Payroll Tax Act 1971


Queensland Crest
Payroll Tax Act 1971
Queensland Payroll Tax Act 1971 Current as at [Not applicable] Indicative reprint note This is an unofficial version of a reprint of this Act that incorporates all proposed amendments to the Act included in the Revenue and Other Legislation Amendment Bill 2018. This indicative reprint has been prepared for information only— it is not an authorised reprint of the Act . The point-in-time date for this indicative reprint is the introduction date for the Revenue and Other Legislation Amendment Bill 2018—22 August 2018. Detailed information about indicative reprints is available on the Information page of the Queensland legislation website.
© State of Queensland 2018 This work is licensed under a Creative Commons Attribution 4.0 International License.
Not authorised —indicative only Queensland Payroll Tax Act 1971 Contents Part 1 1 2 3 3A 4 5 6 6A 7 8 Part 2 Division 1 Subdivision 1 8A 9 9A 9B 9C Subdivision 2 10 11 12 13 Division 1A 13A Page Preliminary Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Dictionary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Meaning of superannuation contribution . . . . . . . . . . . . . . . . . . . 11 Meaning of termination payment . . . . . . . . . . . . . . . . . . . . . . . . . 12 Other provisions about meaning of wages—superannuation contributions and GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Meaning of change of status . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Meaning of final period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Reference to periodic return period or return period . . . . . . . . . . 17 Notes in text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Relationship of Act with Administration Act . . . . . . . . . . . . . . . . . 18 Liability to taxation Imposition of liability Wages liable to payroll tax Application of sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Wages liable to payroll tax—nexus with Queensland . . . . . . . . . 19 State in which employee is based . . . . . . . . . . . . . . . . . . . . . . . . 21 State in which employer is based . . . . . . . . . . . . . . . . . . . . . . . . 22 Place and day of payment of wages . . . . . . . . . . . . . . . . . . . . . . 23 Other provisions about imposing liability for payroll tax Imposition of payroll tax on taxable wages . . . . . . . . . . . . . . . . . 25 When liability for payroll tax arises . . . . . . . . . . . . . . . . . . . . . . . 25 Employer to pay payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Value of taxable wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Contractor provisions Definitions for div 1A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Payroll Tax Act 1971 Contents Not authorised —indicative only 13B 13C 13D 13E 13F Division 1B 13G 13H 13I 13J 13K 13L 13LA Division 1C 13M 13N 13O 13P 13Q 13R 13S 13T 13U 13V 13W Division 1D Subdivision 1 13X 13Y 13Z 13ZA 13ZB 13ZC 13ZD 13ZE Meaning of relevant contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Persons taken to be employers . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Persons taken to be employees . . . . . . . . . . . . . . . . . . . . . . . . . 30 Amounts taken to be wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Liability for payroll tax for payments taken to be wages . . . . . . . 32 Employment agents Meaning of employment agency contract . . . . . . . . . . . . . . . . . . 33 Persons taken to be employers . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Persons taken to be employees . . . . . . . . . . . . . . . . . . . . . . . . . 33 Amounts taken to be wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Liability for payroll tax for payments taken to be wages . . . . . . . 34 Employment agency contract reducing or avoiding liability to payroll tax 35 Particular avoidance arrangements involving employment agents 35 Shares and options Application of div 1C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Definitions for div 1C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 When share or option is granted . . . . . . . . . . . . . . . . . . . . . . . . . 39 Grant of share because of exercise of option . . . . . . . . . . . . . . . 39 Day on which wages are paid or payable . . . . . . . . . . . . . . . . . . 40 Election by grantor of relevant day . . . . . . . . . . . . . . . . . . . . . . . 40 Automatic election of relevant day . . . . . . . . . . . . . . . . . . . . . . . 41 Effect of rescission or cancellation of share or option . . . . . . . . . 41 Value of taxable wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 When services are performed . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Place where wages are paid or payable . . . . . . . . . . . . . . . . . . . 44 Allowances Motor vehicle allowances Definitions for sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Exempt component of motor vehicle allowance . . . . . . . . . . . . . 46 Working out the number of exempt kilometres . . . . . . . . . . . . . . 47 Continuous recording method . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Averaging method—how it works . . . . . . . . . . . . . . . . . . . . . . . . 48 Averaging method—records to be kept by employer . . . . . . . . . 49 Averaging method—what is the averaging period . . . . . . . . . . . . 51 Averaging method—recalculation of relevant percentage . . . . . . 51 Page 2
Payroll Tax Act 1971 Contents Not authorised —indicative only 13ZF 13ZG Subdivision 2 13ZH Division 2 14 14A 15 15A Division 3 Subdivision 1 16 17 18 19 20 21 Subdivision 2 22 23 24 25 26 27 Subdivision 3 27A Division 4 Subdivision 1 28 29 30 31 Subdivision 2 32 33 Averaging method—replacing a business vehicle . . . . . . . . . . . . 52 Switching between continuous recording and averaging methods 53 Accommodation allowances Exempt rate for accommodation allowance . . . . . . . . . . . . . . . . 53 Exemptions Exemption from payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Exemption for parental, adoption or surrogacy leave . . . . . . . . . 59 Exemption from payroll tax—certain CWA wages . . . . . . . . . . . . 62 Exemption for services performed or rendered entirely in another country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Periodic liability Employer other than the DGE for a group Application of sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Definitions for sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Meaning of calculation day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Meaning of significant wage change . . . . . . . . . . . . . . . . . . . . . . 66 Amount of periodic liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Determination by commissioner of fixed periodic deduction . . . . 68 DGE for a group Application of sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Definition for sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Meaning of calculation day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Meaning of significant wage change . . . . . . . . . . . . . . . . . . . . . . 70 Amount of periodic liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Determination by commissioner of fixed periodic deduction . . . . 71 Rebate Rebate for periodic liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Annual liability Employer other than the DGE for a group Application of sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Definitions for sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Amount of annual liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Entitlement to annual refund amount . . . . . . . . . . . . . . . . . . . . . 77 DGE for a group Application of sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Definitions for sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Page 3
Payroll Tax Act 1971 Contents Not authorised —indicative only 34 35 Subdivision 3 35A Division 5 Subdivision 1 36 37 38 39 Subdivision 2 40 41 42 43 Subdivision 3 43A Division 6 44 45 46 47 48 49 Division 6A 49A 49B 49C 49D 49E 49F Division 7 Page 4 Amount of DGE’s annual liability . . . . . . . . . . . . . . . . . . . . . . . . . 80 Entitlement to annual refund amount . . . . . . . . . . . . . . . . . . . . . 81 Rebate Rebate for annual payroll tax amount . . . . . . . . . . . . . . . . . . . . . 81 Final liability Employer other than the DGE for a group Application of sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Definitions for sdiv 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Amount of final liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Entitlement to final refund amount . . . . . . . . . . . . . . . . . . . . . . . . 86 DGE for a group Application of sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Definitions for sdiv 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Amount of DGE’s final liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Entitlement to final refund amount . . . . . . . . . . . . . . . . . . . . . . . . 89 Rebate Rebate for final payroll tax amount . . . . . . . . . . . . . . . . . . . . . . . 90 Sharing of excess deduction by group members Definitions for div 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Meaning of excess deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Nomination by DGE of group members to share in excess deduction 92 Determination by commissioner of group members to share in excess deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Sharing of excess deduction by entitled group members at end of financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Sharing of excess deduction by entitled group members on group ceasing to exist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Sharing of excess rebate by group members Definitions for div 6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Meaning of excess rebate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Nomination by DGE of group members to share in excess rebate 97 Determination by commissioner of group members to share in excess rebate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Sharing of excess rebate by entitled group members at end of relevant financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Sharing of excess rebate by entitled group members on group ceasing to exist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Avoidance arrangements
50 Division 8 51 51A Part 3 Division 1 52 53 54 55 56 57 Division 2 58 59 60 61 62 63 64 65 Part 4 Division 1 66 67 Division 2 68 69 70 71 72 73 74 Division 2A Payroll Tax Act 1971 Contents Arrangements for avoidance of tax may be disregarded . . . . . . . 101 Miscellaneous provisions Wages paid by or to third parties . . . . . . . . . . . . . . . . . . . . . . . . . 102 Joint and several liability of group members . . . . . . . . . . . . . . . . 103 Registration and returns Registration Meaning of criteria for registration . . . . . . . . . . . . . . . . . . . . . . . . 103 Application for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Registration of employer without application . . . . . . . . . . . . . . . . 104 Notice of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Amendment of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Cancellation of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Returns Definition for div 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Periodic returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Duration of periodic return period . . . . . . . . . . . . . . . . . . . . . . . . 107 Deemed lodgement of periodic return—payment by electronic transfer of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Exemption from requirement to lodge periodic returns . . . . . . . . 108 Annual return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Final return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Further returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Grouping provisions Interpretation Definitions for pt 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Grouping provisions to operate independently . . . . . . . . . . . . . . 111 Business groups Constitution of groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Groups of corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Groups arising from the use of common employees . . . . . . . . . . 112 Groups of commonly controlled businesses . . . . . . . . . . . . . . . . 113 Groups arising from tracing of interests in corporations . . . . . . . 115 Smaller groups subsumed into larger groups . . . . . . . . . . . . . . . 116 Exclusion of persons from groups . . . . . . . . . . . . . . . . . . . . . . . . 116 Business groups—interpretation provisions for tracing of interests in corporations Page 5 Not authorised —indicative only
