Queensland: Payroll Tax Act 1971 (Qld)

Payroll Tax Act 1971 An Act to impose a tax upon employers in respect of certain wages Part 1 Preliminary 1 Short title This Act may be cited as the Payroll Tax Act 1971. 2 Dictionary The dictionary in the schedule defines particular words used in this Act. 3 Meaning of superannuation contribution (1) A superannuation contribution is a monetary or non-monetary contribution paid or payable by an employer for an employee, or by a company for a director of the company— (a) as a superannuation guarantee charge under the Superannuation Guarantee Act; or (b) to a superannuation fund under the Superannuation Industry (Supervision) Act 1993 (Cwlth); or (c) to another form of superannuation, provident or retirement fund or scheme, including, for example, the following— (i) a retirement savings account under the Retirement Savings Accounts Act 1997 (Cwlth); (ii) a wholly or partly unfunded fund or scheme. Examples of non-monetary contribution— 1 marketable securities 2 real property (2) In this section— Superannuation Guarantee Act means the Superannuation Guarantee (Administration) Act 1992 (Cwlth). superannuation guarantee charge does not include the following— (a) an additional superannuation guarantee charge under section 49 or part 7 of the Superannuation Guarantee Act; (b) the part of a superannuation guarantee charge equal to a superannuation contribution mentioned in subsection (1)(b) or (c) that is payable, and for which payroll tax has been paid to the commissioner, to the extent the contribution would have resulted in a reduction in the charge percentage under section 23 of the Superannuation Guarantee Act if the contribution had been paid. unfunded, for a superannuation, provident or retirement fund or scheme, means the extent that an amount paid or payable by an employer for an employee, or by a company for a director of the company, covered by the fund or scheme is not paid or payable while the employee is employed by the employer, or the director is appointed as a director of the company. 3A Meaning of termination payment (1) A termination payment is— (a) any of the following payments made because of the retirement from, or termination of, any office or employment of an employee— (i) an unused annual leave payment under the Income Tax Assessment Act 1997 (Cwlth), section 83-10; (ii) an unused long service leave payment under the Income Tax Assessment Act 1997 (Cwlth), section 83-75; (iii) so much of an employment termination payment paid or payable by an employer, whether paid or payable to the employee or to another entity, that would be included in the assessable income of the employee under the Income Tax Assessment Act 1997 (Cwlth), chapter 2, part 2-40 if the whole employment termination payment had been paid to the employee; or (b) a following amount, if the amount would be an employment termination payment had it been paid or payable because of termination of employment— (i) an amount paid or payable by a company because of the termination of the services or office of a director of the company, whether paid or payable to the director or another entity; (ii) an amount paid or payable by a relevant contract employer because of the termination of the supply of the services of an employee under a relevant contract, whether paid or payable to the employee or another entity. (2) In this section— employment termination payment means— (a) an employment termination payment under the Income Tax Assessment Act 1997 (Cwlth), section 82-130; or (b) a payment that is not an employment termination payment under the Income Tax Assessment Act 1997 (Cwlth), section 82-130 only because it is received later than 12 months after the termination of a person's employment; or (c) a transitional termination payment under the Income Tax (Transitional Provisions) Act 1997 (Cwlth), section 82-10. 4 Other provisions about meaning of wages —superannuation contributions and GST (1) This section applies for the definition of wages in the schedule. Note— Part 2, divisions 1A to 1D contain other provisions that apply for the definition wages. (2) For paragraph (g) of the definition, a superannuation contribution paid or payable by an employer for an employee on or after 1 January 2000 is taken to be for the employee's services performed or rendered on or after 1 January 2000. (3) However, if the commissioner is satisfied any part of a superannuation contribution mentioned in subsection (2) is for an employee's services performed or rendered before 1 January 2000, the part is not wages. (4) Also, for paragraph (g) of the definition— (a) a superannuation contribution paid or payable by an employer to a superannuation, provident or retirement fund or scheme and not attributed by the employer as paid or payable for a particular employee or particular employees is taken to be paid or payable for the employee or employees decided by the commissioner; and (b) a superannuation contribution paid on or after 14 September 1999 and before 1 January 2000 for an employee's services to be performed or rendered on or after 1 January 2000 is taken to be paid on 1 January 2000. (5) For this Act, the amount or value of wages paid or payable to a person must be reduced by the relevant proportion of the amount of any GST paid or payable by the person on the supply to which the wages relate. (6) In this section— relevant proportion, for GST paid or payable on a supply to which wages relate, means the proportion that the amount or value of the wages bears to the consideration for the supply to which the wages relate. 4A [Repealed] 5 Meaning of change of status (1) A change of status happens for a person who is an employer if, during a financial year— (a) the person ceases to be an employer and does not intend to resume being an employer during the remainder of the year or the next financial year; or Example for paragraph (a)— There is no change of status for a fruit grower who ceases to pay wages after the fruit picking season but intends to resume paying wages later in the financial year or in the next financial year. (b) for a person who pays, or is liable to pay, taxable wages and who is not a group member—the person becomes a group member; or (c) for a person who pays, or is liable to pay, wages and is a non-DGE group member— (i) the person starts paying, or becomes liable to pay, taxable wages other than as a group member; or (ii) the person becomes the DGE for a group; or (d) the person ceases to be the DGE for a group; or (e) an administrator is appointed for the property of the person; or (f) the appointment of an administrator for the person's property ceases to have effect. (2) A change of status happens— (a) if subsection (1)(a) applies—on the first day the person— (i) does not pay, and is not liable to pay, wages; and (ii) does not intend to resume paying wages for the remainder of the year or the next financial year; or (b) if subsection (1)(b) applies—on the first day the person is a group member; or (c) if subsection (1)(c)(i) applies—on the first day the person pays, or is liable to pay, taxable wages other than as a group member; or (d) if subsection (1)(c)(ii) applies—on the first day of the periodic return period in which the person becomes the DGE for the group; or Note— See also section 75(1) and (2). (e) if subsection (1)(d) applies— (i) if all the group members cease to pay, or be liable to pay, wages as members of the group during the relevant periodic return period on or before the day the person ceases to be the DGE for the group—on the first day the person is not the DGE for the group; or (ii) otherwise—on the first day of the relevant periodic return period; or Note— See also section 75(3). (f) if subsection (1)(e) applies—on the day the administrator is appointed; or (g) if subsection (1)(f) applies—on the day after the appointment ceases to have effect. (3) For subsection (2)(e), the relevant periodic return period is the periodic return period in which the person ceases to be the DGE for the group. Notes— 1 If an employer who is not a group member changes status, the employer is required to lodge a final return for, and pay, payroll tax and the mental health levy for the final period. 