Payroll Tax Harmonisation

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Payroll Tax Harmonisation
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Background

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

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Harmonisation - background

• All states have been exploring opportunities
• NSW Victoria harmonised on 1 July 2007
• Tasmania to join NSW/Vic on 1 July 2008

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Harmonisation is not

• Aligned payroll tax rates
• Aligned payroll tax thresholds

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Harmonisation is

• Consistency in.
• what is taxable
• exemptions rebates
• rules for grouping
• anti-avoidance provisions

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Harmonisation could be

• One-stop shop payments
• Single return forms
• Single audits
• Consistent software

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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

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Allowances

• Alignment of vehicle and accommodation
  allowances with FBT
• Claim the ATOs large car rate
• Claim the lowest capital city rate for the lowest
  salary band

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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

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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

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Grouping Provisions

• Test for grouping through the inter-use of
  employees is being expanded
• Expanded test will capture quasi-outsourcing
  arrangements
• Commissioners discretion to de-group will remain

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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.

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Timetable
Govt approval to proceed
Draft new PTX legislation
Parliamentary approval of new legislation
Taxpayer education campaign
Harmonised model applies
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Education program

• Web Site updates
• Media Campaign
• Update of relevant SRO Publications
• Client mail outs and communications with peak
  bodies

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Useful links

• NSW legislation
• http//www.legislation.nsw.gov.au
• Victorian legislation
• http//www.legislation.vic.gov.au