Commissioner Offers Payroll Tax Penalty Amnesty

19 November 2008 Topics: Workplace relations and safety

The Commissioner for State Revenue has approved a penalty amnesty for employers who have not included payments to contractors in their taxable wages under the Payroll Tax Act 1971 (Qld).

The amnesty applies to payments made to contractors between 1 July 2005 to 30 June 2008.

Queensland employers are now required to include certain contractor payments under relevant contracts in taxable wages.

A relevant contract is a contract under which a business:

  • supplies to another person services in relation to the performance of work; or
  • has supplied to the designated person the services of persons in relation to the performance of work; or
  • gives goods to individuals for work to be performed by those individuals in respect of the goods and for the goods to be re-supplied (section 13B(1) of the Payroll Tax Act 1971 (Qld)).

However, there are some exclusions. For example:

  1. the labour is ancillary to the supply or use of the goods by the contractor;
  2. the services supplied are not ordinarily required by the principal and are rendered to the general public;
  3. the principal ordinarily requires the services for less than 180 days in a financial year;
  4. the services are provided for 90 days or less in the financial year;
  5. the contractor provides the services to the public generally within that financial year (as determined by the Commissioner);
  6. the contractor engages other persons to fulfil the contract.

If before 31 March 2009 an employer discloses to the Commissioner payments to a contractor omitted from taxable wages:

  • penalty tax will not be imposed on the shortfall;
  • unpaid tax interest on the shortfall will be halved; and
  • any ensuing audit will be limited to the three previous financial years.

After 31 March 2009, the Office of State Revenue will conduct an audit program in relation to contractor payments for the previous five financial years for those employers who have not made voluntary disclosure.

If you would like more information on the amnesty, you can contact a member of our team on (07) 3231 2444.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.