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Taxation Legislation (Miscellaneous Amendments) Bill 2009
NOTES ON CLAUSES
Clause 1 Short title.
Clause 2 Provides for the Act to commence on the day of Royal Assent, with
the exception of the amendments to the Payroll Tax Act 2008, which
apply retrospectively from 1 July 2009.
Clause 3 Repeals this Act ninety days after Royal Assent.
Clause 4 Defines the Duties Act 2001 as being the Principal Act for Part 2 of
this Act.
Clause 5 Removes obsolete definitions, which became redundant upon the
abolition of non-real business asset duty and mortgage duty.
Clause 6 Defines the Land Tax Act 2000 as being the Principal Act for Part 3
of this Act.
Clause 7 Removes the previous definition of "owner" and replaces it with a
reference to a new section 3A that defines "owner" in respect of
land.
Clause 8 Inserts a new section 3A defining "owner" in respect of land.
Sub-section 1 is equivalent to the previous definition of "owner",
which is limited to persons entitled to the estate in fee simple in the
land or those prescribed by regulations.
Sub-section 2 provides that a life tenant, appearing on the title as
such, is deemed to be the "owner" of land in place of the person
entitled to the fee simple in remainder for the purpose of the Land
Tax Act 2000. This provision is modelled on the equivalent provision
in the Victorian Land Tax Act 2005, section 11.
Clause 9 Defines the Payroll Tax Act 2008 as being the Principal Act for Part
4 of this Act.
Clause 10 Inserts in alphabetical order in section 3(1) the following new
definitions:
"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;
"Australian jurisdiction" means a State or a Territory;
"instrument" includes a cheque, bill of exchange, promissory note,
money order or a postal order issued by a post office; and
"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 kept under that Act.
Clause 11 Sections 10 and 11 of the Payroll tax Act 2007 are substituted.
New section 10 provides that taxable wages are wages (as defined
in section 13 of the Payroll Tax Act 2007) that are taxable in this
jurisdiction, but do not include exempt wages.
New section 11 provides the jurisdictional nexus for determining
whether wages are taxable in this jurisdiction and a number of
related rules on how to apply the nexus.
Sub-section (1)(a) provides that wages are taxable in this
jurisdiction if the wages relate to services performed wholly in this
jurisdiction.
Sub-section (1)(b) provides the jurisdictional nexus for wages
relating to services performed in two or more Australian jurisdictions
Sub-section (1)(c) provides the jurisdictional nexus for wages
relating to services performed wholly outside all Australian
jurisdictions. The wages are taxable in this jurisdiction if the wages
are paid or payable in this jurisdiction, as determined by new section
11C. Note that new section 66A exempts wages paid or payable for
services performed wholly in one or more other countries for a
continuous period of more than 6 months.
Sub-section (2) provides that, in determining the question of
whether wages are taxable in this jurisdiction, regard must be had
only to the services performed during the month in respect of which
the question arises, subject to new section 11.
Sub-section (3) deems wages paid or payable by an employer in
respect of an employee in a particular month to be related to
services performed by that employee in respect of the employer
during that month. A note is included to provide an example of how
the provision operates.
Sub-section (4) operates when no services are performed by an
employee during the month in which wages are paid or payable. In
determining whether the wages are taxable in this jurisdiction, the
nexus must be applied by reference to services performed by the
employee during the most recent prior month in which the employee
did perform services in respect of the employer. The wages are
deemed to be related to services performed by that employee in that
most recent prior month.
Sub-section (5) operates when no services have been performed by
an employee during the month in which wages are paid or payable
or in any prior month. For the purpose of determining whether the
wages are taxable in this jurisdiction, services are deemed to have
been performed at a place or places where it may be reasonably
expected that the services will be performed; and the wages are
deemed to be related to services performed by the employee in the
month in which the wages are paid or payable.
Sub-section (6) provides that, for the purpose of determining
whether the wages are taxable in this jurisdiction, 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. A note is
included to provide an example how the provision operates.
Sub-section (7) provides that 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 month.
New section 11A sets out the principles to be applied to determine
in which jurisdiction an employee is based. They are relevant to the
application of the nexus in new section 11(1)(b)(i).
Sub-section (1) provides that the jurisdiction in which an employee
is based is where the employee's principal place of residence is
located.
Sub-section (2) provides that, to determine the jurisdiction in which
an employee is based, regard must be had only to the state of
affairs existing during the month in which the relevant wages are
paid or payable.