2 If an employer who is the DGE for a group changes status, the DGE is required to lodge a final return for, and pay, payroll tax and the mental health levy for the final period. 3 If an employer who is a non-DGE group member changes status— (a) the employer is required to lodge a final return for, and pay, payroll tax for the final period; and (b) the DGE for the group is required to lodge a final return for, and pay, the mental health levy for the final period. 6 Meaning of final period The final period, for a change of status of a person (the relevant change of status) happening during a financial year, means the period— (a) starting on the latest of the following days in the year— (i) 1 July; (ii) the first day on which the person is required to register as an employer under part 3, division 1; (iii) if an earlier change of status has happened for the person during the year—the day of the change of status happening immediately before the relevant change of status; and (b) ending on the day before the relevant change of status happens. Example— An employer who is a group member from 1 July in a financial year ceases to be a group member on 1 September. The final period for the change of status is 1 July to 31 August. If the employer then ceases to pay, or be liable to pay, wages from 1 June, the final period for the second change of status is 1 September to 31 May. 6A Reference to periodic return period or return period Despite section 59(1A), a reference in this Act, other than section 59(1), to a periodic return period or return period in relation to an employer is taken to include the last periodic return period of a financial year for the employer. 7 Notes in text A note in the text of this Act is part of the Act. 8 Relationship of Act with Administration Act (1) This Act does not contain all the provisions about payroll tax or the mental health levy. (2) The Administration Act contains provisions dealing with, among other things, each of the following— (a) assessments of tax; (b) payments and refunds of tax; (c) imposition of interest and penalty tax; (d) objections and appeals against, or reviews of, assessments of tax; (e) record keeping obligations of taxpayers; (f) investigative powers, offences, legal proceedings and evidentiary matters; (g) service of documents; (h) registration of charitable institutions. Note— Under the Administration Act, section 3, that Act and this Act must be read together as if they together formed a single Act. Part 2 Liability to taxation Division 1 Imposition of liability Subdivision 1 Wages liable to payroll tax and mental health levy 8A Application of sdiv 1 (1) This subdivision applies for working out the wages paid or payable by an employer for services performed or rendered by a person that are liable to payroll tax and the mental health levy under this Act. (2) If wages are paid or payable for a person other than an employee, a reference to an employee in this subdivision includes a reference to the person. 9 Wages liable to payroll tax and mental health levy—nexus with Queensland (1) Wages are liable to payroll tax and the mental health levy under this Act if— (a) the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely in Queensland; or (b) the wages are paid or payable by an employer in relation to services performed or rendered by an employee in 2 or more States, or partly in at least 1 State and partly outside all States, and— (i) the employee is based in Queensland; or (ii) if the employee is not based in a State—the employer is based in Queensland; or (iii) if both the employee and the employer are not based in a State—the wages are paid or payable in Queensland; or (iv) if both the employee and the employer are not based in a State and the wages are not paid or payable in a State—the wages are paid or payable for services performed or rendered mainly in Queensland; or (c) the wages are paid or payable by an employer in relation to services performed or rendered by an employee entirely outside all States and are paid or payable in Queensland. Note— Section 15A provides an exemption for wages paid or payable for services performed entirely in another country for a continuous period of more than 6 months. (2) Subject to subsections (4) and (5), the question of whether wages are liable to payroll tax and the mental health levy under this Act must be decided by reference only to the services performed or rendered by the employee for the employer during the month in which the wages are paid or payable. (3) Wages paid or payable by an employer for an employee in a particular month are taken to be paid or payable in relation to the services performed or rendered by the employee for the employer during the month. Example— If wages paid in a month are paid to an employee for services performed or rendered over several months, the question of whether the wages are liable to payroll tax and the mental health levy under this Act must be decided by reference only to the services performed or rendered by the employee in the month the wages are paid. The services performed or rendered in previous months are disregarded. However, the services performed or rendered in previous months are relevant to the question of whether wages paid in the previous months are liable to payroll tax and the mental health levy under this Act. (4) If no services are performed or rendered by an employee for an employer during the month in which wages are paid or payable in relation to the employee— (a) the question of whether the wages are liable to payroll tax and the mental health levy under this Act must be decided by reference only to the services performed or rendered by the employee for the employer during the most recent earlier month in which the employee performed or rendered services for the employer; and (b) the wages are taken to be paid or payable in relation to the services performed or rendered by the employee for the employer in that most recent earlier month. (5) If no services were performed or rendered by an employee for an employer during the month in which wages are paid or payable in relation to the employee or in any earlier month— (a) the wages are taken to be paid or payable in relation to services performed or rendered by the employee in the month in which the wages are paid or payable; and (b) the services are taken to have been performed or rendered at a place where it may reasonably be expected that the services of the employee for the employer will first be performed. (6) All amounts of wages paid or payable in the same month by the same employer for the same employee must be aggregated for deciding whether the wages are liable to payroll tax and the mental health levy under this Act. Example— If 1 amount of wages is paid by an employer in a particular month in relation to services performed or rendered in Queensland, and another amount of wages is paid by the same employer in the same month in relation to services performed or rendered by the same employee in another State, the wages paid must be aggregated as if they were paid or payable in relation to all services performed or rendered by the employee in that month. Subsection (1)(b) would be applied to decide whether the wages are liable to payroll tax and the mental health levy under this Act. (7) If wages are paid in a different month from the month in which they are payable, the question of whether the wages are liable to payroll tax and the mental health levy under this Act must be decided by reference to the earlier of the relevant months. 