The Victorian Civil and Administrative Tribunal has set aside the Commissioner’s decision to group a bank (Bank of Queensland) with its franchised branches for payroll tax purposes.

The Tribunal heard the Bank of Queensland conducted its banking business through 2 species of branch, this included the “corporate” branch and, as at 2008, around 24 “owner managed branches” (or OMBs) in Victoria.  In a letter dated 13 February 2009, which has been treated as a private ruling, an officer of the Commissioner determined that the Bank and its Victorian OMBs constituted a group under s 9A(1A)(b), (c) and/or (d) of the Payroll Tax Act 1971 (Vic) and s 71 of the Payroll Tax Act 2007 (Vic) ie the inter-use of employees provisions.

It was also determined that the Commissioner’s discretion under s 9A(1J) of the 1971 Act and s 79(2) of the 2007 Act should not be exercised to exclude the Bank from its OMBs on the basis that the businesses of the Bank and OMBs are not independent and are connected. The taxpayer objected to the determinations.

In deciding that the decision to group should be set aside, the Tribunal concluded that the business conducted by the OMBs was the business of the OMBs’, separate from the business of the Bank. Among other things, the Tribunal noted the relationship between the Bank and the OMBs fell within the common law concept of agency.

(Bank of Queensland Ltd v Comr of State Revenue (Review and Regulation) [2013] VCAT 1966, Victorian Civil and Administrative Tribunal, Macnamara VP, 22 November 2013.)

[LTN 236, 5/12/13]

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