A taxpayer has been broadly unsuccessful before the NSW Civil and Administrative Tribunal in seeking to have, among other things, 2 companies de-grouped from a company group for payroll tax purposes.
The Commissioner had issued payroll tax assessments to the taxpayer for the payroll tax years ending 30 June 2007 to 30 June 2011 (inclusive). The assessments were issued on the basis that the taxpayer formed a payroll tax group with 8 other entities during the relevant period. Before the Tribunal, the Commissioner understood that the grouping of 6 of the entities (including the taxpayer), which provided debt collection and associated services had been resolved, leaving certain matters to be determined. This included whether 2 of the other entities (which carried on project venture/management services, and motor racing business activities, respectively) should be “de-grouped” from the group.
The Tribunal broadly affirmed the Commissioner’s decisions, but agreed with the Commissioner that the assessments should be remitted for amendment. The Tribunal held the determination to de-group the other 2 entities under the relevant payroll tax legislation could not be made (except for one of the entities for the 2011 year). It said that while the business activities of the 2 entities were different from the other members of the group, it found there was “demonstrable connectedness and dependence”. The Tribunal also determined that certain amounts paid by some of the entities were not wages for payroll tax purposes. It also held that penalty tax at 25% and interest on unpaid tax had been correctly imposed.
(Boston Sales and Marketing Pty Ltd v Chief Comr of State Revenue [2014] NSWCATAD 139, NSW Civil and Administrative Tribunal, Block SM, 15 September 2014.)
[LTN 179, 16/9/14]