Payroll Tax Act 2008 (Tas)

Payroll Tax Act 2008 An Act to provide for a tax on employers in respect of certain wages, to harmonise payroll tax law with New South Wales and Victoria, to repeal the Pay-roll Tax Act 1971 , and for other purposes [Royal Assent 26 June 2008] Be it enacted by His Excellency the Governor of Tasmania, by and with the advice and consent of the Legislative Council and House of Assembly, in Parliament assembled, as follows: PART 1 - Preliminary 1. Short title This Act may be cited as the Payroll Tax Act 2008 . 2. Commencement (1) Except as provided in this section, this Act commences on 1 July 2008 but, if it does not receive the Royal Assent on or before that day, it is taken to have commenced on that day. (2) Part 4 of Schedule 2 is taken to have commenced on 1 July 2003. 3. Definitions (1) In this Act – ABN means the ABN (Australian Business Number) for an entity within the meaning of the A New Tax System (Australian Business Number) Act 1999 of the Commonwealth; agent includes – (a) a person who, in this jurisdiction, for or on behalf of another person outside this jurisdiction, holds or has the management or control of the business of that other person; and (b) a person who, by an order of the Commissioner, is declared to be an agent or the sole agent for any other person for the purposes of this Act and on whom notice of that order has been served; Australia means the States of the Commonwealth and the Territories; Australian jurisdiction means a State or a Territory; coastal waters of the State has the same meaning as "coastal waters" in the Coastal and Other Waters (Application of State Laws) Act 1982 ; Commissioner means the Commissioner of State Revenue appointed as such under the Taxation Administration Act 1997 ; company includes all bodies and associations (corporate and unincorporate) and partnerships; corporation has the same meaning as in section 9 of the Corporations Act 2001 of the Commonwealth; corresponding law means a law in force in another State or a Territory relating to the imposition upon employers of a tax on wages paid or payable by them and the assessment and collection of that tax; designated group employer means a member designated for a group in accordance with section 80 ; director of a company includes a member of the governing body of the company; employer means a person who pays or is liable to pay wages and includes – (a) the Crown in any of its capacities; and (b) a person taken to be an employer by or under this Act; and (c) a public, local or municipal body or authority constituted under the law of the Commonwealth or of a State or Territory unless – being an authority constituted under the law of the Commonwealth, it is immune from the operation of this Act; employment agency contract has the meaning given in section 37 ; employment agent has the meaning given in section 37 ; exempt wages mean wages that are declared by or under this Act to be exempt wages; exercise a function includes perform a duty; FBTA Act means the Fringe Benefits Tax Assessment Act 1986 of the Commonwealth; financial year means each year commencing on 1 July; fringe benefit has the same meaning as in the FBTA Act but does not include – (a) a tax-exempt body entertainment fringe benefit within the meaning of that Act; or (b) anything that is prescribed by the regulations under this Act not to be a fringe benefit for the purposes of this definition; function includes a power, authority or duty; group has the meaning given in section 67 ; GST has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth except that it includes notional GST of the kind for which payments may be made under Part 3 of the National Taxation Reform (Commonwealth-State Relations) Act 1999 by a person that is a State entity within the meaning of that Act; instrument includes a cheque, bill of exchange, promissory note, money order and postal order issued by a post office; interstate wages means wages that are taxable wages within the meaning of a corresponding law; ITAA means the Income Tax Assessment Act 1997 of the Commonwealth; liquidator means the person who, whether or not appointed as liquidator, is the person required by law to carry out the winding-up of a company; month means the month of January, February, March, April, May, June, July, August, September, October, November and December; option means an option or right, whether actual, prospective or contingent, of a person to acquire a share or to have a share transferred or allotted to the person; paid, in relation to wages, includes provided, conferred and assigned, and pay and payable have corresponding meanings; payroll tax means tax imposed by section 6 ; perform, in relation to services, includes render; registered business address means an address for service of notices, under the A New Tax System (Australian Business Number) Act 1999 of the Commonwealth, on an entity that has an ABN, as shown in the Australian Business Register under that Act; return period, in relation to an employer, means a period relating to which that employer is required to lodge a return under this Act; share means a share in a company and includes a stapled security; superannuation contribution has the meaning given in section 17(2) ; taxable wages has the meaning given in section 10 ; termination payment has the meaning given in section 27 ; Territories means the Australian Capital Territory (including the Jervis Bay Territory) and the Northern Territory; this jurisdiction means Tasmania and the coastal waters of the State; voting share has the same meaning as in section 9 of the Corporations Act 2001 of the Commonwealth; wages has the meaning given in Part 3 . (2) Notes included in this Act do not form part of this Act. 4. Taxation Administration Act 1997 This Act is to be read together with the Taxation Administration Act 1997 which provides for the administration and enforcement of this Act and other taxation laws. 5. Act binds the Crown (1) This Act binds the Crown in right of this jurisdiction and, so far as the legislative power of Parliament permits, the Crown in all its other capacities. (2) Nothing in this Act makes the Crown in any of its capacities liable to be prosecuted for an offence. PART 2 - Imposition of Payroll Tax Division 1 - Imposition of tax 6. Imposition of payroll tax Payroll tax is imposed on all taxable wages. 