The NSW Administrative Decisions Tribunal has affirmed the Commissioner’s decision to group a taxpayer with another company for payroll tax purposes for the 2008 and 2009 years under s 71(3) of the Payroll Tax Act 2007 (NSW).
Both companies operated road freight transport businesses. The taxpayer’s directors were R and D (mother and son) with R as the sole shareholder. The other company’s sole director and shareholder was D. The Tribunal heard details of an arrangement whereby the taxpayer would subcontract to the other company should it require further trucks. Other things noted included shared business premises and an unsecured loan from the taxpayer to the other company.
The Tribunal affirmed the Commissioner’s decision to group the companies. It found they were managed by D and that the relationship between the companies was “extremely close” based on the financial arrangement between them and the manner in which the taxpayer dealt with freight contracts. In this regard, the Tribunal noted that during the relevant years, the other company derived all its income from the taxpayer and received “substantial financial support”. In addition, the Tribunal held there was no basis to degroup the companies.
(Nowlan Enterprises Pty Ltd v Chief Comr of State Revenue [2013] NSWADT 21, NSW Administrative Decisions Tribunal, Block JM, 30 January 2013.)
[LTN 20, 31/1/13]