The Commissioner of ACT Revenue has been successful before the Appeals Tribunal of the ACT Civil and Administrative Tribunal in setting aside a previous decision to reduce penalty tax imposed on a taxpayer for a payroll tax default.
At first instance, the ACT Civil and Administrative Tribunal was satisfied that, due to the ill health of the taxpayer’s sole director, there were circumstances beyond the taxpayer’s control which warranted the discretion under s 31(6)(b) of the Taxation Administration Act 1999 (ACT) so that no penalty tax was payable for 2007-08 to 2010-11 financial years.
However, the Tribunal affirmed the penalty tax for the 2011-12 and 2012-13 financial years as, following the retention of new accountants in 2011, it was of the view there were opportunities to comply with the payroll tax law. The sole director’s health had also improved in 2011.
The Appeal Tribunal was satisfied that the tax default did not happen solely because of circumstances beyond the control of the taxpayer and its sole director. The Appeal Tribunal identified other causes for the taxpayer’s failure to pay tax. It also said a “failure to understand the legislation or to obtain advice about it does not put that ignorance beyond the control of the [taxpayer] or its director”. Accordingly, it held the relief under s 31(6)(b) did not apply.
(Comr for ACT Revenue v G Kalsbeek Pty Ltd [2015] ACAT 90, ACT Civil and Administrative Tribunal, Appeals Tribunal, Stefaniak AP, Chenoweth SM, 23 December 2015.)
[LTN 3, 7/1/16]