State Revenue Office Payroll Tax Harmonisation

State Revenue Office Background Consistency gradually eroded since 1971 Business faces higher compliance costs, in many cases with no benefit in terms of revenue for the community

State Revenue Office Harmonisation - background All states have been exploring opportunities NSW & Victoria harmonised on 1 July 2007 Tasmania to join NSW/Vic on 1 July 2008

State Revenue Office Harmonisation is not … Aligned payroll tax rates Aligned payroll tax thresholds

State Revenue Office Harmonisation is … Consistency in…. what is taxable exemptions & rebates rules for grouping anti-avoidance provisions

State Revenue Office Harmonisation could be … One-stop shop payments Single return forms Single audits Consistent software

State Revenue Office Some of the main changes Motor vehicle and accommodation allowances Employee share acquisition schemes into the payroll tax net Exemption of not-for-profit charities Exemption of wages paid for maternity and adoption leave Grouping provisions Introduction of tracing provisions

State Revenue Office Allowances Alignment of vehicle and accommodation allowances with FBT –Claim the ATO’s large car rate –Claim the lowest capital city rate for the lowest salary band

State Revenue Office Employee Share Acquisition Schemes Currently outside payroll tax net in Tasmania The grant of a share or option to an employee or director will constitute wages

State Revenue Office Exemptions Wages paid to employees of not-for-profit organisations having wholly charitable, benevolent, philanthropic or patriotic purposes, engaged exclusively in that kind of work, will be exempt Wages paid in respect of maternity or adoption leave will be exempt

State Revenue Office Grouping Provisions Test for grouping through the inter-use of employees is being expanded Expanded test will capture quasi-outsourcing arrangements Commissioner’s discretion to de-group will remain

State Revenue Office Tracing Provisions Prevents the avoidance of payroll tax grouping through the use of corporate structures Determines a ‘controlling interest’ by examining direct and indirect interests.

State Revenue Office Timetable Draft new PTX legislation Govt approval to proceed Taxpayer education campaign Parliamentary approval of new legislation August 07 Sept - Nov 07 Jan - Jun 08 November 07 July 08 Harmonised model applies

State Revenue Office Education program Web Site updates Media Campaign Update of relevant SRO Publications Client mail outs and communications with peak bodies

State Revenue Office Useful links NSW legislation: Victorian legislation: