Tasmanian Payroll Tax Harmonisation Summary of changes Guideline 2008 by skatzz

VIEWS: 4 PAGES: 5

									Tasmanian Payroll Tax Harmonisation
Summary of changes

Guideline                             2008



The Tasmanian Payroll Tax Act 2008 received royal assent on 26 June 2008 and commenced on
1 July 2008.

The commencement of the Tasmanian Act means that Tasmania’s payroll tax legislation is now
harmonised with that of Victoria and New South Wales. Queensland has also amended its payroll tax
legislation to achieve similar harmonisation.

This guideline outlines the changes to payroll tax arrangements in Tasmania that apply from 1 July 2008.


The major changes:
   •   Grouping, contractor, employment agent and employee share acquisition scheme provisions have
       been aligned with Victoria and New South Wales.


   •   ATO rates have been adopted for accommodation and motor vehicle allowances.


   •   Employer contributions to portable long service and redundancy schemes and trust distributions
       made in place of wage payments are no longer liable for payroll tax.


   •   There are new exemptions for adoption leave, maternity leave, wages paid to volunteers involved
       in fire-fighting or emergency operations and wages paid under Community Development
       Employment Projects.


   •   The current payroll tax exemption for religious organisations and public benevolent institutions
       (PBIs) has been expanded to include non-profit organisations which meet certain conditions.


Rates and thresholds:
Individual states have retained their own rates and thresholds; Tasmania has not adopted Victoria’s or
New South Wales’ rates and thresholds.




                                                Page 1 of 5
Summary of changes


Table of harmonised payroll tax items:

                                                                                   Change for
                                                                                 employers paying
     NSW-VIC – List of harmonised payroll tax items
                                                                                    wages in
                                                                                   Tasmania?
     1    Exemption for non-profit organisations

     2    Fringe benefits

     3    Grouping

     4    Motor vehicle and accommodation allowances

     5    Wages for work performed overseas

     6    Adoption/maternity leave

                                                                                   No substantial
     7    Contractors
                                                                                     changes

     8    Group Apprenticeship and Traineeship Schemes

     9    Employment Agents

     10   Portable long service leave and redundancy schemes

     11   Trust Distributions

     12   Lodgement of monthly and annual returns (Annual Reconciliation)           No change

     13   Anti-avoidance provisions

     14   Community Development Employment Scheme

     15   Employee Share Acquisition Schemes

     16   Employees involved in volunteer fire fighting or volunteer emergency
          relief activities

     17   Non-monetary superannuation contributions

     18   Refunds and assessments                                                   No change

     19   Termination payments to non-employee directors and deemed
          employees

     20   Calculation of monthly threshold amount




                                                    2 of 5
Summary of changes


Details of harmonised payroll tax items:
  1. Exemption for non-profit organisations
  Wages paid by a non-profit organisation having a sole or dominant charitable, benevolent,
  philanthropic or patriotic purpose to employees engaged exclusively in the work ordinarily performed in
  connection with those charitable, benevolent, philanthropic or patriotic purposes are exempt from
  payroll tax.

  2. Fringe benefits
  The taxable value of fringe benefits is determined by grossing-up the fringe benefits using the lower
  (type 2) gross-up rate.

  3. Grouping
  Tracing provisions have been introduced to group corporate employers where an entity has a direct,
  indirect or aggregate interest in a corporation that exceeds 50 per cent.

  The requirement under the former Pay-roll Tax Act 1971 that employers have a separate ANZSIC
  Division Code when applying to be excluded from a group no longer applies.

  The definition of a business has been extended to include the carrying on of a trust and the activity of
  holding any money or property used in connection with another business.

  4. Motor vehicle and accommodation allowances
  The exempt rate for motor vehicle allowances will be either the rate per business kilometre travelled
  using the ATO’s large car ‘cents per kilometre’ method released by the ATO each year or a rate
  specified in the regulations.

  The latest available ATO large car ‘cents per kilometre’ rate is 70 cents per kilometre.

  The exempt rate of an accommodation allowance will be the daily travel allowance calculated at the
  ATO’s daily travel allowance based on the lowest capital city for the lowest salary band. The latest
  available ATO daily travel allowance rate is $201.25 per night.

  5. Wages for work performed overseas
  All wages paid to an employee who works wholly in another country for a continuous period of 6
  months or more are exempt.

  6. Adoption/maternity leave
  Wages paid to employees on maternity leave or adoption leave are exempt from payroll tax. The
  exemption is limited to wages paid or payable in respect of a maximum of 14 weeks maternity leave in
  respect of any one pregnancy and 14 weeks adoption leave in respect of any one adoption.

