From 1 July 2007 changes to the pay-roll tax legislation for New South Wales and Victoria will apply. These changes have been designed to harmonise pay-roll tax legislation for NSW and Victoria and align their respective pay-roll tax legislation in the following areas;
BOTH NEW SOUTH WALES AND VICTORIA
Exemption for Charities - Wages paid or payable by a non-profit organisation with wholly charitable, benevolent, philanthropic or patriotic objects will be exempt.
Fringe Benefits - The taxable value of fringe benefits will be determined by grossing up the fringe benefit by using the lower (type 2) gross up rate.
Grouping - A Designated Group Employer (DGE) will claim the appropriate tax free threshold and all other group members not be able to claim a deduction. In addition there are also changes in determining whether employers are grouped.
Motor Vehicle and Accommodation Allowances - Changes to exempt rates for Motor Vehicle and Overnight Accommodation Allowances and for NSW the removal of award rates when calculating the exempt rate.
Wages for Work Performed Overseas - Changes to liability for wages paid for services in another country.
NEW SOUTH WALES
Adoption and Maternity Leave - Introduction of an exemption for adoption leave and maternity leave payments.
Contractors - Removal of the exemption for payments under a relevant contract exceeding $800,000 , and the application of the exemption for contractors rendering services to the public generally to services provided ‘on a financial year basis.
Designated Group Employer - Requirement for grouped employers to appoint a DGE to claim the benefit of the tax free threshold (deduction).
Employment Agents - Removal of the exemption provided to employment agents that on-hired staff to clients with wages below the $600,000 tax free threshold.
Financial Planners - Removal of exemption for wages paid to financial planners under the relevant contract provisions.
Portable Long Service Leave and Redundancy Schemes - Contributions to a portable long service leave scheme and a redundancy or severance scheme will no longer be liable.
Trust Distributions - Trust distributions will no longer be liable.
VICTORIA
Annual Adjustment Reconciliations - Extension of the due date for the Annual Adjustment (Annual Reconciliation) from 7 July to 21 July.
Anti-avoidance Provisions - Introduction of general anti avoidance provisions.
Community Development Employment Scheme - Introduction of an exemption for wages paid under a Community Development Employment Scheme.
Employee Share Acquisition Scheme - Employee share acquisition schemes now liable to payroll tax.
Employees in Voluntary Work/Emergency Relief - Exemption for wages paid to employees participating in voluntary work for bush fires or emergency relief.
Non-Monetary Superannuation Contributions - These are now liable for pay-roll tax.
Refunds and Assessments - Extension of period for refunds and reassessments.
Termination Payments to Non-Employee Directors and Deemed Employees - Liability for payroll tax on termination payments extended to non-employee directors and deemed employees.
Tracing Provisions - Introduction of tracing provisions of interests in corporations.
For further details on these changes, please refer to the Office of State Revenue Fact sheet at www.osr.nsw.gov.au/
If you are not sure if these changes will apply to you please contact your Client Relationship Manager directly.