9A State in which employee is based (1) For this Act, the State in which an employee is based is the State in which the employee's principal place of residence is located. (2) The State in which an employee is based must be decided by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (3) If more than 1 State would qualify as the State in which an employee is based during a month, the State in which the employee is based must be decided by reference to the state of affairs existing on the last day of that month. (4) An employee who does not have a principal place of residence is taken, for this Act, to be an employee who is not based in a State. (5) If wages are paid or payable to a corporate employee, the State in which the corporate employee is based must be worked out under section 9B instead of this section, as if a reference in section 9B to an employer were a reference to the employee. (6) In this section— corporate employee means a company— (a) taken to be an employee under section 13D or 13I; or (b) to whom a payment is made that is taken to be wages under section 13L or 50. 9B State in which employer is based (1) For this Act, the State in which an employer is based is— (a) if the employer has an ABN—the State in which the employer's registered business address is located; or (b) otherwise—the State in which the employer's principal place of business is located. (2) If wages are paid or payable in connection with a business carried on by an employer under a trust, the employer's registered business address is— (a) if the trust has an ABN—the registered business address of the trust; or (b) otherwise—the registered business address of the trustee of the trust. (3) If an employer has 2 or more registered business addresses located in different States at the same time, the State in which the employer is based at that time is the State in which the employer's principal place of business is located. (4) The State in which an employer is based must be decided by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (5) If more than 1 State would qualify as the State in which an employer is based in a month, the State in which the employer is based must be decided by reference to the state of affairs existing on the last day of that month. (6) An employer who has neither a registered business address nor a principal place of business is taken, for this Act, to be an employer who is not based in a State. (7) In this section— ABN means an ABN (Australian Business Number) under the A New Tax System (Australian Business Number) Act 1999 (Cwlth). registered business address means an address for service of notices under the A New Tax System (Australian Business Number) Act 1999 (Cwlth) as shown in the Australian Business Register kept under that Act. 9C Place and day of payment of wages (1) For this Act, wages are taken to have been paid at a place if, for the payment of the wages— (a) an instrument is sent or given or an amount is transferred by an employer to a person or a person's agent at the place; or (b) an instruction is given by an employer for the crediting of an amount to the account of a person or a person's agent at the place. (2) The wages are taken to have been paid on the day the instrument was sent or given, the amount was transferred, or the account was credited. (3) Subject to subsection (4), wages are taken to be payable at the place they are paid. (4) Wages that are not paid by the end of the month in which they are payable are taken to be payable at— (a) the place where wages were last paid by the employer for the employee; or (b) if wages have not previously been paid by the employer for the employee—the place where the employee last performed or rendered services for the employer before the wages became payable. (5) If wages paid or payable in the same month by the same employer for the same employee are paid or payable in more than 1 State, the wages paid or payable in that month are taken to be paid or payable in the State in which the highest proportion of the wages are paid or payable. Note— Section 9 requires all wages paid or payable in the same month by the same employer for the same employee to be aggregated for deciding whether the wages are liable to payroll tax or the mental health levy under this Act. Subsection (5) ensures only 1 State can be considered to be the State in which the wages are paid or payable. (6) This section is subject to section 13W. (7) In this section— instrument includes a cheque, bill of exchange, promissory note, money order, postal order issued by a post office or any other instrument. Subdivision 2 Other provisions about imposing liability for payroll tax 10 Imposition of payroll tax on taxable wages (1) Subject to, and in accordance with, the provisions of this Act, there shall be charged, levied and paid for the use of Her Majesty on all taxable wages payroll tax at the rate of 4.75% of the taxable wages paid or payable in the financial year ending 30 June 2020 or in a later financial year. (2) However, the rate of payroll tax is increased for an employer to 4.95% of taxable wages for each return period during which— (a) if the employer is a member of a group—the total of the taxable wages and interstate wages paid or payable by the members of the group is more than the threshold amount; or (b) otherwise—the total of the taxable wages and interstate wages paid or payable by the employer is more than the threshold amount. (3) The rate of payroll tax imposed under this section is subject to any discount that may apply under section 10A. (4) In this section— threshold amount means— (a) for an annual return period—$6,500,000; or (b) for a periodic return period that is a month—$541,666; or (c) for any other period—the amount worked out using the following formula— where— AA means $6,500,000. FYD means the number of days in the financial year in which the period occurs. PD means the number of days in the period. TA means the threshold amount. 