Payroll tax decision summaries

Tribunal

Contractors

2014 Decision Summaries

Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215
Date of Decision: 8 December 2014

Orders:
  1. In respect to the 2008, 2010, 2011 and 2012 financial years the matter was remitted to the Chief Commissioner for determination in accordance with the Tribunal's decision.
  2. Confirm the assessment for the 2009 financial year.
Catchwords: ADMINISTRATIVE LAW - Civil and Administrative Tribunal Act 2013 (NSW) - Payroll Tax Act 2007 (NSW) – relevant contract - whether services supplied under a relevant contract may include professional services - when services not ordinarily required - whether services performed by a person who ordinarily performs services of that kind to the public generally in that financial year - whether genuine independent business - whether contractor must be financially independent of designated person - penalty -remission of market rate component - requirement to exercise reasonable

Case summary: Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215
Complete Wardrobes & Showerscreens Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 97
Date of Decision: 14 July 2014

Decision: Application dismissed.

The Tribunal was not satisfied that it was more likely than not that the decisions of the Chief Commissioner in relation to the relevant assessments were incorrect, and affirmed the assessments.

Catchwords: Payroll tax - contractors - conveyance of goods. Amount of payment attributable to the non-labour component of services under relevant contracts. Reassessment of a tax liability

Case summary: Complete Wardrobes & Showerscreens Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 97

Employment Agencies

2016 Decision Summary

Winday International Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 270
Date of Decision: 23 November 2016

Orders: The decision of the Chief Commissioner under review is affirmed.

Catchwords: REVENUE LAW - Payroll Tax Act 2007 – Division 7 contractor provisions - relevant contract - Division 8 Employment agents - employment agency contract - onus of taxpayer

Case summary: Winday International Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 270

2014 Decision Summary

Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227
Date of Decision: 22 December 2014

Decision: The proceedings consider whether amounts paid by the Taxpayer to welders are payments made pursuant to "employment agency contracts" as set out in s.37 of the Payroll Tax Act 2007 ("the Act").

The Chief Commissioner's decision that the payments were made pursuant to employment agency contracts was affirmed by the Tribunal, and the assessments were confirmed.

Catchwords: Employment agency contracts - payroll tax - procure - wages - penalties - reasonable care

Case summary: Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227

Grouping

2016 Decision Summary

Chan & Naylor Australia Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 4
Date of Decision: 05 January 2016

Orders:
  1. The decisions of the Chief Commissioner under review in respect of grouping the Applicants, and the revised assessments issued 3 June 2014, are affirmed.
     
  2. There be a directions hearing in respect of any costs application in this matter and in respect of the Exclusion Decision.
     
  3. The parties have liberty to apply to the Tribunal in relation to order 2 (costs).
Catchwords: REVENUE LAW – payroll tax – grouping – reasonable care – interest – penalty tax - onus

Case summary: Chan & Naylor Australia Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 4

2015 Decision Summary

Edgely Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 16
Date of Decision: 04 February 2015

Orders: The pay-roll tax assessments for the period 1 July 2002 to 30 June 2007 were confirmed.

Catchwords: TAXES and DUTIES - pay-roll tax - whether a person with no employees can be liable to payroll tax - whether carrying on business for grouping provisions - joint and several liability- de-grouping - whether businesses carried on substantially independently of each other - Pay-roll Tax Act 1971 and Taxation Administration Act 1996

Case summary: Edgely Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 16

2014 Decision Summary

Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83
Date of Decision: 26 May 2014

Decision: The Tribunal set aside the assessments on the basis that an exemption under the employment agency provisions applied. The Tribunal held that Health Services procured service providers under employment agency contracts, for clients that were exempt from payroll tax, and the clients had provided declarations to that effect. The Tribunal held that the employment agency provisions in Part 3, Division 8 were an exclusive code, and the exemption applied whether the service providers were engaged by Health Services under contracts of employment or relevant contracts.

Catchwords: TAXES AND DUTIES - Payroll tax - Employment agency contracts - Whether taxpayer procured the services of workers for clients - Whether contracts were employment agency contracts when worker in a common law employer/employee relationship - Whether Division 8 in Part 3 of Payroll Tax Act 2007 constitutes an exclusive regime to determine liability under an employment agency contract

Case summary: Health Service Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 83

2013 Decision Summary

Pastel Pines International Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 49
Date of Decision: 01 March 2013

Decision: The decision under review is affirmed.

