On Thursday 26.5.2016, the NSW Civil and Administrative Tribunal affirmed the Commissioner’s decision not to de-group the taxpayer under s79 of the Payroll Tax Act 2007 (NSW).

The taxpayer accepted it was properly grouped with 2 other entities for the period from 19 December 2011 to 31 August 2014. However, the taxpayer argued that it carried on different and independent businesses to that of one of the other entities and the discretion to degroup should be exercised. Among other things, the taxpayer argued it provided specialist and emergency veterinarian services and was largely managed by Dr A, while the other entity provided a general veterinarian services and was managed by Dr B and Dr C.

The Tribunal was not satisfied that the taxpayer had discharged the onus of establishing its case and was of the view that there was a lack of evidence to substantiate its arguments. The Tribunal also noted a number of factors which it said lead to the conclusion that the taxpayer’s business, during the relevant period, was “closely associated with and complimentary to” the other entity’s business which was carried on next door to it.  Accordingly, it concluded the taxpayer’s business was not independent of the other entity’s business and the businesses were not completely different.

(Eastside Veterinary Emergency & Specialists Pty Ltd v Chief Comr of State Revenue [2016] NSWCATAD 104, NSW Civil and Administrative Tribunal, Verick SM, 26 May 2016.)