In a decision handed down on Mon 8.2.2014, the NSW Civil and Administrative Tribunal affirmed a payroll tax assessment issued to the taxpayer for the 2009 financial year, but set aside the assessments issued for the 2008, 2010, 2011 and 2012 financial years.
The taxpayer carried on a business of designing and branding dental surgeries and healthcare centres. It engaged architectural consultants to provide services under contracts. The Tribunal heard details of certain agreements between the taxpayer and an architect, Mr W, to provide architectural services. Mr W also provided architectural services to other entities throughout the relevant period. The Commissioner assessed the taxpayer to payroll tax on the amounts paid to Mr W, less a 5% allowance for “non-labour component”.
The Tribunal was of the view that the arrangement between the taxpayer and Mr W qualified as a “relevant contract” under s 32(1)(b) of the Payroll Tax Act 2007 (NSW).
However, it held that exception under s 32(2)(b)(iv) to the definition “relevant contract” applied. To qualify for the exception, the Tribunal said the taxpayer must prove that for each financial year, Mr W ordinarily performs services to the public generally in that financial year of the kind supplied to the taxpayer. The Tribunal was satisfied that requirements for the exception were satisfied for the 2008, 2010, 2011 and 2012 years (but not the 2009 year).
(Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Comr of State Revenue [2014] NSWCATAD 215, NSW Civil and Administrative Tribunal, Sorensen SM, 8 December 2014.)
[LTN 237, 8/12/14]