Legal news
Payroll tax captures not only wages paid to employees but also certain payments made to contractors. In this part 6 of our payroll tax series, we look at what is a contractor and what payments to contractors are caught by the payroll tax regime. In part 7 we will examine the exemptions that apply to contractors.
An employment agency contract involves a contract between two parties where one of the parties (the employment agent) procures the services of a person for a client. The relevant test is whether the employment agent provided individuals who would comprise, or who would be added to, the workforce of the client for the conduct of the client's business.
The ATO has provided some welcome clarification for auditors regarding their obligations to report on non-arm’s length expenditure (NALE) incurred by a super fund of a general nature.
In our earlier articles we discussed the Administrative Appeals Tribunal (AAT) and Federal Court decisions in Eichmann v FCT [2019] AATA 162 and FCT v Eichmann [2019] FCA 2155. The Full Federal Court in Eichmann v FCT [2020] FCAFC 155 recently allowed the taxpayer’s appeal of the Federal Court decision.
State and territory revenue offices made land tax and payroll tax measures in response to the COVID-19 pandemic. We outlined a summary of the measures as at 1 September 2020 here.
Thousands of businesses across regional Victoria have already taken advantage of the Victorian Government’s regional payroll tax cuts, which have saved businesses more than $31 million in the first financial year it was introduced.
As discussed here and here, the superannuation guarantee (SG) amnesty allowed employers to disclose and pay previously unpaid SG charge, including nominal interest, for the quarters between 1 July 1992 to 31 March 2018 without incurring the administration component ($20 per employee per quarter) or Part 7 penalties. In addition, payments of SG charge made to the ATO under the amnesty were tax deductible.
In the recent decision of Re SB; Ex Parte AC [2020] QSC 139, the Supreme Court of Queensland confirmed that the decision to make a binding death benefit nomination (‘BDBN’) is a financial matter and can therefore be made for a person by their administrator.
Where services are performed wholly in one Australian jurisdiction, payroll tax will be payable in that jurisdiction. For example Aaron is a receptionist and fully performs his job at an office in regional Victoria. His employer qualifies for payroll tax being charged at the regional rate, Aaron’s wages will be payable in Victoria at regional rates.
In April 2020 we reported on Land Tax and Payroll Tax measures state and territory revenue offices made in response to the COVID-19 pandemic. As the ramifications of COVID-19 continue to affect Australians, these measures have since been extended and new measures announced.
