Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES AND ENERGY RESEARCH AND DEVELOPMENT CORPORATIONS (LIABILITY TO PAY-ROLL TAX) REGULATIONS 1995 NO. 306

STATUTORY RULES 1995 No. 306

Issued by the Authority of the Minister for Primary Industries and Energy

Primary Industries and Energy Research and Development Act 1989

Primary Industries and Energy Research and Development Corporations (Liability to Pay-roll Tax) Regulations

Section 8 of the Primary Industries and Energy Research and Development Act 1989 (the Act) provides for the making of regulations for the establishment of a Research and Development Corporation (R&D Corporation) in respect of a primary industry or class of primary industries.

To date, regulations have been made establishing the Cotton R&D Corporation, Dairy R&D Corporation, Energy R&D Corporation, Fisheries R&D Corporation, Forest and Wood Products R&D Corporation, Grains R&D Corporation, Grape and Wine R&D Corporation, Land and Water Resources R&D Corporation, Rural Industries R&D Corporation, Sugar R&D Corporation and Tobacco R&D Corporation.

Subsection 46(2) provides that an R&D Corporation is not liable to taxation under a law of a State or Territory, subject to subsection 46(3), which permits regulations to be made providing that subsection 46(2) does not apply in relation to a specified law of a State or Territory.

Subsection 1-49(1) of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The new regulations provide-as follows:

Regulation 1 - the Regulations may be cited as the Primary Industries and Energy Research and Development Corporations (Liability to Pay-roll Tax) Regulations.

Regulation 2 - defines "Act" to mean Primary Industries and Energy Research and Development Act 1989.

Regulation 3 - provides that subsection 46(2) of the Act does not apply in relation to taxation under the pay-roll tax legislation of any of the States or the Northern Territory or the Australian Capital Territory. The effect of this regulation is to make the R&D Corporations liable to State and Territory pay-roll tax in those States and Territories in which they operate.

The Chairpersons of the Boards of the R&D Corporations were advised by the Minister for Primary Industries and Energy on 11 April 1995 of the proposal for the regulations. NO objection was received to the proposal to make regulations removing the exemption from pay-roll tax.

Most of the R&D Corporations are currently under the threshold for the payment of pay-roll tax, and so will not become liable to pay it even following the making of these regulations. The purpose in making blanket regulations to cover all R&D

Corporations established under the Act is so that a particular R&D Corporation will become liable to pay the tax once it goes over the threshold, without a regulation having to be made for each body.

The regulations commenced on gazettal.