Payroll Tax Act 1971 Contents Not authorised —indicative only 74A 74B 74C 74D 74E 74F 74G Division 3 75 Part 5 Division 1 76 77 78 79 80 Division 2 81 82 Part 6 Division 1 83 84 85 Division 2 87 87A 88 89 Division 3 90 Page 6 Application of div 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Definitions for div 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Who are associated persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Who are related persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Direct interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Indirect interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Aggregate interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Designated group employer Designation of group member as DGE . . . . . . . . . . . . . . . . . . . . 122 Provisions about assessments Reassessments When registered employer may make reassessment . . . . . . . . . 124 Reassessment—determination of periodic deduction . . . . . . . . . 124 Reassessment—annual liability of non-group employer who has lodged a final return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Reassessment—change of DGE . . . . . . . . . . . . . . . . . . . . . . . . 126 Reassessment—making or revocation of order excluding a person from a group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Provisions about particular assessments made by the commissioner Provision about assessments made by commissioner—employer who is required to lodge periodic returns . . . . . . . . . . . . . . . . . . . . . . . . 128 Provision about assessments made by commissioner—employer who is exempt from lodging periodic returns . . . . . . . . . . . . . . . . . . . . . 129 Miscellaneous Refund provisions Application of annual refund amount or final refund amount . . . . 131 Provision for refunds under Administration Act to group members 132 Entitlement to a refund of payroll tax . . . . . . . . . . . . . . . . . . . . . . 133 Notification requirements Notification requirement—employers exempt from lodging periodic returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Notification requirement—employers authorised to lodge periodic returns for periods other than a month . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Notification requirement—particular group members . . . . . . . . . 134 Notification requirement—liquidators and other administrators . . 136 Other provisions Commissioner may require payment of penalty . . . . . . . . . . . . . 136
91 92 93 94 95 96 97 97A Part 7 Division 1 98 Division 2 99 100 101 102 103 104 105 106 Division 3 107 Division 4 108 109 110 Division 5 111 112 113 Payroll Tax Act 1971 Contents Period for keeping particular records relating to fringe benefits tax 138 Application of Act to trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Avoiding taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Notice of change of address for service . . . . . . . . . . . . . . . . . . . 139 Cents to be disregarded for calculations . . . . . . . . . . . . . . . . . . . 140 Approval of forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Regulation-making power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Application of particular amendments . . . . . . . . . . . . . . . . . . . . . 141 Savings and transitional provisions for Payroll Tax Administration Amendment Act 2004 Preliminary Definitions for pt 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Application of amended Act and Administration Act Application of amended Act in relation to liabilities etc. arising on or after commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Registration under s 54 of person required to register before commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Application of amended ss 58–62 for previous return periods . . 145 Assessment under amended s 81 in relation to particular pre- commencement liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Application of amended s 95 to calculations made under previous provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 This Act as a revenue law for the Administration Act . . . . . . . . . 146 Application of Administration Act, s 38 . . . . . . . . . . . . . . . . . . . . 148 Second or subsequent offences . . . . . . . . . . . . . . . . . . . . . . . . . 148 Application of previous provisions Application of previous provisions to particular liabilities etc. . . . 148 Provisions about periodic liability after commencement Fixed periodic deduction for periodic return periods after commencement—existing determination . . . . . . . . . . . . . . . . . . 149 Fixed periodic deduction for periodic return periods after commencement—existing nomination . . . . . . . . . . . . . . . . . . . . 149 Application of fixed periodic deduction to particular non-group employers after commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Provisions for annual liability for transitional year Purpose of div 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Basic principles for working out employer’s annual liability . . . . . 150 Employer who was not a group member for a prescribed period during the transitional year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Page 7 Not authorised —indicative only
Payroll Tax Act 1971 Contents Not authorised —indicative only 114 Division 6 115 116 117 Division 7 118 119 120 121 122 123 124 125 126 127 128 129 Part 8 131 132 133 134 Part 9 Division 1 135 Division 2 136 137 138 Page 8 Employer who is a DGE on 30 June in the transitional year . . . . 152 Provisions for final liability for transitional final period Purpose of div 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 When transitional final period starts . . . . . . . . . . . . . . . . . . . . . . 153 Employer who is a DGE on the last day of a transitional final period 154 Miscellaneous provisions Commissioner assessment—employer who becomes a DGE in a transitional year before commencement . . . . . . . . . . . . . . . . . . . 155 Commissioner assessment—employer who ceases to be a DGE in a transitional year before commencement . . . . . . . . . . . . . . . . . . . 157 Delegations under previous s 4A . . . . . . . . . . . . . . . . . . . . . . . . 158 Employers registered under previous s 12 immediately before commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Notices given by commissioner under previous s 13 . . . . . . . . . 158 Continuing effect of exemptions given by commissioner under previous s14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Continuing use of particular forms . . . . . . . . . . . . . . . . . . . . . . . . 159 Application of ss 83 and 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Application of s 88 notification requirement in relation to a transitional year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Application of s 89 to particular liquidators . . . . . . . . . . . . . . . . . 160 Application of s 94 to particular employers . . . . . . . . . . . . . . . . . 160 References in amended Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Transitional provisions for Payroll Tax (Harmonisation) Amendment Act 2008 Interpretation of amended provisions . . . . . . . . . . . . . . . . . . . . . 161 Application of amended Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Application of avoidance provision for employment agency contracts 162 Continuation of orders excluding person from group . . . . . . . . . 162 Transitional provisions for Revenue and Other Legislation Amendment Act 2010 Interpretation Definitions for pt 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Application of amended Act and Administration Act Application of amended Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Exemption of penalty under s 90 . . . . . . . . . . . . . . . . . . . . . . . . . 164 Remission of unpaid tax interest and penalty tax under the Administration Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Not authorised —indicative only 139 140 Part 10 141 142 Part 11 143 Part 12 144 Part 13 145 Part 14 146 Schedule Payroll Tax Act 1971 Contents Exemption for offences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Reassessment—final return included excluded wages . . . . . . . . 165 Transitional provisions for Revenue and Other Legislation Amendment Act 2011 Assessment and payment of payroll tax for shares and options . 166 Application of pt 2, div 1C for granting of particular shares or options 167 Transitional provision for Revenue Amendment and Trade and Investment Queensland Act 2013 Exemption under s 14A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Transitional provision for Payroll Tax Rebate, Revenue and Other Legislation Amendment Act 2015 Application of s 13B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Transitional provision for Revenue Legislation Amendment Act 2018 Retrospective application of increased rebate under ss 27A, 35A and 43A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Transitional provision for Revenue and Other Legislation Amendment Act 2018 Retrospective operation of amended s 13Y . . . . . . . . . . . . . . . . 169 Dictionary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Page 9
Not authorised— indicative only
Payroll Tax Act 1971 Payroll Tax Act 1971 Part 1 Preliminary [s 1] An Act to impose a tax upon employers in respect of certain wages Not authorised —indicative only Part 1 Preliminary 1 Short title This Act may be cited as the Payroll Tax Act 1971 . 2 Dictionary The dictionary in the schedule defines particular words used in this Act. 3 Meaning of superannuation contribution (1) A superannuation contribution is a monetary or non-monetary contribution paid or payable by an employer for an employee, or by a company for a director of the company— (a) as a superannuation guarantee charge under the Superannuation Guarantee Act; or (b) to a superannuation fund under the Superannuation Industry (Supervision) Act 1993 (Cwlth); or (c) to another form of superannuation, provident or retirement fund or scheme, including, for example, the following— Current as at [Not applicable] Page 11
Not authorised —indicative only Payroll Tax Act 1971 Part 1 Preliminary [s 3A] (i) a retirement savings account under the Retirement Savings Accounts Act 1997 (Cwlth); (ii) a wholly or partly unfunded fund or scheme. Examples of non-monetary contribution— 1 marketable securities 2 real property (2) In this section— Superannuation Guarantee Act means the Superannuation Guarantee (Administration) Act 1992 (Cwlth). superannuation guarantee charge does not include the following— (a) an additional superannuation guarantee charge under section 49 or part 7 of the Superannuation Guarantee Act; (b) the part of a superannuation guarantee charge equal to a superannuation contribution mentioned in subsection (1)(b) or (c) that is payable, and for which payroll tax has been paid to the commissioner, to the extent the contribution would have resulted in a reduction in the charge percentage under section 23 of the Superannuation Guarantee Act if the contribution had been paid. unfunded , for a superannuation, provident or retirement fund or scheme, means the extent that an amount paid or payable by an employer for an employee, or by a company for a director of the company, covered by the fund or scheme is not paid or payable while the employee is employed by the employer, or the director is appointed as a director of the company. 3A Meaning of termination payment (1) A termination payment is— Page 12 Current as at [Not applicable]
Payroll Tax Act 1971 Part 1 Preliminary [s 3A] Not authorised —indicative only (a) any of the following payments made because of the retirement from, or termination of, any office or employment of an employee— (i) an unused annual leave payment under the Income Tax Assessment Act 1997 (Cwlth), section 83-10; (ii) an unused long service leave payment under the Income Tax Assessment Act 1997 (Cwlth), section 83-75; (iii) so much of an employment termination payment paid or payable by an employer, whether paid or payable to the employee or to another entity, that would be included in the assessable income of the employee under the Income Tax Assessment Act 1997 (Cwlth), chapter 2, part 2-40 if the whole employment termination payment had been paid to the employee; or (b) a following amount, if the amount would be an employment termination payment had it been paid or payable because of termination of employment— (i) an amount paid or payable by a company because of the termination of the services or office of a director of the company, whether paid or payable to the director or another entity; (ii) an amount paid or payable by a relevant contract employer because of the termination of the supply of the services of an employee under a relevant contract, whether paid or payable to the employee or another entity. (2) In this section— employment termination payment means— (a) an employment termination payment under the Income Tax Assessment Act 1997 (Cwlth), section 82-130; or (b) a payment that is not an employment termination payment under the Income Tax Assessment Act 1997 (Cwlth), section 82-130 only because it is received later Current as at [Not applicable] Page 13
