The NSW Administrative Decisions Tribunal has refused a taxpayer’s application to be excluded from a payroll tax group under s 79 of the Payroll Tax Act 2007 (NSW).
In June 2011, the Commissioner issued payroll tax assessments to the taxpayer for the 2008 to 2010 tax years following his decision to group the taxpayer with 4 other companies. The taxpayer conceded that the grouping provisions applied, but contended that the Commissioner should exercise his discretion under s 79 to exclude it from the group.
The Tribunal heard details about the establishment of each company, their business activities, locations, holding/operating company structure, and various shareholdings and directorships. The companies are owned and controlled by a family (4 siblings and their mother) with varying roles and responsibilities for each family member. The taxpayer company was solely managed by one of the siblings. The Tribunal held the taxpayer did not operate independently of 2 of the other group companies, and therefore did not meet the requirements of the discretion sought. Of importance, the Tribunal noted financial support, being an outstanding loan of $9.6m, provided to the taxpayer from one of the group companies. Another key consideration noted by the Tribunal included the role of one of the group companies in providing treasury, banking and administrative services to all the group companies, including the taxpayer.
(Lombard Farms Pty Ltd v Chief Comr of State Revenue [2013] NSWADT 17, NSW Administrative Decisions Tribunal, Verick JM, 24 January 2013.)
[LTN 18, 29/1/13]