Judicial Member Walker determined that the voting power attached to the shares in Pastel Pines was determined by the ownership of the shares and the voting power of Mr and Mrs Sterelny was not affected by the shareholders’ agreement. Therefore, Mr and Mrs Sterelny had controlling interests in Pastel Pines as well as JPS Nominees and the two companies were grouped.

Judicial Member Walker determined that the considerable amount of evidence dealing with the 50-50 running of the business of Pastel Pines was irrelevant because it related only to the board of directors of the company. The Chief Commissioner did not rely on the powers of directors for the purposes of determining that Mr and Mrs Sterelny had a controlling interest in Pastel Pines. On that basis, the Chief Commissioner’s decision to group the Applicant and JPS Nominees for the financial years ending 30 June 2007 and 30 June 2008 was affirmed.

Catchwords: Payroll tax - grouping - constitution of corporation – shareholder agreement

Case summary: Pastel Pines International Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 49

2012 Decision Summary

Bilquip Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADT 151
Date of Decision: 02 August 2012

Decision: Application dismissed.

Judicial Member Verick rejected the evidence of the taxpayers with respect to the documents sent to ASIC. Judicial Member Verick found that an adverse inference could be drawn from the taxpayers’ failure to call evidence from persons who would be expected to know (and who were independent of Mr and Mrs Florent) of the allegedly mistaken ASIC documents or the role in the company played by Mr and Mrs Florent (relying on the principle in Jones v Dunkel (1959) 101 CLR 298).

Accordingly, Judicial Member Verick held that the taxpayers were not directors of the companies at the relevant times and that the companies were grouped correctly by the Chief Commissioner and the assessments were correct.

Catchwords: Payroll Tax - Liability - Grouping provisions - Companies with common controlling interest - Whether accountant and wife assisting him de facto directors

Case summary: Bilquip Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADT 151

Grouping Exclusion Determinations

2016 Decision Summary

Eastside Veterinary Emergency & Specialists Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 104
Date of Decision: 26 May 2016

Decision: The Chief Commissioner's decision not to de-group the applicant is confirmed.

Catchwords: STATE REVENUE - Payroll Tax – grouping of taxpayers - Exclusion of member from group – s 79 - Payroll Tax Act 2007

Case summary: Eastside Veterinary Emergency & Specialists Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 104

2015 Decision Summaries

Regis Mutual Management Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 213
Date of Decision: 19 October 2015

Order: The decisions of the Chief Commissioner under review were affirmed.

Catchwords: PAYROLL TAX - grouping; discretion to exclude a member from a group

Case summary: Regis Mutual Management Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 213
Headwear Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 166
Date of Decision: 10 August 2015

Decision: The Tribunal concludde that the Taxpayer has not discharged its onus of satisfying, on the balance of probabilities, that for any tax year during the Relevant Period the business of the Taxpayer was carried on independently of and was not connected with the carrying on of each other group business.

Orders: The decision under review was affirmed.

Catchwords: Payroll tax; grouping provisions; discretion to degroup members of a payroll tax group; importance of different factors

Case summary: Headwear Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 166
Toveety Maintenance Services Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 137
Date of Decision: 03 June 2015

Order: The decision under review was affirmed.

Catchwords: Payroll tax, exclusion under section 79, dependence, connectedness

Case summary: Toveety Maintenance Services Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 137

2014 Decision Summaries

Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 132
Date of Decision: 10 September 2014

Decision: The decision of the Chief Commissioner under review is affirmed

Catchwords: Payroll tax – whether the plaintiff should be excluded from group pursuant to s 79 of the Payroll Tax Act 2007

Case summary: Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 132
Seovic Civil Engineering Pty Ltd & Ors v Chief Commissioner of State Revenue [2014] NSWCATAD 52
Date of Decision: 30 April 2014

Decision: The matter is remitted to the Chief Commissioner to exercise his discretion under s.79 as directed.

Catchwords: Taxes and Duties - Payroll Tax - Liability - Grouping Provisions - whether respondent should exercise discretion to de-group - Payroll Tax Act 2007 – s 72(2) – s 74 - s 79

Case summary: Seovic Civil Engineering Pty Ltd & Ors v Chief Commissioner of State Revenue [2014] NSWCATAD 52
Grubers Beckett Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 30
Date of Decision: 21 March 2014

Decision: Alfred Gruber and his wife Louise Gruber as a set of persons have a controlling interest in each of Grubers Beckett Pty Ltd (“Grubers Beckett”), Business Forum Pty Ltd (“Business Forum”) partnership of A.C Gruber and L. Gruber (Partnership). As such all those businesses constitute a group. Business Forum acted as a service company for Grubers Beckett.