10A Discount for regional employers (1) This section applies to the return periods occurring in the financial years ending 30 June 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029 and 2030. (2) Subject to subsection (4), for each return period, a regional employer is entitled to a discount of 1% on the rate of payroll tax imposed on taxable wages under section 10. (3) An employer is a regional employer for a return period if, during that period, the employer— (a) has a principal place of employment in regional Queensland; and (b) pays at least 85% of taxable wages to regional employees. (4) A regional employer is not entitled to a discount under subsection (2) for a return period ending after 30 June 2024 if the total amount of taxable wages paid or payable by the employer during that return period is more than the wage threshold. (5) In this section— principal place of employment, of an employer, means— (a) if the employer has an ABN—the place at which the employer's registered business address is located; or (b) otherwise—the place at which the employer's principal place of business is located. regional employee means an employee whose principal place of residence is located in regional Queensland. regional Queensland means the following areas of the State as identified under statistical area level 4 in the document Australian Statistical Geography Standard, published by the Australian Bureau of Statistics— (a) Cairns; (b) Central Queensland; (c) Darling Downs Maranoa; (d) Mackay - Isaac - Whitsunday; (e) Queensland - Outback; (f) Townsville; (g) Wide Bay. wage threshold means— (a) for an annual return period—$350,000,000; or (b) for a periodic return period that is a month—$29,166,666; or (c) for any other period—the amount worked out using the following formula— where— AA means $350,000,000. FYD means the number of days in the financial year in which the period occurs. PD means the number of days in the period. WT means the wage threshold. 11 When liability for payroll tax arises A liability for payroll tax imposed on taxable wages arises on the return date for lodgement by an employer of a return. 12 Employer to pay payroll tax Payroll tax shall be paid by the employer by whom the taxable wages are paid or payable. Subdivision 3 Other provisions about imposing liability for mental health levy 12A Imposition of mental health levy on taxable wages (1) A mental health levy is imposed under this part on particular taxable wages paid or payable in a financial year. (2) Amounts attributable to the levy may be used only for providing a service or infrastructure that is consistent with— (a) the main objects stated in the Mental Health Act 2016, section 3(1), including the way in which the main objects of that Act are to be achieved; or (b) the guiding principles stated in the Queensland Mental Health Commission Act 2013, section 5(2) to (5). (3) A reference in subsection (2) to amounts attributable to the levy does not include amounts of penalty tax or unpaid tax interest, a penalty amount under section 90 or an amount recovered because of the imposition of a penalty for an offence. 12B When liability for mental health levy arises Liability for the mental health levy imposed on taxable wages arises on the return date for lodgement by an employer of a return. 12C Particular employer to pay mental health levy The mental health levy must be paid by an employer as provided under divisions 5A, 5B and 5C. Subdivision 4 Value of taxable wages 13 Value of taxable wages (1) The value of taxable wages that are paid or payable in kind by an employer (other than fringe benefits under the Fringe Benefits Assessment Act) is the value under the regulations. (2) The employer must give evidence of the value of the taxable wages to the commissioner if asked by the commissioner. (3) If the commissioner is not satisfied with the evidence given by the employer, the commissioner may appoint a person to value the taxable wages. (4) If the value stated by the person appointed under subsection (3) is more than the value stated by the employer, the commissioner may claim all or part of the valuation costs from the employer. (5) The value of taxable wages comprising a fringe benefit under the Fringe Benefits Assessment Act is, unless otherwise prescribed by regulation, the value worked out using the following formula— where— FBT rate means the rate of fringe benefits tax imposed under the Fringe Benefits Assessment Act that applies when the employer's liability for payroll tax or the mental health levy on the taxable wages arises. TV means— (a) if paragraph (b) does not apply—the value that would be the taxable value of the taxable wages as a fringe benefit for the Fringe Benefits Assessment Act; or (b) if the fringe benefit is an amortised fringe benefit under the Fringe Benefits Assessment Act, section 65CA—the amortised amount of the benefit calculated under that section. V means the value of the taxable wages. (6) This section does not apply to taxable wages comprising the grant of a share or option to which division 1C applies. Note— See section 13U (Value of taxable wages). Division 1A Contractor provisions 13A Definitions for div 1A In this division— contract includes an agreement, arrangement or undertaking, whether formal or informal and whether express or implied. relevant contract employee see section 13D(2). re-supply, in relation to goods acquired from a person, includes— (a) supply to the person, or, if the person is a member of a group, to another group member, the acquired goods in an altered form or condition; and (b) supply to the person, or, if the person is a member of a group, to another group member, other goods in which the acquired goods have been incorporated. services includes results, whether goods or services, of work performed. supply includes— (a) supply by way of sale, exchange, lease, hire, or hire purchase; and (b) in relation to services, includes the providing, granting or conferring of services. 13B Meaning of relevant contract (1) A relevant contract is a contract under which a person (the designated person), in the course of a business carried on by the designated person— (a) supplies to another person services in relation to the performance of work; or (b) has supplied to the designated person the services of persons in relation to the performance of work; or (c) gives goods to individuals for work to be performed by those individuals in respect of the goods and for the goods to be re-supplied. (2) However, a relevant contract does not include a contract of service or a contract under which a person (the designated person), in the course of a business carried on by the designated person— (a) is supplied with services in relation to the performance of work, if the services are ancillary to— (i) the supply of goods under the contract by the person by whom the services are supplied; or (ii) the use of goods that are the property of the person by whom the services are supplied; or (b) is supplied with services in relation to the performance of work, if— (i) the services are of a kind not ordinarily required by the designated person and are performed or rendered by a person who ordinarily performs or renders services of that kind to the public generally; or (ii) the services are of a kind ordinarily required by the designated person for less than 180 days in a financial year; or (iii) the services are provided for a period that does not exceed 90 days or for periods that, in the aggregate, do not exceed 90 days in the relevant financial year and are not services— (A) provided by a person by whom similar services are provided to the designated person; or (B) in relation to the performance of work where any of the