (2) After section 92(1)(e)(vf) of the Taxation Administration Act 1997 insert-- "(vg) the Australian Crime Commission; or (vh) the Australian Securities and Investments Commission; or 20 (vha) the Australian Taxation Office; or". Division 2--Amendments relating to notification defaults 30 Definitions In section 3 of the Taxation Administration Act 1997, insert the following definition-- 25 "notification default means-- (a) a failure to lodge a notice under section 46K of the Land Tax Act 2005; or (b) a failure to notify the Commissioner of 30 an error or omission in accordance with section 104A of the Land Tax Act 2005;". 561372B.I-14/10/2009 28 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 31 31 Penalty tax for notification defaults (1) Insert the following heading to section 29 of the Taxation Administration Act 1997-- "Penalty tax in respect of certain defaults". 5 (2) In section 29(1) of the Taxation Administration Act 1997 omit "in addition to the amount of tax unpaid". (3) After section 29(1) of the Taxation Administration Act 1997 insert-- 10 "(1A) If a notification default occurs, the taxpayer is liable to pay penalty tax.". (4) In section 29(2) of the Taxation Administration Act 1997 after "interest" insert "and any amount of tax unpaid". 15 32 Amount of penalty tax for notification default (1) After section 30(1) of the Taxation Administration Act 1997 insert-- "(1A) The amount of penalty tax payable in respect of a notification default is 25% of the 20 additional amount of tax that the taxpayer would have been assessed as liable to pay had the notification default not occurred, subject to this Division.". (2) After section 30(2) of the Taxation 25 Administration Act 1997 insert-- "(2A) The Commissioner may increase the amount of penalty tax payable in respect of a notification default to 75% of the additional amount of tax that the taxpayer would have 30 been assessed as liable to pay had the notification default not occurred if the Commissioner is satisfied that the notification default was caused wholly or partly by the intentional disregard by the 561372B.I-14/10/2009 29 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 33 taxpayer (or a person acting on behalf of the taxpayer) of section 46K or 104A of the Land Tax Act 2005 (as the case requires).". (3) In section 30(3) of the Taxation Administration 5 Act 1997-- (a) after "tax default" (where first occurring) insert "or notification default"; (b) in paragraph (b) for "tax default" substitute "default". 10 33 Reduction in penalty tax (1) In section 31(1) of the Taxation Administration Act 1997-- (a) after "tax default" (where first occurring) insert "or notification default"; 15 (b) for "tax default" (where secondly occurring) substitute "default". (2) In section 31(2) of the Taxation Administration Act 1997-- (a) after "tax default" (where first occurring) 20 insert "or notification default"; (b) for "tax default" (where secondly occurring) substitute "default". 34 Increase in penalty tax for concealment In section 32(1) of the Taxation Administration 25 Act 1997-- (a) after "tax default" (where first occurring) insert "or notification default"; (b) for "tax default" (where secondly occurring) substitute "default". 561372B.I-14/10/2009 30 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 35 35 New clause inserted in Schedule 1 In Schedule 1 to the Taxation Administration Act 1997, after clause 16 insert-- "17 Penalty tax for notification defaults 5 (1) Division 2 of Part 5 does not apply to permit the imposition of penalty tax for a trust notification default if the event requiring the lodging of notice with the Commissioner occurred before 1 January 2010. 10 (2) Division 2 of Part 5 does not apply to an error notification default that occurred in relation to a notice of assessment that was served on the taxpayer before 1 January 2010. 15 (3) In this clause-- error notification default means a failure to notify the Commissioner of an error or omission in accordance with section 104A of the Land Tax Act 2005; 20 trust notification default means a failure to lodge a notice under section 46K of the Land Tax Act 2005.". Division 3--General amendments 36 Permitted disclosures to particular persons 25 In section 92(1) of the Taxation Administration Act 1997-- (a) for paragraph (b) substitute-- "(b) in connection with the administration or execution of-- 30 (i) a taxation law; or (ii) the First Home Owner Grant Act 2000; or 561372B.I-14/10/2009 31 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 5--Taxation Administration Act 1997 s. 37 (iii) the Unclaimed Money Act 2008-- including for the purpose of any legal proceeding arising out of that taxation 5 law or Act or a report of those proceedings; or"; (b) in paragraph (e)(iii), for "the Archives Authority" substitute "the Public Record Office Victoria". 10 37 Service of process by Commissioner After section 125(1) of the Taxation Administration Act 1997 insert-- "(1A) To avoid doubt, this section applies to the service of any court process in proceedings 15 to recover any amount under this Act.". __________________ 561372B.I-14/10/2009 32 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 6--Repeal and Consequential Amendments s. 38 PART 6--REPEAL AND CONSEQUENTIAL AMENDMENTS 38 Repeal of Taxation (Reciprocal Powers) Act 1987 See: Act No. 37/1987. The Taxation (Reciprocal Powers) Act 1987 is Reprint No. 3 repealed. as at 16 February 2006 and amending Act No. 26/2007. LawToday: www. legislation. vic.gov.au 5 39 Consequential amendment to Accident See: Act No. Compensation Act 1985 10191. Reprint No. 15 Section 244 of the Accident Compensation Act as at 17 April 2008 1985 is repealed. and amending Act Nos 107/1997, 12/2008, 24/2008, 65/2008, 77/2008, 66/2008, 69/2008 and 4/2009. LawToday: www. legislation. vic.gov.au 40 Consequential amendment to Business Franchise See: Act No. 10 (Tobacco) Act 1974 8597. Reprint No. 5 In section 2(1) of the Business Franchise as at 19 March (Tobacco) Act 1974, the definition of 1998 and corresponding law is repealed. amending Act Nos 46/1998 and 52/1998. LawToday: www. legislation. vic.gov.au 561372B.I-14/10/2009 33 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 6--Repeal and Consequential Amendments s. 41 See: 41 Consequential amendment to Unclaimed Money Act No. Act 2008 44/2008. LawToday: (1) For section 77(1)(c) of the Unclaimed Money www. legislation. Act 2008 substitute-- vic.gov.au 5 "(c) in connection with the administration of a taxation law or a recognised law that is in force in a recognised jurisdiction; or". (2) For section 77(2) of the Unclaimed Money Act 2008 substitute-- 10 "(2) In this section, recognised jurisdiction, recognised law and taxation law have the same meanings as they have in the Taxation Administration Act 1997.". __________________ 561372B.I-14/10/2009 34 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Part 7--Repeal of Amending Act s. 42 PART 7--REPEAL OF AMENDING ACT 42 Repeal of amending Act This Act is repealed on 1 October 2011. Note 5 The repeal of this Act does not affect the continuing operation of the amendments and repeal made by it (see section 15(1) of the Interpretation of Legislation Act 1984). 561372B.I-14/10/2009 35 BILL LA INTRODUCTION 14/10/2009

 


 

State Taxation Acts Further Amendment Bill 2009 Endnotes ENDNOTES By Authority. Government Printer for the State of Victoria. 561372B.I-14/10/2009 36 BILL LA INTRODUCTION 14/10/2009

 


 

 


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