Not authorised —indicative only Payroll Tax Act 1971 Part 1 Preliminary [s 4] than 12 months after the termination of a person’s employment; or (c) a transitional termination payment under the Income Tax (Transitional Provisions) Act 1997 (Cwlth), section 82-10. 4 Other provisions about meaning of wages superannuation contributions and GST (1) This section applies for the definition of wages in the schedule. Note— Part 2, divisions 1A to 1D contain other provisions that apply for the definition wages . (2) For paragraph (g) of the definition, a superannuation contribution paid or payable by an employer for an employee on or after 1 January 2000 is taken to be for the employee’s services performed or rendered on or after 1 January 2000. (3) However, if the commissioner is satisfied any part of a superannuation contribution mentioned in subsection (2) is for an employee’s services performed or rendered before 1 January 2000, the part is not wages. (4) Also, for paragraph (g) of the definition— (a) a superannuation contribution paid or payable by an employer to a superannuation, provident or retirement fund or scheme and not attributed by the employer as paid or payable for a particular employee or particular employees is taken to be paid or payable for the employee or employees decided by the commissioner; and (b) a superannuation contribution paid on or after 14 September 1999 and before 1 January 2000 for an employee’s services to be performed or rendered on or after 1 January 2000 is taken to be paid on 1 January 2000. Page 14 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 1 Preliminary [s 5] (5) For this Act, the amount or value of wages paid or payable to a person must be reduced by the relevant proportion of the amount of any GST paid or payable by the person on the supply to which the wages relate. (6) In this section— relevant proportion , for GST paid or payable on a supply to which wages relate, means the proportion that the amount or value of the wages bears to the consideration for the supply to which the wages relate. 5 Meaning of change of status (1) A change of status happens for a person who is an employer if, during a financial year— (a) the person ceases to be an employer and does not intend to resume being an employer during the remainder of the year or the next financial year; or Example for paragraph (a)— There is no change of status for a fruit grower who ceases to pay wages after the fruit picking season but intends to resume paying wages later in the financial year or in the next financial year. (b) for a person who pays, or is liable to pay, taxable wages and who is not a group member—the person becomes a group member; or (c) for a person who pays, or is liable to pay, wages and is a non-DGE group member— (i) the person starts paying, or becomes liable to pay, taxable wages other than as a group member; or (ii) the person becomes the DGE for a group; or (d) the person ceases to be the DGE for a group; or (e) an administrator is appointed for the property of the person; or (f) the appointment of an administrator for the person’s property ceases to have effect. Current as at [Not applicable] Page 15
Not authorised —indicative only Payroll Tax Act 1971 Part 1 Preliminary [s 5] (2) A change of status happens— (a) if subsection (1)(a) applies—on the first day the person— (i) does not pay, and is not liable to pay, wages; and (ii) does not intend to resume paying wages for the remainder of the year or the next financial year; or (b) if subsection (1)(b) applies—on the first day the person is a group member; or (c) if subsection (1)(c)(i) applies—on the first day the person pays, or is liable to pay, taxable wages other than as a group member; or (d) if subsection (1)(c)(ii) applies—on the first day of the periodic return period in which the person becomes the DGE for the group; or Note— See also section 75(1) and (2). (e) if subsection (1)(d) applies— (i) if all the group members cease to pay, or be liable to pay, wages as members of the group during the relevant periodic return period on or before the day the person ceases to be the DGE for the group—on the first day the person is not the DGE for the group; or (ii) otherwise—on the first day of the relevant periodic return period; or Note— See also section 75(3). (f) if subsection (1)(e) applies—on the day the administrator is appointed; or (g) if subsection (1)(f) applies—on the day after the appointment ceases to have effect. Page 16 Current as at [Not applicable]
Payroll Tax Act 1971 Part 1 Preliminary [s 6] (3) For subsection (2)(e), the relevant periodic return period is the periodic return period in which the person ceases to be the DGE for the group. Note— An employer who changes status is required to lodge a final return, and pay payroll tax, for the final period. Not authorised —indicative only 6 Meaning of final period The final period , for a change of status of a person (the relevant change of status ) happening during a financial year, means the period— (a) starting on the latest of the following days in the year— (i) 1 July; (ii) the first day on which the person is required to register as an employer under part 3, division 1; (iii) if an earlier change of status has happened for the person during the year—the day of the change of status happening immediately before the relevant change of status; and (b) ending on the day before the relevant change of status happens. Example— An employer who is a group member from 1 July in a financial year ceases to be a group member on 1 September. The final period for the change of status is 1 July to 31 August. If the employer then ceases to pay, or be liable to pay, wages from 1 June, the final period for the second change of status is 1 September to 31 May. 6A Reference to periodic return period or return period Despite section 59(1A), a reference in this Act, other than section 59(1), to a periodic return period or return period in relation to an employer is taken to include the last periodic return period of a financial year for the employer. Current as at [Not applicable] Page 17
Not authorised —indicative only Payroll Tax Act 1971 Part 1 Preliminary [s 7] 7 Notes in text A note in the text of this Act is part of the Act. 8 Relationship of Act with Administration Act (1) This Act does not contain all the provisions about payroll tax. (2) The Administration Act contains provisions dealing with, among other things, each of the following— (a) assessments of tax; (b) payments and refunds of tax; (c) imposition of interest and penalty tax; (d) objections and appeals against, or reviews of, assessments of tax; (e) record keeping obligations of taxpayers; (f) investigative powers, offences, legal proceedings and evidentiary matters; (g) service of documents; (h) registration of charitable institutions. Note— Under the Administration Act, section 3, that Act and this Act must be read together as if they together formed a single Act. Page 18 Current as at [Not applicable]
Part 2 Payroll Tax Act 1971 Part 2 Liability to taxation [s 8A] Liability to taxation Not authorised —indicative only Division 1 Imposition of liability Subdivision 1 Wages liable to payroll tax 8A Application of sdiv 1 (1) This subdivision applies for working out the wages paid or payable by an employer for services performed or rendered by a person that are liable to payroll tax under this Act. (2) If wages are paid or payable for a person other than an employee, a reference to an employee in this subdivision includes a reference to the person. 9 Wages liable to payroll tax—nexus with Queensland (1) Wages are liable to payroll tax under this Act if— (a) the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely in Queensland; or (b) the wages are paid or payable by an employer in relation to services performed or rendered by an employee in 2 or more States, or partly in at least 1 State and partly outside all States, and— (i) the employee is based in Queensland; or (ii) if the employee is not based in a State—the employer is based in Queensland; or (iii) if both the employee and the employer are not based in a State—the wages are paid or payable in Queensland; or (iv) if both the employee and the employer are not based in a State and the wages are not paid or payable in a State—the wages are paid or payable Current as at [Not applicable] Page 19
Payroll Tax Act 1971 Part 2 Liability to taxation [s 9] Not authorised —indicative only for services performed or rendered mainly in Queensland; or (c) the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely outside all States and are paid or payable in Queensland. Note— Section 15A provides an exemption for wages paid or payable for services performed entirely in another country for a continuous period of more than 6 months. (2) Subject to subsections (4) and (5), the question of whether wages are liable to payroll tax under this Act must be decided by reference only to the services performed or rendered by the employee for the employer during the month in which the wages are paid or payable. (3) Wages paid or payable by an employer for an employee in a particular month are taken to be paid or payable in relation to the services performed or rendered by the employee for the employer during the month. Example— If wages paid in a month are paid to an employee for services performed or rendered over several months, the question of whether the wages are liable to payroll tax under this Act must be decided by reference only to the services performed or rendered by the employee in the month the wages are paid. The services performed or rendered in previous months are disregarded. However, the services performed or rendered in previous months are relevant to the question of whether wages paid in the previous months are liable to payroll tax under this Act. (4) If no services are performed or rendered by an employee for an employer during the month in which wages are paid or payable in relation to the employee— (a) the question of whether the wages are liable to payroll tax under this Act must be decided by reference only to the services performed or rendered by the employee for the employer during the most recent earlier month in which the employee performed or rendered services for the employer; and Page 20 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 9A] (b) the wages are taken to be paid or payable in relation to the services performed or rendered by the employee for the employer in that most recent earlier month. (5) If no services were performed or rendered by an employee for an employer during the month in which wages are paid or payable in relation to the employee or in any earlier month— (a) the wages are taken to be paid or payable in relation to services performed or rendered by the employee in the month in which the wages are paid or payable; and (b) the services are taken to have been performed or rendered at a place where it may reasonably be expected that the services of the employee for the employer will first be performed. (6) All amounts of wages paid or payable in the same month by the same employer for the same employee must be aggregated for deciding whether the wages are liable to payroll tax under this Act. Example— If 1 amount of wages is paid by an employer in a particular month in relation to services performed or rendered in Queensland, and another amount of wages is paid by the same employer in the same month in relation to services performed or rendered by the same employee in another State, the wages paid must be aggregated as if they were paid or payable in relation to all services performed or rendered by the employee in that month. Subsection (1)(b) would be applied to decide whether the wages are liable to payroll tax under this Act. (7) If wages are paid in a different month from the month in which they are payable, the question of whether the wages are liable to payroll tax under this Act must be decided by reference to the earlier of the relevant months. 9A State in which employee is based (1) For this Act, the State in which an employee is based is the State in which the employee’s principal place of residence is located. Current as at [Not applicable] Page 21
