Payroll tax grouping for discretionary trusts (NSW)

The High Court in Smeaton Grange Holdings Pty Ltd ATF Smeaton Trust & Ors v Chief Commissioner of State Revenue [2017] HCASL 309 has refused the taxpayer’s application for special leave on the basis that it considers the decision of the Supreme Court of NSW (Court of Appeal) was ‘clearly correct’. The Court of Appeal held that the existence and composition of the relevant payroll tax group was to be made by reference to the legal relationships that existed at the time the liability to payroll tax arose, and the disclaimer of a beneficiary’s right as a trust object could not retrospectively alter the joint and several liability of the group members at that time.

For a detailed analysis of the case, refer to the September 2017 edition of TaxTalk monthly.

Senate Economics Legislation Committee report on proposed Superannuation changes

The Senate Economics Legislation Committee (the Committee) tabled its report on Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 2) Bill 2017, which proposes amendments regarding choice of funds and the integrity of salary sacrifice arrangements. The Committee recommended that the Bill be passed, with additional comments from Labor senators recommending amendments to the Bill to ensure there are no impediments to collective bargaining and sufficient safeguards exist when workers exercise choice of fund. This Bill has been passed by the House of Representatives and is now before the Senate.

State tax developments (SA)

The South Australian (SA) Treasurer during the month that the SA Government will deliver payroll tax relief of almost AUD10,000 for eligible small businesses as one of the measures contained within a revised Bill relating to the Foreign Investor Surcharge. The Treasurer has asked the Commissioner of State Taxation to find a way to deliver the tax relief for businesses with payrolls between AUD600,000 and AUD1.5 million via administrative rather than legislative means. Further details are expected to follow shortly.

State tax developments (VIC)

The has passed the Victorian Legislative Assembly. Amongst other things, the Bill proposes to amend the Payroll Tax Act 2007 (VIC) to extend the exemption for wages paid to new entrants to ‘for profit’ organisations declared to be an approved group training organisation.

Board of Taxation report on definitions in State and Federal tax law

The Board of Taxation (the Board) has published its recent report on . Broadly, the common areas of ‘inconsistencies in core definitions and concepts’ emerging from consultations were (in order of priority):

·       payroll tax concepts;

·       definition of employee;

·       ‘indirect interests in land’ (commonly referred to as ‘land rich rules’); and

·       the meaning of ‘employee’ for the purposes of the PAYG withholding and superannuation guarantee.

As a result of identifying a number of inconsistencies in definitions and concepts, the Board recommended circulating the report to the relevant state and territory agencies responsible for tax policy for further consideration.

ATO advice under development

The Australian Taxation Office (ATO) is currently working on a new Practical Compliance Guideline which will outline the ATO’s compliance approach to determining whether private use of certain vehicles is ‘minor, infrequent and irregular’ for Fringe Benefits Tax (FBT) purposes. It is expected that this will be released in the coming months.

Single Touch Payroll live stream

On 16 November 2017, the ATO hosted a Single Touch Payroll Employer Engagement Forum (live-streamed event) for employers to help them better understand Single Touch Payroll. A recording of the event is available via the .

PwC submission on taxi travel FBT exemption

PwC has lodged a submission with the ATO on its Technical Discussion Paper . Expanding the definition of ‘taxi’ for FBT purposes will produce a practical outcome for modern day travel within an employment context, and support the broadening of the definition of ‘taxi’ to include ridesourcing services and other similar vehicles for hire. The ATO is currently considering the submissions that have been made by taxpayers, tax professionals and industry bodies.

ATO updates reasonable travel and overtime meal allowance expense amounts

The ATO has issued an addendum to Taxation Determination TD 2017/19, which deals with reasonable travel and overtime meal allowance expense amounts for 2017-18. The amended determination provides separate reasonable travel allowance expense amounts for breakfast, lunch and dinner for employee truck drivers for the 2017-18 year (following detailed consultation with the transport industry). For the 2017-18 income year, the reasonable amounts for domestic travel meal expenses for employee truck drivers are: breakfast - AUD24.25, lunch - AUD27.65 and dinner - AUD47.40.