Sub-section (3) clarifies that, if more than one jurisdiction would
qualify as the jurisdiction in which an employee is based during a
month, the question must be determined by having regard to the
state of affairs existing on the last day of that month.
Sub-section (4) provides that, if an employee does not have a
principal place of residence, the employee is taken not to be based
in an Australian jurisdiction.
Sub-section (5) provides that, in the case of wages paid or payable
to a corporate employee, the jurisdiction in which the employee is
based is to be determined pursuant to the new section 11B. This
ensures that, when an employee is a corporate employee as
opposed to a natural person, the principles in new section 11B are
used to determine the jurisdiction in which the corporate employee
is based.
Sub-section (6) defines a "corporate employee" to mean a
company that is an employee under section 34 or 39, or a company
to whom a payment is made that is taken to be wages under section
42 or 47.
New section 11B sets out the principles to be applied to determine
in which jurisdiction an employer is based. They are relevant to the
application of the nexus in new section 11(1)(b)(ii).
Sub-section (1) provides that the jurisdiction in which an employer is
based is where the employer's registered business address is
located or, if the employer does not have an ABN, the jurisdiction in
which the employer's principal place of business is located.
Sub-section (2) provides that, if an employer carries on a business
under a trust, the employer's registered business address is the
trust's registered business address or, if the trust does not have an
ABN, the trustee's registered business address.
Sub-section (3) ensures that, if an employer has registered business
addresses in different jurisdictions at the same point in time, the
jurisdiction in which the employer is based at that point is where the
employer's principal place of business is located.
Sub-section (4) provides that, to determine the jurisdiction in which
an employer is based, regard must be had only to the state of affairs
existing during the month in which the relevant wages are paid or
payable.
Sub-section (5) clarifies that, if more than one jurisdiction would
qualify as the jurisdiction in which an employer is based during a
month, the question must be determined by having regard to the
state of affairs existing on the last day of that month.
Sub-section (6) provides that, if an employer has neither a
registered business address nor a principal place of business, the
employer is taken not to be based in an Australian jurisdiction.
New section 11C sets out the principles to be applied to determine
the place and date of payment of wages. They are relevant to the
application of the nexus in new section 11(1)(b)(iii) and 11(1)(c).
Sub-sections (1) and (2) provide a method for determining the place
and date, respectively, that wages are taken to have been paid,
where the payment is made by way of an instrument or transfer or
crediting in accordance with an instruction.
Sub-section (3) provides that wages are taken to be payable at the
place at which they are paid, subject to new section 11.
Sub-section (4) provides a method for determining the place that
wages are taken to be paid, when wages become payable but are
not paid by the end of the month. The wages are taken to be
payable at the place where wages were last paid or, if no wages
have been previously paid, the place where the employee last
performed services in respect of the employer.
Sub-section (5) ensures that, if wages are paid or payable by the
same employer in respect of the same employee in more than one
Australian jurisdiction during one month, the Australian jurisdiction in
which the highest proportion of the wages are paid or payable is
considered to be the jurisdiction in which those wages are paid or
payable.
Clause 12 Inserts a new sub-section (3) to section 13 to clarify that the nexus
provisions apply to wages referred to in section 13(1)(a)(e) the
same way as it applies to wages paid or payable to an employee, as
if a reference to an employee in this Act included a reference to any
such person.
Clause 13 Omits section 24(4) which, is a deeming provision in relation to
wages constituted by the grant of shares or options to a director
where no services are performed.
Clause 14 Omits section 25 which, deems when services are considered to
have been performed in relation to wages constituted by the grant of
shares and options for the same reasons above.
Clause 15 Inserts new Division 9 in Part 4 to exempt wages paid or payable in
relation to services performed wholly in one or more other countries
for a continuous period of more than 6 months. This is not a new
exemption as such wages are excluded from taxable wages under
section 10(1)(a)(ii) of the Payroll Tax Act 2008.
Clause 16 Inserts new clause in Schedule 3 to set out transitional provisions
associated with the enactment of the amendments.
Sub-clause (1) provides that the amendments will be taken to have
come into operation on 1 July 2009.
Sub-clause (2) clarifies that the amendments are to be applied for
the purpose of determining the correct amount of payroll tax (within
the meaning of section 82) payable by an employer for the financial
year commencing on 1 July 2009.
Sub-clause (3) provides that section 9 continues to apply in respect
of expired months as if the amendments had not been made. The
effect of sub-clauses (2) and (3) is that employers are not required
to adjust payroll tax in respect of expired months until the annual
adjustment stage.
Sub-clause (4) defines the meaning of an expired month.