7. Who is liable for payroll tax The employer by whom taxable wages are paid or payable is liable to pay payroll tax on the wages. 8. Amount of payroll tax The amount of payroll tax payable by an employer is to be ascertained in accordance with Schedules 1 and 2 . 9. When must payroll tax be paid (1) A person who is liable to pay payroll tax on taxable wages must pay the tax – (a) within 7 days after the end of the month in which those wages were paid or payable, other than the month of June; and (b) within 21 days after the end of the month of June in relation to taxable wages paid or payable in the month of June. (2) However, if the Commissioner has reason to believe that a person may leave Australia before any payroll tax becomes payable by the person, the tax is payable on the day fixed by the Commissioner by notice served on the person. Division 2 - Taxable wages 10. What are taxable wages? (1) For the purposes of this Act, "taxable wages" are wages that are taxable in this jurisdiction. (2) However, exempt wages are not taxable wages. 11. Wages that are taxable in this jurisdiction (1) For the purposes of this Act, wages are taxable in this jurisdiction if – (a) wages are paid or payable by an employer for or in relation to services performed by an employee wholly in this jurisdiction; or (b) wages are paid or payable by an employer for or in relation to services performed by an employee in 2 or more Australian jurisdictions, or partly in one or more Australian jurisdictions and partly outside all Australian jurisdictions, and – (i) the employee is based in this jurisdiction; or (ii) the employer is based in this jurisdiction (in a case where the employee is not based in an Australian jurisdiction); or (iii) the wages are paid or payable in this jurisdiction (in a case where both the employee and the employer are not based in an Australian jurisdiction); or (iv) the wages are paid or payable for services performed mainly in this jurisdiction (in a case where both the employee and the employer are not based in an Australian jurisdiction and the wages are not paid or payable in an Australian jurisdiction); or (c) the wages are paid or payable by an employer for or in relation to services performed by an employee wholly outside all Australian jurisdictions and are paid or payable in this jurisdiction. Note: Section 66A provides an exemption for wages paid or payable for services performed wholly in one or more other countries for a continuous period of more than 6 months. (2) The question of whether wages are taxable in this jurisdiction is to be determined by reference only to the services performed by the employee in respect of the employer during the month in which the wages are paid or payable, subject to this section. (3) Any wages paid or payable by an employer in respect of an employee in a particular month are taken to be paid or payable for or in relation to the services performed by the employee in respect of the employer during that month. Note: For example, if wages paid in a month are paid to an employee for services performed over several months, the question of whether the wages are taxable in this jurisdiction is to be determined by reference only to services performed by the employee in the month in which the wages are paid. The services performed in previous months are disregarded. (The services performed in previous months will be relevant to the question of whether wages paid in those previous months are taxable in this jurisdiction.) (4) If no services are performed by an employee in respect of an employer during the month in which wages are paid or payable to or in relation to the employee – (a) the question of whether the wages are taxable in this jurisdiction is to be determined by reference only to the services performed by the employee in respect of the employer during the most recent prior month in which the employee performed services in respect of the employer; and (b) the wages are taken to be paid or payable for or in relation to the services performed by the employee in respect of the employer during that most recent prior month. (5) If no services were performed by an employee in respect of an employer during the month in which wages are paid or payable to or in relation to the employee or in any prior month – (a) the wages are taken to be paid or payable for or in relation to services performed by the employee in the month in which the wages are paid or payable; and (b) the services are taken to have been performed at a place or places where it may be reasonably expected that the services of the employee in respect of the employer will be performed. (6) All amounts of wages paid or payable in the same month by the same employer in respect of the same employee are to be