persons who perform the work also perform similar work for the designated person; for periods that, in the aggregate, exceed 90 days in the relevant financial year; or (iv) the services are supplied under a contract to which subparagraphs (i) to (iii) do not apply and the commissioner is satisfied the services are performed or rendered by a person who ordinarily performs or renders services of that kind to the public generally in the relevant financial year; or (c) is supplied by a person (the contractor) with services in relation to the performance of work under a contract to which paragraphs (a) and (b) do not apply, if the work to which the services relate is performed— (i) by 2 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (ii) if the contractor is a partnership of 2 or more individuals—by 1 or more of the members of the partnership and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (iii) if the contractor is an individual—by the contractor and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor; or (d) is supplied with— (i) services solely for or ancillary to the conveyance of goods by means of a vehicle provided by the person conveying them; or (ii) services solely in relation to the procurement of persons desiring to be insured by the designated person; or (iii) services in relation to the door-to-door sale of goods solely for domestic purposes on behalf of the designated person. (3) For subsection (2)(b), relevant financial year means the financial year during which the designated person is supplied with the services. (3A) Subsection (2)(a), (b), (c) or (d) does not apply to a contract under which any additional services or work of a kind not covered by the relevant subsection is supplied or performed. (4) Subsection (2) does not apply if the commissioner is satisfied the contract or arrangement under which the services are supplied was entered into with an intention either directly or indirectly of avoiding the payment of tax by any person. (5) An employment agency contract under which services are supplied by an employment agent, or a service provider is procured by an employment agent, is not a relevant contract. 13C Persons taken to be employers (1) For this Act, a person is taken to be an employer if, under a relevant contract— (a) the person supplies services to another person; or (b) the services of other persons are supplied to the person in relation to the performance of work; or (c) the person gives goods to individuals. (2) However, if a contract is a relevant contract under both section 13B(1)(a) and (b)— (a) the person to whom, under the contract, the services of persons are supplied in relation to the performance of work is taken to be an employer; and (b) despite subsection (1)(a), the person who, under the contract, supplies the services is not taken to be an employer. (3) A person taken to be an employer under this section is a relevant contract employer. 13D Persons taken to be employees (1) For this Act, a person is taken to be an employee if, under a relevant contract— (a) the person performs work in relation to which services are supplied to another person; or (b) the person is an individual who re-supplies goods to an employer. (2) A person taken to be an employee under this section is a relevant contract employee. 13E Amounts taken to be wages (1) For this Act, the following amounts paid or payable by a relevant contract employer under a relevant contract are taken to be wages— (a) amounts in relation to the performance of work for which services are supplied on or after 1 July 2008 under a relevant contract; (b) amounts in relation to the performance of work relating to the re-supply of goods by a relevant contract employee under a relevant contract on or after 1 July 2008. Note— Under section 132, this section applies only in relation to wages paid or payable on or after 1 July 2008. (2) Subsection (1)(a) is taken to include the following, to the extent the following do not otherwise comprise wages under this Act— (a) a payment— (i) made by the relevant contract employer in relation to a relevant contract employee; and (ii) that would be a superannuation contribution if it were made in relation to a person in the capacity of an employee; (b) the value of a share or option— (i) granted or liable to be granted by a relevant contract employer in relation to a relevant contract employee; and (ii) that would comprise wages under this Act if the share or option were granted in relation to a person in the capacity of an employee. (3) For subsection (1), an amount paid or payable on or after 1 July 2008 for the performance of work under a relevant contract is taken to be for services supplied, or goods re-supplied, on or after 1 July 2008. (4) However, if the commissioner is satisfied any part of an amount mentioned in subsection (3) is for services supplied, or goods re-supplied, before 1 July 2008, the part is not wages. (5) If an amount mentioned in subsection (1) is included in a larger amount paid or payable by the relevant contract employer under the relevant contract, the part of the larger amount that is not attributable to the performance of work mentioned in subsection (1)(a) or (b) is the part decided by the commissioner. 13F Liability for payroll tax or mental health levy for payments taken to be wages (1) If a relevant contract employer pays payroll tax on wages comprising a payment (the primary payment) in relation to the performance of work— (a) no other person is liable for payroll tax on the primary payment; and (b) another person who is liable to pay wages comprising a payment (a secondary payment) in relation to the work is not liable for payroll tax on the secondary payment. (2) If a relevant contract employer pays the mental health levy on wages comprising a payment (the primary payment) in relation to the performance of work— (a) no other person is liable for the mental health levy on the primary payment; and (b) another person who is liable to pay wages comprising a payment (a secondary payment) in relation to the work is not liable for the mental health levy on the secondary payment. (3) Subsection (2)(a) applies subject to part 2, divisions 5B and 5C. (4) Subsection (1)(b) or (2)(b) does not apply if the commissioner is satisfied either the secondary payment or the primary payment is made with an intention either directly or indirectly of avoiding the payment of tax by the relevant contract employer or another person. Division 1B Employment agents 13G Meaning of employment agency contract (1) An employment agency contract is a contract under which a person (an employment agent) procures the services of another person (a service provider) for a client of the employment agent. (2) However, a contract is not an employment agency contract if it is, or results in the creation of, a contract of employment between the service provider and the client. (3) Subsection (1) applies to a contract whether it is formal or informal, express or implied. (4) For this section— contract includes agreement, arrangement and undertaking. 13H Persons taken to be employers For this Act, the employment agent under an employment agency contract is taken to be an employer. 13I Persons taken to be employees For this Act, the person who performs work in relation to which services are supplied to the client under an employment agency contract is taken to be an employee of the employment agent under the contract. 