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 9B] (2) The State in which an employee is based must be decided by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (3) If more than 1 State would qualify as the State in which an employee is based during a month, the State in which the employee is based must be decided by reference to the state of affairs existing on the last day of that month. (4) An employee who does not have a principal place of residence is taken, for this Act, to be an employee who is not based in a State. (5) If wages are paid or payable to a corporate employee, the State in which the corporate employee is based must be worked out under section 9B instead of this section, as if a reference in section 9B to an employer were a reference to the employee. (6) In this section— corporate employee means a company— (a) taken to be an employee under section 13D or 13I; or (b) to whom a payment is made that is taken to be wages under section 13L or 50. 9B State in which employer is based (1) For this Act, the State in which an employer is based is— (a) if the employer has an ABN—the State in which the employer’s registered business address is located; or (b) otherwise—the State in which the employer’s principal place of business is located. (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— (a) if the trust has an ABN—the registered business address of the trust; or Page 22 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 9C] (b) otherwise—the registered business address of the trustee of the trust. (3) If an employer has 2 or more registered business addresses located in different States at the same time, the State in which the employer is based at that time is the State in which the employer’s principal place of business is located. (4) The State in which an employer is based must be decided by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (5) If more than 1 State would qualify as the State in which an employer is based in a month, the State in which the employer is based must be decided by reference to the state of affairs existing on the last day of that month. (6) An employer who has neither a registered business address nor a principal place of business is taken, for this Act, to be an employer who is not based in a State. (7) In this section— ABN means an ABN (Australian Business Number) under the A New Tax System (Australian Business Number) Act 1999 (Cwlth). registered business address means an address for service of notices under the A New Tax System (Australian Business Number) Act 1999 (Cwlth) as shown in the Australian Business Register kept under that Act. 9C Place and day of payment of wages (1) For this Act, wages are taken to have been paid at a place if, for the payment of the wages— (a) an instrument is sent or given or an amount is transferred by an employer to a person or a person’s agent at the 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 at the place. Current as at [Not applicable] Page 23
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 9C] (2) The wages are taken to have been paid on the day the instrument was sent or given, the amount was transferred, or the account was credited. (3) Subject to subsection (4), wages are taken to be payable at the place they are paid. (4) Wages that are not paid by the end of the month in which they are payable are taken to be payable at— (a) the place where wages were last paid by the employer for the employee; or (b) if wages have not previously been paid by the employer for the employee—the place where the employee last performed or rendered services for the employer before the wages became payable. (5) If wages paid or payable in the same month by the same employer for the same employee are paid or payable in more than 1 State, the wages paid or payable in that month are taken to be paid or payable in the State in which the highest proportion of the wages are paid or payable. Note— Section 9 requires all wages paid or payable in the same month by the same employer for the same employee to be aggregated for deciding whether the wages are liable to payroll tax under this Act. Subsection (5) ensures only 1 State can be considered to be the State in which the wages are paid or payable. (6) This section is subject to section 13W. (7) In this section— instrument includes a cheque, bill of exchange, promissory note, money order, postal order issued by a post office or any other instrument. Page 24 Current as at [Not applicable]
Subdivision 2 Payroll Tax Act 1971 Part 2 Liability to taxation [s 10] Other provisions about imposing liability for payroll tax Not authorised —indicative only 10 Imposition of payroll tax on taxable wages Subject to, and in accordance with, the provisions of this Act, there shall be charged, levied and paid for the use of Her Majesty on all taxable wages payroll tax at the following rate of the wages— (a) for wages paid or payable in the financial year ending 30 June 2002—4.8%; (b) for wages paid or payable in a later financial year— 4.75%. 11 When liability for payroll tax arises A liability for payroll tax imposed on taxable wages arises on the return date for lodgement by an employer of a return. 12 Employer to pay payroll tax Payroll tax shall be paid by the employer by whom the taxable wages are paid or payable. 13 Value of taxable wages (1) The value of taxable wages that are paid or payable in kind (other than fringe benefits under the Fringe Benefits Assessment Act) is the value under the regulations. (2) The employer must give evidence of the value of the taxable wages to the commissioner if asked by the commissioner. (3) If the commissioner is not satisfied with the evidence given by the employer, the commissioner may appoint a person to value the taxable wages. (4) If the value stated by the person appointed under subsection (3) is more than the value stated by the employer, Current as at [Not applicable] Page 25
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13A] the commissioner may claim all or part of the valuation costs from the employer. (5) The value of taxable wages comprising a fringe benefit under the Fringe Benefits Assessment Act is, unless otherwise prescribed by regulation, the value worked out using the following formula— V= TV x 1/(1 FBT rate) where— FBT rate means the rate of fringe benefits tax imposed under the Fringe Benefits Assessment Act that applies when the employer’s liability for payroll tax on the taxable wages arises. TV means— (a) if paragraph (b) does not apply—the value that would be the taxable value of the taxable wages as a fringe benefit for the Fringe Benefits Assessment Act; or (b) if the fringe benefit is an amortised fringe benefit under the Fringe Benefits Assessment Act, section 65CA—the amortised amount of the benefit calculated under that section. V means the value of the taxable wages. (6) This section does not apply to taxable wages comprising the grant of a share or option to which division 1C applies. Note— See section 13U (Value of taxable wages). Division 1A Contractor provisions 13A Definitions for div 1A In this division— contract includes an agreement, arrangement or undertaking, whether formal or informal and whether express or implied. Page 26 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13B] relevant contract employee see section 13D(2). re-supply , in relation to goods acquired from a person, includes— (a) supply to the person, or, if the person is a member of a group, to another group member, the acquired goods in an altered form or condition; and (b) supply to the person, or, if the person is a member of a group, to another group member, other goods in which the acquired goods have been incorporated. services includes results, whether goods or services, of work performed. supply includes— (a) supply by way of sale, exchange, lease, hire, or hire purchase; and (b) in relation to services, includes the providing, granting or conferring of services. 13B Meaning of relevant contract (1) A relevant contract is a contract under which a person (the designated person ), in the course of a business carried on by the designated person— (a) supplies to another person services in relation to the performance of work; or (b) has supplied to the designated person the services of persons in relation to the performance of work; or (c) gives goods to individuals for work to be performed by those individuals in respect of the goods and for the goods to be re-supplied. (2) However, a relevant contract does not include a contract of service or a contract under which a person (the designated person ), in the course of a business carried on by the designated person— Current as at [Not applicable] Page 27
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13B] Not authorised —indicative only Page 28 (a) is supplied with services in relation to the performance of work, if the services are ancillary to— (i) the supply of goods under the contract by the person by whom the services are supplied; or (ii) the use of goods that are the property of the person by whom the services are supplied; or (b) is supplied with services in relation to the performance of work, if— (i) the services are of a kind not ordinarily required by the designated person and are performed or rendered by a person who ordinarily performs or renders services of that kind to the public generally; or (ii) the services are of a kind ordinarily required by the designated person for less than 180 days in a financial year; or (iii) the services are provided for a period that does not exceed 90 days or for periods that, in the aggregate, do not exceed 90 days in the relevant financial year and are not services— (A) provided by a person by whom similar services are provided to the designated person; or (B) in relation to the performance of work where any of the persons who perform the work also perform similar work for the designated person; for periods that, in the aggregate, exceed 90 days in the relevant financial year; or (iv) the services are supplied under a contract to which subparagraphs (i) to (iii) do not apply and the commissioner is satisfied the services are performed or rendered by a person who ordinarily performs or renders services of that kind to the public generally in the relevant financial year; or Current as at [Not applicable]
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13B] Not authorised —indicative only (c) is supplied by a person (the contractor ) with services in relation to the performance of work under a contract to which paragraphs (a) and (b) do not apply, if the work to which the services relate is performed— (i) by 2 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (ii) if the contractor is a partnership of 2 or more individuals—by 1 or more of the members of the partnership and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (iii) if the contractor is an individual—by the contractor and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (d) is supplied with— (i) services solely for or ancillary to the conveyance of goods by means of a vehicle provided by the person conveying them; or (ii) services solely in relation to the procurement of persons desiring to be insured by the designated person; or (iii) services in relation to the door-to-door sale of goods solely for domestic purposes on behalf of the designated person. (3) For subsection (2)(b), relevant financial year means the financial year during which the designated person is supplied with the services. (3A) Subsection (2)(a), (b), (c) or (d) does not apply to a contract under which any additional services or work of a kind not covered by the relevant subsection is supplied or performed. (4) Subsection (2) does not apply if the commissioner is satisfied the contract or arrangement under which the services are Current as at [Not applicable] Page 29