aggregated for the purposes of determining whether they are taxable in this jurisdiction (as if they were paid or payable for all services performed by the employee in the month in which the wages are paid or payable, or the most recent prior month, as the case requires). Note: For example, if one amount of wages is paid by an employer in a particular month for services performed in this jurisdiction, and another amount of wages is paid by the same employer in the same month for services performed by the same employee in another Australian jurisdiction, the wages paid are to be aggregated (as if they were paid for all services performed by the employee in that month). Accordingly, subsection (1)(b) would be applied for the purpose of determining whether the wages are taxable in this jurisdiction. (7) If wages are paid in a different month from the month in which they are payable, the question of whether the wages are taxable in this jurisdiction is to be determined by reference to the earlier of the relevant months. 11A. Jurisdiction in which employee is based (1) For the purposes of this Act, the jurisdiction in which an employee is based is the jurisdiction in which the employee's principal place of residence is located. (2) The jurisdiction in which an employee is based is to be determined by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (3) If more than one jurisdiction would qualify as the jurisdiction in which an employee is based during a month, the jurisdiction in which the employee is based is to be determined 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 the purposes of this Act, to be an employee who is not based in an Australian jurisdiction. (5) In the case of wages paid or payable to a corporate employee, the jurisdiction in which the employee is based is to be determined in accordance with section 11B instead of this section (as if a reference in section 11B to an employer were a reference to an employee). (6) In this section, a "corporate employee" is a company that is taken to be an employee under section 34 or 39 or a company to whom a payment is made that is taken to be wages payable to an employee under section 42 or 47 . 11B. Jurisdiction in which employer is based (1) For the purposes of this Act, the jurisdiction in which an employer is based is – (a) the jurisdiction in which the employer's registered business address is located (if the employer has an ABN); or (b) the jurisdiction in which the employer's principal place of business is located (in any other case). (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 the registered business address of the trust or, if the trust does not have an ABN, the registered business address of the trustee of the trust. (3) If an employer has registered business addresses located in different jurisdictions at the same point in time, the jurisdiction in which the employer is based at that point in time is the jurisdiction in which the employer's principal place of business is located. (4) The jurisdiction in which an employer is based is to be determined by reference to the state of affairs existing during the month in which the relevant wages are paid or payable. (5) If more than one jurisdiction would qualify as the jurisdiction in which an employer is based during a month, the jurisdiction in which the employer is based is to be determined 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 the purposes of this Act, to be an employer who is not based in an Australian jurisdiction. 11C. Place and date of payment of wages (1) For the purposes of this Act, wages are taken to have been paid at a place if, for the purpose of the payment of those 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 that 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 that place. (2) The wages are taken to have been paid on the date that the instrument was sent or given, the amount was transferred or the account credited in accordance with the instruction (as the case requires). (3) Wages are taken to be payable at the place at which they are paid, subject to this section. (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 to the employee; or (b) if wages have not previously been paid by the employer to the employee – the place where the employee last performed services in respect of the employer before the wages became payable. (5) If wages paid or payable in the same month by the same employer in respect of the same employee are paid or payable in more than one Australian jurisdiction, the wages paid or payable in that month are taken to be paid or payable in the Australian jurisdiction in which the highest proportion of the wages are paid or payable. Note: Section 11 requires all wages paid or payable in the same month by the same employer in respect of the same employee to be aggregated for the purpose of determining whether the wages are taxable in this jurisdiction. The above provision ensures only one Australian jurisdiction can be considered to be the jurisdiction in which the wages are paid or payable. Division 3 - Other 12. Payroll tax paid under corresponding applied law (1) For the purposes of ascertaining the payroll tax payable under this Act by an employer who during a return period pays taxable wages and Commonwealth place wages, there is to be deducted from the amount of payroll tax payable by the employer under this Act the amount of payroll tax payable by the employer under the corresponding applied law. (2) In this section – Commonwealth Act means the Commonwealth Places (Mirror Taxes) Act 1998 of the