13J Amounts taken to be wages (1) For this Act, the following are taken to be wages paid or payable by the employment agent under an employment agency contract— (a) an amount paid or payable in relation to the service provider in respect of the provision of services in connection with the contract; (b) the value of a benefit provided in relation to the provision of services in connection with the contract that would be a fringe benefit if provided to a person in the capacity of an employee; (c) a payment made in relation to the service provider that would be a superannuation contribution if made in relation to a person in the capacity of an employee. (2) However, subsection (1) does not apply to an amount, benefit or payment mentioned in the subsection if— (a) the amount, benefit or payment would be exempt from payroll tax or the mental health levy under division 2, other than section 14(2)(j), (k) or (l) or 14A, if it had been paid or provided by the client in relation to the service provider as an employee; and (b) the client has given the employment agent a declaration, in the approved form, that subsection (1) does not apply to the amount, benefit or payment. 13K Liability for payroll tax or mental health levy for payments taken to be wages (1) This section applies if an employment agent— (a) under an employment agency contract, procures the services of a service provider for a client of the agent; and (b) pays payroll tax or the mental health levy on an amount, benefit or payment mentioned in section 13J(1) that is paid or payable by the employment agent in connection with that contract. (2) No other person, including another person engaged to procure the services of the service provider for the employment agent's client, is liable for payroll tax or the mental health levy on wages paid or payable for the procurement or performance of services by the service provider for the client. (3) This section applies subject to sections 13L and 13LA and part 2, divisions 5B and 5C. 13L Employment agency contract reducing or avoiding liability to payroll tax or mental health levy (1) If the effect of an employment agency contract is to reduce or avoid the liability of a party to the contract to the assessment, imposition or payment of payroll tax or the mental health levy, the commissioner may— (a) disregard the contract; and (b) determine that any party to the contract is taken to be an employer for this Act; and (c) determine that any payment made in respect of the contract is taken to be wages for this Act. (2) A reference in subsection (1) to a party to a contract includes, for a contract to which a non-DGE member of a group is a party, a reference to the DGE for the group. (3) If the commissioner makes a determination under subsection (1), the commissioner must give written notice of the determination to the person taken to be an employer for the purposes of this Act. (4) The notice must state the facts on which the commissioner relies and the reasons for making the determination. 13LA Particular avoidance arrangements involving employment agents (1) This section applies if— (a) an avoidance arrangement exists in relation to an employment agency in a return period; and (b) the assumed non-adjusted tax and levy for the period is less than the assumed adjusted tax and levy for the period. (2) If this section applies in a return period, for the period— (a) if the avoidance arrangement involves an employment agent acting as trustee for a client of the employment agent under a trust or acting as agent for a client of the employment agent under an employment agency contract—section 92(1) does not apply to the trustee or agent, or in relation to the trust or employment agency contract; and (b) if the avoidance arrangement involves a client of an employment agent acquiring, or clients of an employment agent jointly acquiring, a controlling interest in the business of the employment agent referable to the client or clients—the client or clients is or are taken not to have the controlling interest; and (c) the employment agent, or each employment agent, involved in the employment agency is answerable as an employer for doing everything required to be done under this Act for the payment of wages by the employment agent that are subject to payroll tax or the mental health levy under this Act (including the giving of returns and payment of payroll tax or the mental health levy); and (d) if the employment agency involves more than 1 employment agent—the employment agents constitute a group. (3) For this section, a client has, or clients have, a controlling interest in a business if the client has, or the clients have, a controlling interest in the business under section 71. (4) In subsection (1)— (a) a reference to the assumed non-adjusted tax and levy for a return period is a reference to the total amount of payroll tax and the mental health levy that would be payable by the employment agent or agents involved in the employment agency for the period if the amount were calculated without applying any resultant provision; and (b) a reference to the assumed adjusted tax and levy for a return period is a reference to the total amount of payroll tax and the mental health levy that would be payable by the employment agent or agents involved in the employment agency for the period if the amount were calculated applying each relevant resultant provision. (5) To remove any doubt about the application of subsection (4)(b), it is declared that if an employment agency is involved in more than 1 avoidance arrangement in a return period, subsection (4)(b) is to be applied by first applying each relevant resultant provision to each avoidance arrangement and then calculating the total amount for the subsection. (6) In this section— avoidance arrangement means an arrangement involving an employment agency if the arrangement involves 1 or more of the following— (a) an employment agent acting as trustee for a client of the employment agent under a trust; (b) an employment agent acting as agent for a client of the employment agent under an employment agency contract; (c) a client of an employment agent acquiring, or clients of an employment agent jointly acquiring, a controlling interest in the business of the employment agent referable to the client or clients. client includes an individual or company that— (a) under the Duties Act 2001, section 164, is a related person of the client; or (b) is related to the client in another way prescribed under a regulation. employment agency means a business enterprise involving— (a) the business of an employment agent; or (b) the businesses of 2 or more employment agents. employment agency contract see the definition employment agent for this section. employment agent means a person who, by a contract, agreement, arrangement or undertaking (the employment agency contract), procures the services of another person (the worker) for a client of the agent, if the employment agency contract is not, and does not result in the creation of, a contract of employment between the worker and the client. resultant provision means subsection (2), paragraph (a), (b), (c) or (d). return period means— (a) for an employment agent who is required to lodge periodic returns—a periodic return period or financial year; or (b) for an employment agent who is exempt under section 62 from lodging periodic returns—a financial year. Division 1C Shares and options 13M Application of div 1C This division applies for paragraphs (j) and (k) of the definition of wages in the schedule. 