Appeal lodged in respect of payroll tax decision on amounts distributed via express trust (VIC) 

Earlier this year, the Victorian Civil and Administrative Tribunal (the Tribunal) found in The Optical Superstore Pty Ltd & Ors v Commissioner of State [2018] VCAT 169 that payroll tax was not payable on certain net consultation payments made to optometrists by the owner of the clinic and premises at which that the optometrists used to treat their customers. This was on the basis that the net consultation fees were effectively held on trust for the optometrists, and the payments were therefore not considered to be for, or in relation to, services provided to the Applicant. Instead, only a small number of payments made by the Applicant to optometrists based directly on hours worked by the optometrists were considered wages for payroll tax purposes.  We understand that the Commissioner has lodged an appeal with the Supreme Court to review this decision with a hearing date in September 2018. 

ATO draft guidance on expansion of taxable payments reporting system 

The taxable payments reporting system (TPRS), which currently applies to businesses in the building and construction industry and Government entities, requires businesses to report payments they make to contractors for certain specified services to the Australian Taxation Office (ATO). 

In support of the current proposal to expand the TPRS to additional industries, the ATO has released draft law companion ruling LCR 2018/D6 which provides preliminary guidance on the proposed expansion of the TPRS to contractors in the courier and cleaning industries from 1 July 2018. Comments are due by 14 September 2018. 

In addition, the ATO has also released draft guidance detailing how it is considering applying the proposed law announced in the 2018-19 Federal Budget, which would extend the TPRS to businesses in the road freight, security, investigation, surveillance, and information technology (IT) industries, with effect from 1 July 2o19. A draft legislative instrument (and accompanying explanatory statement) has also been released that aims to exempt relevant businesses from needing to lodge a Taxable Payments Annual Report where less than 10 per cent of their relevant goods and services tax (GST) turnover is comprised of payments received for security, investigation, surveillance, or IT services. Comments were due on 31 August 2018. 

Supreme Court of NSW extends power to issue third party debt recovery notices 

The Supreme Court of NSW in Fyna Projects Pty Ltd v Chief Commissioner of State Revenue [2018] NSWSC 1220 has refused to grant declaratory and injunctive relief sought by the plaintiffs in relation to the outcome of an audit, assessment and reassessment of liability under the Payroll Tax Act  2007 (NSW). The Court held that the Chief Commissioner of State Revenue’s power to issue third party notices to the debtors of a payroll tax “taxpayer” did extend to members of a payroll tax group of which the taxpayer was a member. 

The plaintiff has subsequently lodged a Notice of Appeal against this decision with the NSW Court of Appeal. 

Superannuation Guarantee relief for certain visa holders 

The Federal Government’s consultation process for the draft Superannuation Guarantee (Administration) Regulations 2018 ended on 15 August 2018. 

The draft regulations were introduced to replace the existing Superannuation Guarantee (Administration) Regulations 1993, which were scheduled to sunset on 1 October 2018. Minor technical changes have been made in the draft regulations to remove redundant references and make consequential amendments required by recent updates to Migration Regulations 1994. 

Under the draft regulations, employers of senior executives in Australia on temporary work visas will continue to be relieved of Superannuation Guarantee obligations for senior executives holding either a Subclass 482 (Temporary Skill Shortage) visa or the Subclass 400 (Temporary Work (Short Stay Specialist)) visa. 

The new regulations are expected to be finalised prior to 1 October 2018. 

PAYG withholding variation for performing artists 

The ATO has issued a legislative instrument which continues the withholding arrangements for performing artists that are paid for performing in a promotional activity by varying Pay As You Go (PAYG) withholding to a flat rate of 20 per cent.