Commonwealth; Commonwealth place wages means wages that would be taxable wages within the meaning of the corresponding applied law if the corresponding applied law applied in relation to each place in this jurisdiction that is a Commonwealth place; corresponding applied law means the provisions of the Payroll Tax Act 2008 that would apply in relation to each place in this jurisdiction that is a Commonwealth place, pursuant to section 6(2) of the Commonwealth Act, if those provisions were "excluded provisions" within the meaning of section 6(1) of the Commonwealth Act. PART 3 - Wages Division 1 - General concept of wages 13. What are wages? (1) For the purposes of this Act, "wages" mean wages, remuneration, salary, commission, bonuses or allowances paid or payable to an employee, including – (a) an amount paid or payable by way of remuneration to a person holding an office under the Crown or in the service of the Crown; and (b) an amount paid or payable under any prescribed classes of contracts to the extent to which that payment is attributable to labour; and (c) an amount paid or payable by a company by way of remuneration to or in relation to a director of that company; and (d) an amount paid or payable by way of commission to an insurance or time-payment canvasser or collector; and (e) an amount that is included as or taken to be wages by any other provision of this Act. (2) For the purposes of this Act, wages, remuneration, salary, commission, bonuses or allowances are wages – (a) whether paid or payable at piece work rates or otherwise; and (b) whether paid or payable in cash or in kind. (3) This Act applies in respect of wages referred to in subsection (1)(a) , (b) , (c) , (d) and (e) that are paid or payable to or in relation to a person who is not an employee in the same way as it applies to wages paid or payable to an employee (as if a reference in this Act to an employer included a reference to any such person). Division 2 - Fringe benefits 14. Wages include fringe benefits (1) For the purposes of this Act, "wages" include a fringe benefit. (2) Subsection (1) does not apply to benefits that are exempt benefits for the purposes of the FBTA Act (other than deposits to the Superannuation Holding Accounts Special Account within the meaning of the Small Superannuation Accounts Act 1995 of the Commonwealth). 15. Value of wages comprising fringe benefits (1) For the purposes of this Act, the value of wages comprising a fringe benefit is to be determined in accordance with the formula – where – TV is the value that would be the taxable value of the benefit as a fringe benefit for the purposes of the FBTA Act; FBT rate is the rate of fringe benefits tax imposed by the FBTA Act that applies when the liability to payroll tax under this Act arises. (2) In this Act, a reference to taxable wages that were paid or payable by an employer during a month is, in relation to taxable wages comprising fringe benefits – (a) a reference to the value of the fringe benefits paid or payable by the employer during the month; or (b) if an election by the employer is in force under section 16 , a reference to an amount calculated in accordance with that section. (3) In this Act, a reference to taxable wages that were paid or payable by an employer during a year is, in relation to taxable wages comprising fringe benefits, a reference to an amount calculated by adding together the amounts under subsection (2)(a) or (b) (or subsection (2)(a) and (b) ), as the case requires, for the months of that year. 16. Employer election regarding taxable value of fringe benefits (1) An employer who has paid or is liable to pay fringe benefits tax imposed by the FBTA Act in respect of a period of not less than 15 months before 30 June in any year may elect to include as the value of the fringe benefits paid or payable by the employer during the month concerned – (a) in a return lodged in relation to each of the first 11 months occurring after 30 June in that year, 1/12 of the amount determined in accordance with subsection (2) or that part of that amount as, in accordance with section 10 , comprises taxable wages for the year of tax (within the meaning of the FBTA Act) ending on 31 March preceding the commencement of the current financial year; and (b) in the return lodged in relation to the 12th month, the amount determined in accordance with subsection (2) or that part of that amount as, in accordance with section 10 , comprises taxable wages for the year of tax (within the meaning of the FBTA Act) ending on 31 March preceding that month, less the total of the amounts of fringe benefits included in the returns for each of the preceding 11 months. (2) The amount determined in accordance with this subsection is to be determined in accordance with the formula – where – AFBA is the aggregate fringe benefits amount within the meaning of section 136 of the FBTA Act; FBT rate is the rate of fringe benefits tax imposed by the FBTA Act that applies when the liability to payroll tax under this Act arises. (3) An election under subsection (1) takes effect when it is notified to the Commissioner in the form approved by the Commissioner. (4) After an employer has made an election under subsection (1) , the employer must lodge returns containing amounts calculated in accordance with the election unless the Commissioner approves, by notice in writing given to the employer, the termination of the election and allows the employer to include the value referred to in section 15(2)(a) . (5) If an employer ceases to be liable to pay payroll tax, the value of