13N Definitions for div 1C In this division— director, of a company, includes— (a) a person who, under a contract or other arrangement, is to be appointed as a director of the company; and (b) a former director of the company. granted, in relation to a share or option, see section 13O. grantee, in relation to a grant of a share or option comprising wages for this Act, means the employee or director to whom the share or option is granted. grantor, in relation to a grant of a share or option comprising wages for this Act, means the employer or company by whom the share or option is granted. relevant day see section 13Q(2). vesting day see section 13R(2). 13O When share or option is granted (1) A share is granted to a person if— (a) another person transfers the share to the person, other than by issuing the share to the person; or (b) another person allots the share to the person; or (c) the requirements for the grant of a share prescribed under a regulation are satisfied. (2) An option is granted to a person if— (a) another person transfers the right to the share to which the option relates to the person; or (b) another person creates the right to the share to which the option relates in the person; or (c) the requirements for the grant of an option prescribed under a regulation are satisfied. (3) Also, a share or an option is granted to a person if— (a) the person acquires a legal interest in the share or right from another person other than in a way mentioned in subsection (1) or (2); or (b) the person acquires a beneficial interest in the share or option from another person. 13P Grant of share because of exercise of option Despite paragraphs (j) and (k) of the definition of wages in the schedule, the grant of a share by a grantor does not comprise wages if— (a) the grantor is required to grant the share because a person has exercised an option; and (b) either— (i) the grant of the option to the person comprises wages for this Act; or (ii) the option was granted to the person before 1 July 2008. 13Q Day on which wages are paid or payable (1) Wages comprising the grant of a share or option are taken to be paid or payable on the relevant day. (2) The relevant day is the day the grantor elects under this division to treat as the day on which the wages comprising the grant of the share or option are paid or payable. 13R Election by grantor of relevant day (1) A grantor may elect to treat either of the following as the day on which wages comprising the grant of a share or option are paid or payable— (a) the day the share or option is granted to the grantee; (b) the vesting day for the share or option. (2) The vesting day— (a) for a share—is the first of the following days— (i) the day the share vests in the grantee; (ii) the day that is 7 years after the day the share is granted to the grantee; or (b) for an option—is the first of the following days— (i) the day the share to which the option relates is granted to the grantee; (ii) the day the grantee exercises a right under the option to have the share to which it relates transferred or allotted to, or vest in, the grantee; (iii) the day that is 7 years after the day the option is granted to the grantee. (3) For subsection (2), a share vests in the grantee when— (a) any conditions applying to the grant of the share have been met; and (b) the grantee's legal or beneficial interest in the share can not be rescinded. 13S Automatic election of relevant day (1) This section applies if a grantor grants a share or option to a grantee and any of the following applies— (a) the value of the grant of the share or option is not included in the taxable wages paid or payable by the grantor for a return period during which the share or option is granted; (b) the value of the taxable wages comprising the grant of the share or option is nil; (c) if the grantor were to elect to treat the day the share or option is granted as the relevant day, the wages would not be liable to payroll tax or the mental health levy. (2) If subsection (1)(a) applies, the grantor is taken to have elected to treat the vesting day for the share or option as the day on which the wages comprising the grant of the share or option are paid or payable. (3) If subsection (1)(b) or (c) applies, the grantor is taken to have elected to treat the day the share or option is granted as the day on which the wages comprising the grant of the share or option are paid or payable. (4) This section applies despite section 13R. 13T Effect of rescission or cancellation of share or option (1) If, before the vesting day, the grant of a share or option is withdrawn, cancelled or exchanged for consideration other than the grant of other shares or options— (a) the date of the withdrawal, cancellation or exchange is taken to be the vesting day for the share or option; and (b) despite section 13U(1)(a), the market value of the share or option on the vesting day is taken to be the amount of the consideration. (2) A grantor must reduce, by the relevant amount, the taxable wages paid or payable by the grantor for a financial year or final period, if— (a) the grantor included the value of a grant of a share or option in the taxable wages paid or payable by the grantor for a periodic return period falling in the financial year or final period; and (b) the grant is rescinded, during the financial year or final period, because the conditions of the grant were not met. (3) The commissioner must make a reassessment of a grantor's liability for payroll tax and the mental health levy for a financial year or final period, to reduce the taxable wages of the grantor by the relevant amount, if— (a) the grantor included the value of a grant of a share or option in the taxable wages paid or payable by the grantor for the financial year or final period; and (b) the grant is rescinded, after the end of the financial year or final period, because the conditions of the grant were not met. (4) However, if the grantor is a non-DGE group member, subsection (3) applies as if a reference to making a reassessment of a grantor's liability for the mental health levy were a reference to making a reassessment of the DGE's liability for the mental health levy. (5) For subsections (2) and (3), the relevant amount is the value of the grant of a share or option previously included in the taxable wages of the grantor under subsection (2)(a) or (3)(a). (6) Subsections (2) and (3) do not apply only because the grantee fails to exercise an option or otherwise exercise the grantee's rights in relation to a share or option. 