Mr Gruber gave evidence that he had no effective control of the businesses and that they were intended to be franchised as control of those businesses was with the principals of the various offices.

The judicial member confirmed that the grouping is a fact and no exclusion can be granted as the businesses were very closely linked. Further Grubers Beckett did not discharge the onus of proof to show that the businesses are independent

Catchwords: Payroll tax – onus of proof - de-grouping

Case summary: Grubers Beckett Pty Limited v Chief Commissioner of State Revenue [2014] NSWCATAD 30

2013 Decision Summary

Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 17
Date of Decision: 24 January 2013

Decision: The Tribunal affirmed the payroll tax assessments for the 2008-2010 tax years on the basis that the taxpayer should not be excluded from the company group.

Catchwords: Payroll Tax - grouping provisions - exercise of discretion to exclude a member from group - section 79 Payroll Tax Act 2007

Case summary: Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 17

Interest and Penalty Tax

2016 Decision Summary

Tacey v Chief Commissioner of State Revenue [2016] NSWCATAD 255
Date of Decision: 10 November 2016

Order: Senior Member Walker ordered that the premium rate component of the interest be reduced from 8 per cent to 2 per cent, and affirmed the Chief Commissioner's decision in all other respects.

Catchwords: Payroll Tax – remission of penalty and interest – taxpayer’s reliance upon expert advice regarding their tax liability – premium component of interest rate – culpability component of penalty interest reduced

Case summary: Tacey v Chief Commissioner of State Revenue [2016] NSWCATAD 255

Appeals Panel

Employment Agencies

2015 Decision Summary

Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAP 249
Date of Decision: 25 November 2015

Orders: The Appeal Panel ordered that the Tribunal decision be set aside and the whole matter be reconsidered by the Tribunal differently constituted from the Tribunal at first instance.

Catchwords: Appeal - payroll tax - employment agency contract - penalties

Case summary: Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAP 249

Grouping

2013 Decision Summary

Bilquip Pty Ltd, Illmat Pty Ltd, Holibass Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 36
Date of Decision: 30 July 2013

Decision: The decision of Tribunal Member Verick was affirmed and the appeal was dismissed.

The Appeal Panel rejected the Taxpayers’ arguments that the Tribunal made errors of law in interpreting provisions of the Corporations Act when it determined that evidence referred to by the Chief Commissioner was sufficient to rebut the presumption that ASIC certificates certifying that a person was director at a particular time is proof of the matters stated, and in applying the test for determining whether a person is a de facto director.

(see ADT Case Summary - Bilquip Pty Ltd v Chief Commissioner of State Revenue [2012] NSWADT 151)

Catchwords: Administrative Decisions Tribunal Act 1997 – s 113(2)(b) - Corporations Act 2001 – s 9 – s 1274B - s 1274C - Payroll tax - grouping provisions - companies with common controlling interest - ASIC certificates - whether individuals were validly appointed directors - de facto directors - errors of law - leave to extend appeal to the merits - unfair or unorthodox treatment of evidence

Case summary: Bilquip Pty Ltd, Illmat Pty Ltd, Holibass Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 36

Grouping Exclusion Determinations

2014 Decision Summary

Chief Commissioner of State Revenue v Seovic Civil Engineering Pty Ltd & Ors [2014] NSWCATAP 94
Date of Decision: 01 December 2014

Decision: The Appeal Panel allowed the Chief Commissioner's appeal, set aside the decision at first instance, and in lieu the Taxpayer's application for review of the Chief Commissioner's decision not to exclude Exell was dismissed.

Catchwords: TAXATION AND REVENUE - payroll tax - whether the Taxpayer should be excluded from a payroll tax group pursuant to s 79 of the Act, whether the Taxpayer had a legitimate expectation

Case summary: Chief Commissioner of State Revenue v Seovic Civil Engineering Pty Ltd & Ors [2014] NSWCATAP 94

2013 Decision Summary

Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42
Date of Decision: 06 September 2013

Decision: The appeal is allowed. The Decision is set aside and remitted to the Tribunal as originally constituted, to be determined in accordance with these Reasons.

Catchwords: Payroll tax - grouping provisions - de-grouping of company - discretion of Chief Commissioner to de-group - nature of discretion under Payroll Tax Act 2007 (NSW) s 79 - independent and not connected - ability to influence management - ability to control - inter-company loans - carrying on of business - statutory interpretation - question of law or fact - task of Appeal Panel where error of law

Case summary: Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42
Last updated: 21 February 2017