taxable wages comprising fringe benefits to be included in the employer's final return is (irrespective of whether or not the employer has made an election under subsection (1) ) the value of the fringe benefits paid or payable by the employer for the period commencing on and including the preceding 1 July until the date on which the employer ceases to be liable to payroll tax, less the value of the fringe benefits paid or payable by the employer during that period on which payroll tax has been paid. Division 3 - Superannuation contributions 17. Wages include superannuation contributions (1) For the purposes of this Act, "wages" include a superannuation contribution. (2) A "superannuation contribution" is a contribution paid or payable by an employer in respect of an employee – (a) to or as a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 of the Commonwealth; or (b) as a superannuation guarantee charge within the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth; or (c) to or as any other form of superannuation, provident or retirement fund or scheme including – (i) the Superannuation Holding Accounts Special Account within the meaning of the Small Superannuation Accounts Act 1995 of the Commonwealth; and (ii) a retirement savings account within the meaning of the Retirement Savings Accounts Act 1997 of the Commonwealth; and (iii) a wholly or partly unfunded fund or scheme. (3) Setting aside any money or anything that is worth money as, or as part of, a superannuation fund, superannuation guarantee charge or any other form of superannuation, provident or retirement fund or scheme is taken to be paying a superannuation contribution. (4) Making a superannuation contribution of anything that is worth money is taken to be paying a superannuation contribution of the amount equal to its value, and its value is to be worked out in accordance with section 43 as if that section referred to the contribution instead of to wages. (5) A superannuation, provident or retirement fund or scheme is unfunded to the extent that money paid or payable by an employer in respect of an employee covered by the fund or scheme is not paid or payable during the employee's period of service with the employer. (6) In this section – employee includes any person to whom, by virtue of a paragraph of the definition of "wages" in section 13(1) , an amount paid or payable in the circumstances referred to in that paragraph constitutes wages. Division 4 - Shares and options 18. Inclusion of grant of shares and options as wages (1) For the purposes of this Act, "wages" include the grant of a share or option to an employee by an employer in respect of services performed by the employee if the share or option is an ESS interest (within the meaning of section 83A-10 of the Income Tax Assessment Act 1997 of the Commonwealth) and is granted to the employee under an employee share scheme (within the meaning of that section). Note: A grant of a share or an option to an employee by an employer that is not an ESS interest will be taxable as a fringe benefit under Division 2 of this Part. (2) Any such wages are taken, for the purpose of the imposition of payroll tax, to be paid or payable on the relevant day. (3) For the purposes of this Division, the "relevant day" is the day that the employer elects in accordance with this Division to treat as the day on which the wages are paid or payable. (4) To avoid doubt, the grant of a share or option is valuable consideration for the purposes of section 46 . 19. Choice of relevant day (1) The employer can elect to treat as the "relevant day" either the date on which the share or option is granted to the employee or the vesting date. (2) A share or option is "granted" to a person if – (a) another person transfers the share or option to that person (other than, in the case of a share, by issuing the share to that person); or (b) in the case of a share – another person allots the share to that person; or (c) in the case of an option – another person confers the option on, or otherwise creates the option in, that person; or (d) the person otherwise acquires a legal interest in the share or option from another person; or (e) the person acquires a beneficial interest in the share or option from another person. (2A) To avoid doubt, if an employee acquires a right to be granted a share or an option, or some other material benefit, at the election of the employer, the share or option is not granted until the employer elects to grant the share or option. (3) The "vesting date" in respect of a share is one of the following dates (whichever happens first): (a) the date on which the share vests in the employee (that is, when any conditons applying to the grant of the share have been met and the employee's legal or beneficial interest in the share cannot be rescinded); (b) the date at the end of the period of 7 years from the date on which the share is granted to the employee. (4) The "vesting date" in respect of an option is one of the following dates (whichever happens first): (a) the date on which the share to which the option relates is granted to the employee; (b) the date on which the employee exercises a right under the option to have the share the subject of the option transferred to, allotted to or vested in him or her; (c) the date at the end of the period of 7 years from the date on which the option is granted to the employee. 20. Deemed choice of relevant day in special cases (1) If an employer grants a share or an option to an employee and the value of the grant of the share or option is not inclu