13U Value of taxable wages (1) The value of taxable wages comprising the grant of a share or option is taken to be the amount equal to— (a) the value, in Australian currency, of the share or option on the relevant day; less (b) any consideration paid or given by the grantee for the share or option, other than consideration in the form of services performed. (2) For subsection (1)(a), the value of a share or option is— (a) the amount worked out under the regulations made under the Income Tax Assessment Act 1997 (Cwlth), section 83A-315, as applied by subsection (3); or Note— See the Income Tax Assessment Regulations 1997 (Cwlth), division 83A. (b) if paragraph (a) does not apply—the market value of the share or option. (3) For working out the value of a share or option under subsection (2)(a), the regulations mentioned in that subsection apply with the following changes— (a) the value of an option is worked out as if it were a right to acquire a beneficial interest in a share; (b) a reference to the acquisition of a beneficial interest in a share or right is taken to be a reference to the grant of a share or option; (c) with any other necessary changes. (4) In working out the market value of a share or option, anything that would prevent or restrict conversion of the share or option to money must be disregarded. (5) An employer must give evidence of the value of a share or option to the commissioner if asked by the commissioner. (6) If the commissioner is not satisfied with the evidence given by the employer under subsection (5), the commissioner may appoint a person to value the share or option. (7) If the value stated by the person appointed under subsection (6) is more than the value stated by the employer, the commissioner may claim all or part of the valuation costs from the employer. 13V When services are performed (1) Wages comprising the grant of a share or option by a company to a director of the company by way of remuneration for the appointment of the director, but not for services performed, are taken to be paid or payable for services performed or rendered during the month in which the relevant day falls. (2) Wages comprising the grant of a share or option to which subsection (1) does not apply are taken to be paid or payable for services performed or rendered during the month in which the relevant day falls. 13W Place where wages are paid or payable (1) Wages comprising the grant of a share or option are taken to be paid or payable in Queensland if— (a) for a share—the share is in a local company; or (b) for an option—the option is an option to acquire a share in a local company. (2) If subsection (1) does not apply, wages comprising the grant of a share or option are taken to be paid or payable elsewhere than in Queensland. (3) Subsection (4) applies to wages comprising the grant of a share or option by a company to a director of the company by way of remuneration for the appointment of the director, but not for services performed or rendered. (4) The wages are taken to be paid or payable for services performed or rendered in the place or places where it may reasonably be expected the services of the director for the company will be performed or rendered. (5) In this section— local company means— (a) a company that is— (i) registered or taken to be registered under the Corporations Act; and (ii) taken to be registered in Queensland for that Act; or (b) another body corporate incorporated under an Act. Division 1D Allowances Subdivision 1 Motor vehicle allowances 13X Definitions for sdiv 1 In this subdivision— averaging method means the method described in section 13ZB. averaging period see section 13ZD(1). business journey means— (a) a journey undertaken in a motor vehicle by a person, other than for applying the vehicle for a use that— (i) is a private use; and (ii) if the person is paid a motor vehicle allowance for the use—results in a fringe benefit under the Fringe Benefits Assessment Act being provided by the employer; or (b) a journey undertaken in a motor vehicle by a person in the course of producing assessable income of the person under the Income Tax Assessment Act 1936 (Cwlth). business vehicle, of an employee, means a motor vehicle provided or maintained by the employee for undertaking business journeys. continuous recording method means the method described in section 13ZA. number of exempt kilometres see section 13Y(4), definition K. relevant percentage see section 13ZB(4). 13Y Exempt component of motor vehicle allowance (1) For this Act, a reference to wages, in relation to a return period, does not include a reference to the exempt component of a motor vehicle allowance paid or payable to an employee for the period. (2) If the total motor vehicle allowance paid or payable to an employee for a return period is not more than the exempt component of the allowance, the allowance does not comprise wages for this Act. (3) If the total motor vehicle allowance paid or payable to an employee for a return period is more than the exempt component for the allowance, if any, only the amount of the allowance exceeding the exempt component comprises wages for this Act. (4) The exempt component of a motor vehicle allowance paid or payable to an employee for a business vehicle for a return period is the amount worked out using the following formula— where— E means the exempt component. K means the number of exempt kilometres travelled by the vehicle during the return period, worked out under section 13Z (the number of exempt kilometres). R means— (a) the rate determined under the Income Tax Assessment Act 1997 (Cwlth), section 28-25(4) for calculating a deduction for car expenses using the 'cents per kilometre' method for the financial year immediately preceding the financial year in which the allowance is paid or payable; or (b) if there is no rate under paragraph (a)—the rate prescribed by regulation. 13Z Working out the number of exempt kilometres (1) For section 13Y(4), the number of exempt kilometres must be worked out using either of the following chosen by the employer— (a) the continuous recording method; (b) the averaging method. Note— See section 13ZG (Switching between continuous recording and averaging methods) for requirements about switching between the continuous recording and averaging methods. (2) However, if the commissioner gives a written approval for the employer to use another method for working out the number of exempt kilometres, the number of exempt kilometres must be worked out using the approved method. Example of another method— using an estimate (3) An approval mentioned in subsection (2)— (a) may be given by the commissioner if the commissioner is satisfied use of the other method would be more appropriate in particular circumstances; and (b) may apply to— (i) the employer; or (ii) a class of employers that includes the employer. (4) As soon as practicable after giving an approval under subsection (2), the commissioner must give a copy of the approval to the employer or, if the approval applies to a class of employers, each employer to whom it applies. 13ZA Continuous recording method (1) This section applies if, under section 13Z(1)(a), the employer uses the continuous recording method to work out the number of exempt kilometres for a business vehicle. (2) The employer must keep a record of the following details— (a) the odometer readings at the beginning and end of each business journey undertaken by the employee during the return period by means of the vehicle; (b) the specific purpose for which the journey was undertaken; (c) the distance travelled. Note— See the Administration Act, section 118 (Period for keeping records). (3) The number of exempt kilometres is the distance of all business journeys mentioned in subsection (2)(a), worked out using the odometer readings mentioned in the subsection. 13ZB Averaging method—how it works (1) This section applies if, un