Back in 2008 most of the Australian States and Territories got together and harmonised their payroll tax legislation. But they also toughened up the legislation particularly the grouping provisions.
Some people have described the payroll tax grouping provisions as an overkill. And I think because the grouping provisions are so highly technical the legislature included section 74 of the Payroll Tax Act 1971 (Qld) where a business can apply for exclusion from a group. This is called a Degrouping Application.
Section 74 gives the Commissioner discretion to exclude businesses from a group if the Commissioner is satisfied a business is carried on independently of, and is not connected with another business.
In making the determination the Commissioner must have regard to:
- the nature and degree of ownership and control of the businesses; and
- the nature of the businesses; and
- any other matters the Commissioner considers relevant.
Any business that wishes to apply to be excluded from a group makes a Degrouping Application where information about a number of topics is sought such as whether there are any:
- Common Employees
- Common Suppliers
- Common Customers
- Sharing of Resources such as premises, administrative functions, financial advisors, lawyers and accountants
- Joint Advertising and Marketing
The Commissioner will also want to know whether there are any commercial arrangements between the companies or any inter-company loans.
The Commissioner will also ask for the purpose of making a determination under section 74 details of the management of the businesses.
At Tobin Partners we have experience in making degrouping applications under Section 74 of the Payroll Tax Act. Because of that experience we can save you a lot of time and we can give you our advice on whether you are likely to succeed in a degrouping application before you expend a lot of your time and energy in making the degrouping application or worse, outlaying money with lawyers who are not familiar with making applications for degrouping under the Payroll Tax Act.