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13C] supplied was entered into with an intention either directly or indirectly of avoiding the payment of tax by any person. (5) An employment agency contract under which services are supplied by an employment agent, or a service provider is procured by an employment agent, is not a relevant contract. 13C Persons taken to be employers (1) For this Act, a person is taken to be an employer if, under a relevant contract— (a) the person supplies services to another person; or (b) the services of other persons are supplied to the person in relation to the performance of work; or (c) the person gives goods to individuals. (2) However, if a contract is a relevant contract under both section 13B(1)(a) and (b)— (a) the person to whom, under the contract, the services of persons are supplied in relation to the performance of work is taken to be an employer; and (b) despite subsection (1)(a), the person who, under the contract, supplies the services is not taken to be an employer. (3) A person taken to be an employer under this section is a relevant contract employer . 13D Persons taken to be employees (1) For this Act, a person is taken to be an employee if, under a relevant contract— (a) the person performs work in relation to which services are supplied to another person; or (b) the person is an individual who re-supplies goods to an employer. Page 30 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13E] (2) A person taken to be an employee under this section is a relevant contract employee . 13E Amounts taken to be wages (1) For this Act, the following amounts paid or payable by a relevant contract employer under a relevant contract are taken to be wages— (a) amounts in relation to the performance of work for which services are supplied on or after 1 July 2008 under a relevant contract; (b) amounts in relation to the performance of work relating to the re-supply of goods by a relevant contract employee under a relevant contract on or after 1 July 2008. Note— Under section 132, this section applies only in relation to wages paid or payable on or after 1 July 2008. (2) Subsection (1)(a) is taken to include the following, to the extent the following do not otherwise comprise wages under this Act— (a) a payment— (i) made by the relevant contract employer in relation to a relevant contract employee; and (ii) that would be a superannuation contribution if it were made in relation to a person in the capacity of an employee; (b) the value of a share or option— (i) granted or liable to be granted by a relevant contract employer in relation to a relevant contract employee; and (ii) that would comprise wages under this Act if the share or option were granted in relation to a person in the capacity of an employee. Current as at [Not applicable] Page 31
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13F] (3) For subsection (1), an amount paid or payable on or after 1 July 2008 for the performance of work under a relevant contract is taken to be for services supplied, or goods re-supplied, on or after 1 July 2008. (4) However, if the commissioner is satisfied any part of an amount mentioned in subsection (3) is for services supplied, or goods re-supplied, before 1 July 2008, the part is not wages. (5) If an amount mentioned in subsection (1) is included in a larger amount paid or payable by the relevant contract employer under the relevant contract, the part of the larger amount that is not attributable to the performance of work mentioned in subsection (1)(a) or (b) is the part decided by the commissioner. 13F Liability for payroll tax for payments taken to be wages (1) If a relevant contract employer pays payroll tax on wages comprising a payment (the primary payment ) in relation to the performance of work— (a) no other person is liable for payroll tax on the primary payment; and (b) another person who is liable to pay wages comprising a payment (a secondary payment ) in relation to the work is not liable for payroll tax on the secondary payment. (2) Subsection (1)(b) does not apply if the commissioner is satisfied either the secondary payment or the primary payment is made with an intention either directly or indirectly of avoiding the payment of tax by the relevant contract employer or another person. Page 32 Current as at [Not applicable]
Division 1B Payroll Tax Act 1971 Part 2 Liability to taxation [s 13G] Employment agents Not authorised —indicative only 13G Meaning of employment agency contract (1) An employment agency contract is a contract under which a person (an employment agent ) procures the services of another person (a service provider ) for a client of the employment agent. (2) However, a contract is not an employment agency contract if it is, or results in the creation of, a contract of employment between the service provider and the client. (3) Subsection (1) applies to a contract whether it is formal or informal, express or implied. (4) For this section— contract includes agreement, arrangement and undertaking. 13H Persons taken to be employers For this Act, the employment agent under an employment agency contract is taken to be an employer. 13I Persons taken to be employees For this Act, the person who performs work in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent under the contract. 13J Amounts taken to be wages (1) For this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract— (a) an amount paid or payable in relation to the service provider in respect of the provision of services in connection with the contract; Current as at [Not applicable] Page 33
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13K] (b) the value of a benefit provided in relation to the provision of services in connection with the contract that would be a fringe benefit if provided to a person in the capacity of an employee; (c) a payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee. (2) However, subsection (1) does not apply to an amount, benefit or payment mentioned in the subsection if— (a) the amount, benefit or payment would be exempt from payroll tax under division 2, other than section 14(2)(j), (k) or (l) or 14A, if it had been paid or provided by the client in relation to the service provider as an employee; and (b) the client has given the employment agent a declaration, in the approved form, that subsection (1) does not apply to the amount, benefit or payment. 13K Liability for payroll tax for payments taken to be wages (1) This section applies if an employment agent— (a) under an employment agency contract, procures the services of a service provider for a client of the agent; and (b) pays payroll tax on an amount, benefit or payment mentioned in section 13J(1) that is paid or payable by the employment agent in connection with that contract. (2) No other person, including another person engaged to procure the services of the service provider for the employment agent’s client, is liable for payroll tax on wages paid or payable for the procurement or performance of services by the service provider for the client. (3) This section applies subject to sections 13L and 13LA. Page 34 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13L] 13L Employment agency contract reducing or avoiding liability to payroll tax (1) If the effect of an employment agency contract is to reduce or avoid the liability of a party to the contract to the assessment, imposition or payment of payroll tax, the commissioner may— (a) disregard the contract; and (b) determine that any party to the contract is taken to be an employer for this Act; and (c) determine that any payment made in respect of the contract is taken to be wages for this Act. (2) If the commissioner makes a determination under subsection (1), the commissioner must give written notice of the determination to the person taken to be an employer for the purposes of this Act. (3) The notice must state the facts on which the commissioner relies and the reasons for making the determination. 13LA Particular avoidance arrangements involving employment agents (1) This section applies if— (a) an avoidance arrangement exists in relation to an employment agency in a return period; and (b) the assumed non-adjusted tax for the period is less than the assumed adjusted tax for the period. (2) If this section applies in a return period, for the period— (a) if the avoidance arrangement involves an employment agent acting as trustee for a client of the employment agent under a trust or acting as agent for a client of the employment agent under an employment agency contract—section 92(1) does not apply to the trustee or agent, or in relation to the trust or employment agency contract; and Current as at [Not applicable] Page 35
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13LA] Not authorised —indicative only (b) if the avoidance arrangement involves a client of an employment agent acquiring, or clients of an employment agent jointly acquiring, a controlling interest in the business of the employment agent referable to the client or clients—the client or clients is or are taken not to have the controlling interest; and (c) the employment agent, or each employment agent, involved in the employment agency is answerable as an employer for doing everything required to be done under this Act for the payment of wages by the employment agent that are subject to payroll tax under this Act (including the giving of returns and payment of payroll tax); and (d) if the employment agency involves more than 1 employment agent—the employment agents constitute a group. (3) For this section, a client has, or clients have, a controlling interest in a business if the client has, or the clients have, a controlling interest in the business under section 71. (4) In subsection (1)— (a) a reference to the assumed non-adjusted tax for a return period is a reference to the total amount of payroll tax that would be payable by the employment agent or agents involved in the employment agency for the period if the amount were calculated without applying any resultant provision; and (b) a reference to the assumed adjusted tax for a return period is a reference to the total amount of payroll tax that would be payable by the employment agent or agents involved in the employment agency for the period if the amount were calculated applying each relevant resultant provision. (5) To remove any doubt about the application of subsection (4)(b), it is declared that if an employment agency is involved in more than 1 avoidance arrangement in a return period, subsection (4)(b) is to be applied by first applying each relevant resultant provision to each avoidance Page 36 Current as at [Not applicable]
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13LA] Not authorised —indicative only arrangement and then calculating the total amount for the subsection. (6) In this section— avoidance arrangement means an arrangement involving an employment agency if the arrangement involves 1 or more of the following— (a) an employment agent acting as trustee for a client of the employment agent under a trust; (b) an employment agent acting as agent for a client of the employment agent under an employment agency contract; (c) a client of an employment agent acquiring, or clients of an employment agent jointly acquiring, a controlling interest in the business of the employment agent referable to the client or clients. client includes an individual or company that— (a) under the Duties Act 2001 , section 164, is a related person of the client; or (b) is related to the client in another way prescribed under a regulation. employment agency means a business enterprise involving— (a) the business of an employment agent; or (b) the businesses of 2 or more employment agents. employment agency contract see the definition employment agent for this section. employment agent means a person who, by a contract, agreement, arrangement or undertaking (the employment agency contract ), procures the services of another person (the worker ) for a client of the agent, if the employment agency contract is not, and does not result in the creation of, a contract of employment between the worker and the client. resultant provision means subsection (2), paragraph (a), (b), (c) or (d). Current as at [Not applicable] Page 37
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13M] return period means— (a) for an employment agent who is required to lodge periodic returns—a periodic return period or financial year; or (b) for an employment agent who is exempt under section 62 from lodging periodic returns—a financial year. Division 1C Shares and options 13M Application of div 1C This division applies for paragraphs (j) and (k) of the definition of wages in the schedule. 13N Definitions for div 1C In this division— director , of a company, includes— (a) a person who, under a contract or other arrangement, is to be appointed as a director of the company; and (b) a former director of the company. granted , in relation to a share or option, see section 13O. grantee , in relation to a grant of a share or option comprising wages for this Act, means the employee or director to whom the share or option is granted. grantor , in relation to a grant of a share or option comprising wages for this Act, means the employer or company by whom the share or option is granted. relevant day see section 13Q(2). vesting day see section 13R(2). Page 38 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13O] 13O When share or option is granted (1) A share is granted to a person if— (a) another person transfers the share to the person, other than by issuing the share to the person; or (b) another person allots the share to the person; or (c) the requirements for the grant of a share prescribed under a regulation are satisfied. (2) An option is granted to a person if— (a) another person transfers the right to the share to which the option relates to the person; or (b) another person creates the right to the share to which the option relates in the person; or (c) the requirements for the grant of an option prescribed under a regulation are satisfied. (3) Also, a share or an option is granted to a person if— (a) the person acquires a legal interest in the share or right from another person other than in a way mentioned in subsection (1) or (2); or (b) the person acquires a beneficial interest in the share or option from another person. 13P Grant of share because of exercise of option Despite paragraphs (j) and (k) of the definition of wages in the schedule, the grant of a share by a grantor does not comprise wages if— (a) the grantor is required to grant the share because a person has exercised an option; and (b) either— (i) the grant of the option to the person comprises wages for this Act; or (ii) the option was granted to the person before 1 July 2008. Current as at [Not applicable] Page 39