  This exemption does not apply to paid sick leave, annual leave, recreation leave, long service or
  similar leave taken while the employee is absent.

  7. Contractors
  No substantial changes have been made to the way that the contractor provisions are applied in
  Tasmania.




                                                  3 of 5
Summary of changes


  8. Group Apprenticeship and Traineeship Schemes
  Wages paid to persons employed by a non-profit organisation that are administering or participating in
  a group apprenticeship or group training scheme will be exempt from payroll tax.

  9. Employment Agents
  Wages paid by an employment agency to an employee or service provider who performs work for a
  payroll tax exempt client are exempt from payroll tax.

  10. Portable long service leave and redundancy schemes
  Contributions made by employers to portable long service leave and redundancy schemes on behalf
  of employees are no longer liable to payroll tax.

  11. Trust Distributions
  Trust distributions paid in lieu of wages are no longer liable for payroll tax.

  12. Lodgement of monthly and annual returns (Annual Reconciliation)
  No changes are to be made; that is, your monthly return must be lodged within 7 days of the end of
  each month and the Annual Reconciliation Return must be lodged by 21 July each year.

  13. Anti-avoidance provisions
  Anti-avoidance provisions have also been introduced in addition to the general anti-avoidance
  provisions contained in the Taxation Administration Act 1997 (the TAA).

  Under these anti-avoidance provisions, wages paid by or to third parties may be included for payroll
  tax purposes. Additionally, employment agency contracts and agreements designed to reduce payroll
  liability may be disregarded.

  14. Community Development Employment Scheme
  Wages paid to an aboriginal person employed under a Community Development Employment Project
  funded by the Commonwealth Government are exempt from payroll tax.

  15. Employee Share Acquisition Schemes
  The value of an employer’s contribution to the grant of shares or options under an employee share
  acquisition scheme is now liable for payroll tax.

  Employer contributions in relation to any grant of a share or option to an employee, a director, former
  director, member of the governing body of the company or a former member of the governing body or
  deemed employee will be liable for payroll tax under these provisions .

  A share or option will become liable on the relevant day, which is the date on which that share or
  option is granted to the employee or the date it vests to them. The value of the share or option will be
  the market rate on the relevant day, as determined in accordance with the Commonwealth income tax
  provisions.

  The granting of a share or option, which is classified as a fringe benefit under the Fringe Benefits Tax
  Assessment Act 1986 (Cwlth) will be treated as wages for payroll tax rather than as a fringe benefit.




                                                    4 of 5
Summary of changes


    16. Employees involved in volunteer fire fighting or volunteer emergency relief
        activities
    Wages paid to volunteer members of a fire brigade under the Fire Services Act 1979 while taking part
    in bushfire fighting activities or to an employee engaged in emergency operations or rescue and
    retrieval operations as a volunteer member of an emergency services organisation are exempt from
    payroll tax.

    17. Non-monetary superannuation contributions
    The value of non-monetary contributions to a superannuation fund on behalf of an employee, a
    contractor deemed to be an employee or a director have been included as taxable wages.

    18. Refunds and assessments
    The current refund or assessment provisions have not changed. That is, a request for a refund may
    be made within three years of the date that the payment of tax was made in accordance with the
    provisions of the TAA.

    19. Termination payments to directors and deemed employees
    Termination payments made to retiring directors or contractors deemed to be employees under the
    relevant contractor provisions have been included for payroll tax purposes.

    20. Calculation of monthly threshold amount
     Whilst there is no change to the calculation of the annual payroll tax payable or the annual threshold
     amount, which remains at $1 010 000 per annum, there is a change to the method of calculation of
     the monthly threshold amount. The monthly threshold amount will now vary each month depending
     on the number of days in the month. The formula to calculate the monthly threshold amount is:


               No. of days in month
                                                         X         $1 010 000
                No. of days in year


     Once determined, the monthly threshold amount is to be used for the calculation of the payroll tax
     payable for that month.




Enquiries:                                 By Correspondence:
Telephone:   (03) 6233 2813                The Commissioner of State Revenue, State Revenue Office
Facsimile:   (03) 6234 3357                GPO Box 1374, HOBART Tas 7001
E-mail:      taxhelp@treasury.tas.gov.au
Internet:    www.sro.tas.gov.au            In Person: 4th Floor, 80 Elizabeth Street, Hobart

                                           PRT_0164 02 Jul 2008

                                                          5 of 5

								
To top