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13Q] 13Q Day on which wages are paid or payable (1) Wages comprising the grant of a share or option are taken to be paid or payable on the relevant day. (2) The relevant day is the day the grantor elects under this division to treat as the day on which the wages comprising the grant of the share or option are paid or payable. Not authorised —indicative only 13R Election by grantor of relevant day (1) A grantor may elect to treat either of the following as the day on which wages comprising the grant of a share or option are paid or payable— (a) the day the share or option is granted to the grantee; (b) the vesting day for the share or option. (2) The vesting day (a) for a share—is the first of the following days— (i) the day the share vests in the grantee; (ii) the day that is 7 years after the day the share is granted to the grantee; or (b) for an option—is the first of the following days— (i) the day the share to which the option relates is granted to the grantee; (ii) the day the grantee exercises a right under the option to have the share to which it relates transferred or allotted to, or vest in, the grantee; (iii) the day that is 7 years after the day the option is granted to the grantee. (3) For subsection (2), a share vests in the grantee when— (a) any conditions applying to the grant of the share have been met; and (b) the grantee’s legal or beneficial interest in the share can not be rescinded. Page 40 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13S] 13S Automatic election of relevant day (1) This section applies if a grantor grants a share or option to a grantee and any of the following applies— (a) the value of the grant of the share or option is not included in the taxable wages paid or payable by the grantor for a return period during which the share or option is granted; (b) the value of the taxable wages comprising the grant of the share or option is nil; (c) if the grantor were to elect to treat the day the share or option is granted as the relevant day, the wages would not be liable to payroll tax. (2) If subsection (1)(a) applies, the grantor is taken to have elected to treat the vesting day for the share or option as the day on which the wages comprising the grant of the share or option are paid or payable. (3) If subsection (1)(b) or (c) applies, the grantor is taken to have elected to treat the day the share or option is granted as the day on which the wages comprising the grant of the share or option are paid or payable. (4) This section applies despite section 13R. 13T Effect of rescission or cancellation of share or option (1) If, before the vesting day, the grant of a share or option is withdrawn, cancelled or exchanged for consideration other than the grant of other shares or options— (a) the date of the withdrawal, cancellation or exchange is taken to be the vesting day for the share or option; and (b) despite section 13U(1)(a), the market value of the share or option on the vesting day is taken to be the amount of the consideration. (2) A grantor must reduce, by the relevant amount, the taxable wages paid or payable by the grantor for a financial year or final period, if— Current as at [Not applicable] Page 41
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13U] (a) the grantor included the value of a grant of a share or option in the taxable wages paid or payable by the grantor for a periodic return period falling in the financial year or final period; and (b) the grant is rescinded, during the financial year or final period, because the conditions of the grant were not met. (3) The commissioner must make a reassessment of a grantor’s liability for payroll tax for a financial year or final period, to reduce the taxable wages of the grantor by the relevant amount, if— (a) the grantor included the value of a grant of a share or option in the taxable wages paid or payable by the grantor for the financial year or final period; and (b) the grant is rescinded, after the end of the financial year or final period, because the conditions of the grant were not met. (4) For subsections (2) and (3), the relevant amount is the value of the grant of a share or option previously included in the taxable wages of the grantor under subsection (2)(a) or (3)(a). (5) Subsections (2) and (3) do not apply only because the grantee fails to exercise an option or otherwise exercise the grantee’s rights in relation to a share or option. 13U Value of taxable wages (1) The value of taxable wages comprising the grant of a share or option is taken to be the amount equal to— (a) the value, in Australian currency, of the share or option on the relevant day; less (b) any consideration paid or given by the grantee for the share or option, other than consideration in the form of services performed. (2) For subsection (1)(a), the value of a share or option is— Page 42 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13V] (a) the amount worked out under the regulations made under the Income Tax Assessment Act 1997 (Cwlth), section 83A-315, as applied by subsection (3); or Note— See the Income Tax Assessment Regulations 1997 (Cwlth), division 83A. (b) if paragraph (a) does not apply—the market value of the share or option. (3) For working out the value of a share or option under subsection (2)(a), the regulations mentioned in that subsection apply with the following changes— (a) the value of an option is worked out as if it were a right to acquire a beneficial interest in a share; (b) a reference to the acquisition of a beneficial interest in a share or right is taken to be a reference to the grant of a share or option; (c) with any other necessary changes. (4) In working out the market value of a share or option, anything that would prevent or restrict conversion of the share or option to money must be disregarded. (5) An employer must give evidence of the value of a share or option to the commissioner if asked by the commissioner. (6) If the commissioner is not satisfied with the evidence given by the employer under subsection (5), the commissioner may appoint a person to value the share or option. (7) If the value stated by the person appointed under subsection (6) is more than the value stated by the employer, the commissioner may claim all or part of the valuation costs from the employer. 13V When services are performed (1) Wages comprising 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, Current as at [Not applicable] Page 43
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13W] are taken to be paid or payable for services performed or rendered during the month in which the relevant day falls. (2) Wages comprising the grant of a share or option to which subsection (1) does not apply are taken to be paid or payable for services performed or rendered during the month in which the relevant day falls. 13W Place where wages are paid or payable (1) Wages comprising the grant of a share or option are taken to be paid or payable in Queensland if— (a) for a share—the share is in a local company; or (b) for an option—the option is an option to acquire a share in a local company. (2) If subsection (1) does not apply, wages comprising the grant of a share or option are taken to be paid or payable elsewhere than in Queensland. (3) Subsection (4) applies to wages comprising 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 or rendered. (4) The wages are taken to be paid or payable for services performed or rendered in the place or places where it may reasonably be expected the services of the director for the company will be performed or rendered. (5) In this section— local company means— (a) a company that is— (i) registered or taken to be registered under the Corporations Act; and (ii) taken to be registered in Queensland for that Act; or (b) another body corporate incorporated under an Act. Page 44 Current as at [Not applicable]
Not authorised —indicative only Division 1D Allowances Payroll Tax Act 1971 Part 2 Liability to taxation [s 13X] Subdivision 1 Motor vehicle allowances 13X Definitions for sdiv 1 In this subdivision— averaging method means the method described in section 13ZB. averaging period see section 13ZD(1). business journey means— (a) a journey undertaken in a motor vehicle by a person, other than for applying the vehicle for a use that— (i) is a private use; and (ii) if the person is paid a motor vehicle allowance for the use—results in a fringe benefit under the Fringe Benefits Assessment Act being provided by the employer; or (b) a journey undertaken in a motor vehicle by a person in the course of producing assessable income of the person under the Income Tax Assessment Act 1936 (Cwlth). business vehicle , of an employee, means a motor vehicle provided or maintained by the employee for undertaking business journeys. continuous recording method means the method described in section 13ZA. number of exempt kilometres see section 13Y(4), definition K . relevant percentage see section 13ZB(4). Current as at [Not applicable] Page 45
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13Y] 13Y Exempt component of motor vehicle allowance (1) For this Act, a reference to wages, in relation to a return period, does not include a reference to the exempt component of a motor vehicle allowance paid or payable to an employee for the period. (2) If the total motor vehicle allowance paid or payable to an employee for a return period is not more than the exempt component of the allowance, the allowance does not comprise wages for this Act. (3) If the total motor vehicle allowance paid or payable to an employee for a return period is more than the exempt component for the allowance, if any, only the amount of the allowance exceeding the exempt component comprises wages for this Act. (4) The exempt component of a motor vehicle allowance paid or payable to an employee for a business vehicle for a return period is the amount worked out using the following formula— E= KxR where— E means the exempt component. K means the number of exempt kilometres travelled by the vehicle during the return period, worked out under section 13Z (the number of exempt kilometres ). R means— (a) the rate determined under the Income Tax Assessment Act 1997 (Cwlth), section 28-25(4) for calculating a deduction for car expenses using the ‘cents per kilometre’ method for the financial year immediately preceding the financial year in which the allowance is paid or payable; or (b) if there is no rate under paragraph (a)—the rate prescribed by regulation. Page 46 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13Z] 13Z Working out the number of exempt kilometres (1) For section 13Y(4), the number of exempt kilometres must be worked out using either of the following chosen by the employer— (a) the continuous recording method; (b) the averaging method. Note— See section 13ZG (Switching between continuous recording and averaging methods) for requirements about switching between the continuous recording and averaging methods. (2) However, if the commissioner gives a written approval for the employer to use another method for working out the number of exempt kilometres, the number of exempt kilometres must be worked out using the approved method. Example of another method— using an estimate (3) An approval mentioned in subsection (2)— (a) may be given by the commissioner if the commissioner is satisfied use of the other method would be more appropriate in particular circumstances; and (b) may apply to— (i) the employer; or (ii) a class of employers that includes the employer. (4) As soon as practicable after giving an approval under subsection (2), the commissioner must give a copy of the approval to the employer or, if the approval applies to a class of employers, each employer to whom it applies. 13ZA Continuous recording method (1) This section applies if, under section 13Z(1)(a), the employer uses the continuous recording method to work out the number of exempt kilometres for a business vehicle. (2) The employer must keep a record of the following details— Current as at [Not applicable] Page 47
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZB] (a) the odometer readings at the beginning and end of each business journey undertaken by the employee during the return period by means of the vehicle; (b) the specific purpose for which the journey was undertaken; (c) the distance travelled. Note— See the Administration Act, section 118 (Period for keeping records). (3) The number of exempt kilometres is the distance of all business journeys mentioned in subsection (2)(a), worked out using the odometer readings mentioned in the subsection. 13ZB Averaging method—how it works (1) This section applies if, under section 13Z(1)(b), the employer uses the averaging method to work out the number of exempt kilometres for a business vehicle. (2) The employer must keep the records mentioned in section 13ZC. Note— See the Administration Act, section 118 (Period for keeping records). (3) The number of exempt kilometres is the number worked out using the following formula— K = D x RP where— D means the total distance travelled by the business vehicle during the return period, worked out using the odometer readings mentioned in section 13ZC(3)(a). K means the number of exempt kilometres. RP means the relevant percentage for the vehicle. (4) The relevant percentage for the business vehicle is the percentage worked out using the following formula— RP = B/T x 100 Page 48 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZC] where— B means the distance travelled by the employee in the course of business journeys undertaken by means of the vehicle during the averaging period for the vehicle, worked out using the odometer readings mentioned in section 13ZC(2)(a). RP means the relevant percentage. T means the total distance travelled by the vehicle during the averaging period for the vehicle, worked out using the odometer readings mentioned in section 13ZC(2)(d). (5) If a relevant percentage for the business vehicle is worked out on the basis of an averaging period for the vehicle, the number of exempt kilometres for the vehicle for a return period mentioned in subsection (6) must be worked out using that relevant percentage. (6) For subsection (5), the return periods are— (a) any return period falling in or comprising the financial year in which the averaging period falls or, if the averaging period falls in 2 financial years, the second financial year in which the period falls, other than a return period ending before the averaging period ends; and (b) the return periods falling in or comprising any of the succeeding 4 financial years after the financial year mentioned in paragraph (a). (7) Subsection (5) applies subject to section 13ZE. 13ZC Averaging method—records to be kept by employer (1) An employer who, under section 13Z(1)(b), works out the number of exempt kilometres for a business vehicle using the averaging method must keep a record of the details stated in this section. (2) In relation to the averaging period for the business vehicle, the details are each of the following— Current as at [Not applicable] Page 49
Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZC] Not authorised —indicative only (a) the odometer readings at the beginning and end of each business journey undertaken by the employee during the averaging period by means of the vehicle; (b) the specific purpose for which each business journey mentioned in paragraph (a) was undertaken; (c) the distance travelled by the employee during the averaging period in the course of all business journeys mentioned in paragraph (a), worked out using the odometer readings mentioned in the paragraph; (d) the odometer readings at the beginning and end of the averaging period; (e) the distance travelled by the vehicle during the averaging period, worked out using the odometer readings mentioned in paragraph (d); (f) the relevant percentage for the vehicle. Note— Under section 13ZB(5), the relevant percentage worked out on the basis of an averaging period must be used for the return periods mentioned in section 13ZB(6). While the employer is using that relevant percentage, the employer is not required to work out the relevant percentage again, or to make a new record of the details mentioned in subsection (2). (3) In relation to the return period to which the number of exempt kilometres relates, the details are each of the following— (a) the business vehicle’s odometer readings at the beginning and end of the return period; (b) the distance travelled by the vehicle during the return period, worked out using the odometer readings mentioned in paragraph (a); (c) the number of exempt kilometres for the vehicle for the return period. (4) If the odometer of the business vehicle is replaced or recalibrated during a return period for which its readings are relevant for using the averaging method, the employer must keep a record of the odometer readings immediately before and immediately after the replacement or recalibration. Page 50 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZD] 13ZD Averaging method—what is the averaging period (1) The averaging period , for a business vehicle of an employee, means a continuous period of at least 12 weeks, chosen by the employer, throughout which the vehicle is provided or maintained by the employee. (2) The averaging period may overlap the start or end of a financial year. Note— See also section 13ZB(5) and (6) in relation to using a relevant percentage worked out on the basis of an averaging period that falls in 2 financial years. (3) If the averaging method is used for more than 1 business vehicle of an employee for the same return period, the averaging period for the vehicles must be the same. (4) This section applies subject to section 13ZE. 13ZE Averaging method—recalculation of relevant percentage (1) This section applies to an employer who, under section 13Z(1)(b), works out the number of exempt kilometres for a business vehicle using the averaging method. (2) The employer must recalculate the relevant percentage for the business vehicle if— (a) the commissioner gives the employer a written notice, before the start of a return period, directing the employer to recalculate the relevant percentage for the vehicle on the basis of an averaging period that falls wholly or partly during the return period; or (b) the employer wishes to start using the averaging method for 1 or more other business vehicles used by the employee. Note— See also section 13ZD(3). (3) Also, the employer must recalculate the relevant percentage for the business vehicle if the employer— Current as at [Not applicable] Page 51
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZF] (a) has used a relevant percentage worked out on the basis of an averaging period for the vehicle for the succeeding 4 financial years after the financial year mentioned in section 13ZB(6)(a); and (b) intends to continue using the averaging method to work out the number of exempt kilometres for the vehicle. Note— If the employer recalculates the relevant percentage on the basis of a new averaging period, the new averaging period applies for the purposes of section 13ZB(5) and the employer must use the new relevant percentage for the return periods mentioned in section 13ZB(6). (4) In this section— recalculate the relevant percentage for a business vehicle means— (a) record the details mentioned in section 13ZC(2)(a) to (e) in relation to a new averaging period for the vehicle; and (b) work out a new relevant percentage for the vehicle using the details mentioned in paragraph (a). 13ZF Averaging method—replacing a business vehicle (1) An employer using the averaging method may nominate 1 business vehicle (the replacement vehicle ) to be the replacement of another business vehicle (the original vehicle ). (2) The employer must record the nomination in writing— (a) during the financial year in which the nomination takes effect; or (b) if the commissioner allows the employer to record the nomination at a later time—at the later time allowed by the commissioner. (3) The nomination takes effect on the day stated in it. Page 52 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 13ZG] (4) After the nomination takes effect, for the employer’s use of the averaging method the replacement vehicle is taken to be the original vehicle. (5) The employer need not repeat, for the replacement vehicle, the steps already taken under this subdivision for the original vehicle. Example— The employer is not required to recalculate the relevant percentage worked out for the original vehicle. (6) The employer must keep a record of— (a) the odometer reading of the original vehicle immediately before the nomination takes effect; and (b) the odometer reading of the replacement vehicle immediately after the nomination takes effect. 13ZG Switching between continuous recording and averaging methods (1) An employer may change from using a recording method to using the other recording method with effect from the beginning of a financial year. Note— See section 13ZA(2) or 13ZC for the record keeping requirements with which the employer must comply for the financial year for the continuous recording method or averaging method. (2) In this section— recording method means the averaging method or continuous recording method. Subdivision 2 Accommodation allowances 13ZH Exempt rate for accommodation allowance (1) For this Act, a reference to wages does not include a reference to an accommodation allowance— Current as at [Not applicable] Page 53
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 14] (a) paid or payable to an employee for a night’s absence from the employee’s usual place of residence; and (b) that is not more than the exempt rate. (2) If an accommodation allowance paid or payable to an employee for a night’s absence from the employee’s usual place of residence is more than the exempt rate, the allowance comprises wages for this Act only to the extent it is more than the exempt rate. (3) The exempt rate , for a financial year, is— (a) the total reasonable amount for daily travel allowance expenses using the lowest capital city for the lowest salary band for the year decided by the Commissioner of Taxation of the Commonwealth for the Income Tax Assessment Act 1997 (Cwlth), section 900-50; or (b) if no decision mentioned in paragraph (a) is in force— the rate prescribed under a regulation. Division 2 Exemptions 14 Exemption from payroll tax (2) The wages liable to payroll tax under this Act do not include wages paid or payable— (a) by the Governor of a State; or (b) by a public hospital to a person during a period in respect of which the person is engaged exclusively in work of the hospital of a kind ordinarily performed in connection with the conduct of public hospitals; or (c) by a charitable institution in respect of a charitable institution to a person during a period in respect of which the person is engaged exclusively— (i) in the work of the second mentioned charitable institution for a qualifying exempt purpose; or Page 54 Current as at [Not applicable]
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14] Not authorised —indicative only (ii) where that second mentioned charitable institution is— (A) a hospital, in the work of that hospital of a kind ordinarily performed in connection with the conduct of a hospital; or (B) a non-tertiary educational institution, in the work of that institution of a kind ordinarily performed in connection with the conduct of a non-tertiary educational institution of the relevant kind; or (d) by a teachers’ training college (that is not a college of advanced education) declared under a regulation made for the purposes of this paragraph, in respect of such period (whether commencing before or after the commencement of the Payroll Tax Act Amendment Act 1985 , section 6) as is specified under a regulation unless within any period so specified the college becomes a college of advanced education whereupon the exemption shall cease to apply; or (da) by the following entities— (i) a department, except to the extent those wages are paid or payable by a commercialised business unit; (ii) a Hospital and Health Service established for Queensland under the Hospital and Health Boards Act 2011 , section 17; or (e) by a local government, except to the extent that those wages are paid or payable— (i) for or in connection with; or (ii) for or in connection with the construction of any buildings or the construction of any works or the installation of plant, machinery or equipment for use in or in connection with; electricity generation, distribution or supply, water supply, sewerage, the conduct of transport services (including ferries), of abattoirs, of public markets, of Current as at [Not applicable] Page 55
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14] Not authorised —indicative only Page 56 parking stations, of quarries, of cemeteries, of picture theatres, of milk supply, of hostels, of hotels or of bakeries or of any other activity that is a prescribed activity; or (f) to members of his or her official staff by— (i) a consular or other representative (other than a diplomatic representative) in Australia of the government of any other part of Her Majesty’s dominions or of any other country; or (ii) a trade commissioner representing in Australia any other part of Her Majesty’s dominions; or (g) by the Commonwealth War Graves Commission; or (h) by the Australian-American Educational Foundation; or (i) to a person who is a member of the defence force of the Commonwealth or of the armed force of any part of Her Majesty’s dominions, being wages paid or payable by reason of the person being such a member by the employer from whose employment the person is on leave; or (j) subject to subsections (3) to (7), to a person who is an apprentice or trainee under the Further Education and Training Act 2014 , as the apprentice or trainee, for the period of the person’s apprenticeship or traineeship; or (k) subject to subsection (8), to an employee for a period when the employee is— (i) taking part in fire fighting or fire prevention activities, or associated activities, as a volunteer member of a rural fire brigade under the Fire and Emergency Services Act 1990 ; or (ii) performing functions as a volunteer member of the State Emergency Service or an emergency service unit under the Fire and Emergency Services Act 1990 ; or (iii) performing functions as an honorary ambulance officer under the Ambulance Service Act 1991 ; or Current as at [Not applicable]
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14] Not authorised —indicative only (l) to a person who is an Aboriginal person or Torres Strait Islander employed under an employment project under the Community Development Employment Project funded by the Department of Employment and Workplace Relations (Cwlth) or the Torres Strait Regional Authority. (3) The exemption given in subsection (2)(j) does not apply to wages paid or payable to a trainee under a traineeship started with the trainee’s employer after the commencement of this subsection (the current traineeship ) if, immediately before the current traineeship starts, the trainee had been employed by the employer for a continuous period of at least— (a) for a full-time employee—3 months; or (b) for a part-time or casual employee—12 months. (5) Despite subsection (3), the exemption given in subsection (2)(j) applies to wages paid or payable to the trainee under the current traineeship if— (a) after the commencement of subsection (3), the trainee started, with the employer, a certificate II traineeship and subsection (2)(j) applied to wages paid or payable to the trainee under the certificate II traineeship; and (b) the current traineeship is a certificate III traineeship in the same training package as the certificate II traineeship; and (c) the trainee starts the current traineeship within 1 year after obtaining the certificate II qualification. (6) For subsection (3), the trainee is taken to have been employed by the employer for a continuous period if, in the period, 1 of the following events is effected for the sole or dominant purpose of obtaining the benefit of Commonwealth or State funding, or an exemption under subsection (2)(j), in relation to the traineeship— (a) the trainee’s employment ends, and restarts, with the employer; (b) the trainee’s employer changes. Current as at [Not applicable] Page 57
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14] Not authorised —indicative only (7) For subsection (5)(a), a reference to the trainee’s employer includes a reference to the former owner of the business in which the trainee is employed if— (a) ownership of the business changes after the trainee starts the certificate II traineeship; and (b) the certificate III traineeship is with the new owner. (8) The exemption given in subsection (2)(k) does not apply to wages paid or payable as annual leave, long service leave, recreation leave or sick leave. (9) In this section— Australian Qualifications Framework has the meaning given under the Higher Education Support Act 2003 (Cwlth), schedule 1. certificate II traineeship means a traineeship leading to a certificate II qualification under the Australian Qualifications Framework. certificate III traineeship means a traineeship leading to a certificate III traineeship qualification under the Australian Qualifications Framework. charitable institution means an institution registered under the Administration Act, part 11A, other than a university or university college. commercialised business unit means a division, branch or other part of a department carrying on a business activity included in the list published under the Queensland Productivity Commission Act 2015 , section 33(1). department means a department under the Financial Accountability Act 2009 , section 8. non-tertiary educational institution means an institution, not carried on by or on behalf of the State, the principal object and pursuit of which is— (a) the education of students in primary or secondary schools, or both; or (b) the conduct of a rural training school; or Page 58 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 14A] (c) the conduct of a kindergarten or preschool; or (d) any 2 or more of those objects and pursuits. qualifying exempt purpose means each of the following— (a) activities of a religious nature; (b) public benevolent purposes; (c) educational purposes; (d) conducting a kindergarten; (e) the care of sick, aged, infirm, afflicted or incorrigible people; (f) the relief of poverty; (g) the care of children by— (i) being responsible for them on a full-time basis; and (ii) providing them with all necessary food, clothing and shelter; and (iii) providing for their general wellbeing and protection; (h) another charitable purpose or promotion of the public good; (i) providing a residence to a minister, or members of a religious order, who is or are engaged in an object or pursuit of a kind mentioned in any of paragraphs (a) to (h). 14A Exemption for parental, adoption or surrogacy leave (1) The wages liable to payroll tax under this Act do not include wages paid or payable to an employee for parental leave, adoption leave or surrogacy leave. (2) It is immaterial whether— (a) the parental leave is taken during or after the pregnancy; or Current as at [Not applicable] Page 59
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14A] Not authorised —indicative only (b) the adoption leave is taken before or after the adoption; or (c) the surrogacy leave is taken before or after a child starts residing with the employee under a surrogacy arrangement. (3) The exemption under subsection (1) is limited to wages paid or payable for— (a) not more than 14 weeks’ maternity leave for any 1 pregnancy; and (b) not more than 14 weeks’ paternity leave for any 1 pregnancy; and (c) not more than 14 weeks’ adoption leave for any 1 adoption; and (d) not more than 14 weeks’ surrogacy leave for any 1 surrogacy arrangement. (4) A reference in subsection (3) to 14 weeks’ leave is a reference to— (a) for a full-time employee who takes leave on less than full pay—a period equivalent to 14 weeks’ leave on full pay; or (b) for a part-time employee— (i) if the employee takes leave on the employee’s part-time rate of pay—a period of 14 weeks’ leave on that rate of pay; or (ii) if the employee takes leave on a rate of pay that is less than the employee’s part-time rate of pay—a period equivalent to 14 weeks’ leave on the employee’s part-time rate of pay. (5) An employer who claims an exemption under subsection (1) must obtain and keep as a record— (a) for wages paid or payable for maternity leave—a medical certificate for, or statutory declaration by, the employee stating— Page 60 Current as at [Not applicable]
Payroll Tax Act 1971 Part 2 Liability to taxation [s 14A] Not authorised —indicative only (i) the employee is or was pregnant; or (ii) the employee has given birth and the date of birth; or (b) for wages paid or payable for paternity leave—a statutory declaration by the employee stating— (i) a female is or was pregnant with his unborn child; or (ii) his child has been born and the date of birth; or (c) for wages paid or payable for adoption leave—a statutory declaration by the employee stating— (i) 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; or (d) for wages paid or payable for surrogacy leave—a statutory declaration by the employee stating a child has started residing with the employee under a surrogacy arrangement. Note— Under the Administration Act , section 118, these records must be kept for at least 5 years. (6) The exemption under subsection (1) does not apply to wages comprising a fringe benefit under the Fringe Benefits Assessment Act. (7) In this section— adoption leave means leave given to an employee in connection with the adoption of a child by the employee, other than annual leave, recreation leave, sick leave or similar leave. maternity leave means leave given to a female employee in connection with her pregnancy or the birth of her child, other than annual leave, recreation leave, sick leave or similar leave. Current as at [Not applicable] Page 61
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 15] parental leave means maternity leave or paternity leave. paternity leave means leave given to a male employee in connection with the pregnancy of a female carrying his unborn child or the birth of his child, other than annual leave, recreation leave, sick leave or similar leave. surrogacy arrangement has the meaning given by the Surrogacy Act 2010 . surrogacy leave means leave given to an employee in connection with a child residing with the employee under a surrogacy arrangement, other than annual leave, recreation leave, sick leave or similar leave. 15 Exemption from payroll tax—certain CWA wages (1) CWA is not required to lodge a return. (2) Divisions 3 to 5 apply to CWA as if— (a) a reference in section 20 to the periodic deduction were a reference to the taxable wages paid or payable by CWA during the periodic return period; and (b) a reference in section 29 to the annual deduction were a reference to the taxable wages paid or payable by CWA during the financial year; and (c) a reference in section 37 to the final deduction were a reference to the taxable wages paid or payable by CWA during the final period. (3) However, CWA is required to lodge a return and subsection (2) does not apply if— (a) wages are paid or payable by CWA in carrying on a business activity predominantly on a commercial basis ( CWA’s commercial wages ); or (b) CWA is a member of a group. (4) If only subsection (3)(a) applies, tax payable is the amount bearing the same proportion to tax payable on CWA’s taxable Page 62 Current as at [Not applicable]
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 15A] wages as CWA’s commercial wages bear to taxable wages before deducting the prescribed amount. (5) If subsection (3)(b) applies, the annual amount of tax payable by the members of the group must be reduced by an amount bearing the same proportion to the tax payable as CWA’s taxable wages (other than CWA’s commercial wages) bear to the taxable wages paid or payable by the members of the group. (6) For this section, a business activity by CWA is taken to be conducted on a commercial basis if it is conducted in a similar way to similar business activities conducted by anyone else on a commercial basis. (7) For this section, a business activity does not include— (a) the conduct of a student hostel; and (b) the conduct of a hostel subsidised under the Aged or Disabled Persons Care Act 1954 (Cwlth); and (c) an activity of a type prescribed under a regulation. (8) In this section— CWA means Queensland Country Women’s Association. 15A Exemption for services performed or rendered entirely in another country The wages liable to payroll tax under this Act do not include wages paid or payable by an employer for an employee for services performed or rendered entirely in another country for a continuous period of more than 6 months after wages were first paid for the employee for the services. Current as at [Not applicable] Page 63
Not authorised —indicative only Payroll Tax Act 1971 Part 2 Liability to taxation [s 16] Division 3 Periodic liability Subdivision 1 Employer other than the DGE for a group 16 Application of sdiv 1 This subdivision applies to an employer who— (a) is required under section 59 to lodge periodic returns; and (b) is not the DGE for a group. 17 Definitions for sdiv 1 In this subdivision— actual periodic deduction , for the employer for a periodic return period, means the greater of zero and the amount worked out using the following formula— where— APD