eRevenue Queensland issue 17, July 2009

• the abolition of the Queensland Fuel Subsidy Scheme from 1 July 2009
• an increase in the transfer duty first home vacant land concession from 1 July 2009
  • the concession will increase from $150,000 to $250,000
  • the value at which the concession phases out will increase from $300,000 to $400,000
• a new rebate will be introduced for employers who employ apprentices and trainees whose wages are exempt from payroll tax—for the 2009–10 financial year, employers can claim a rebate on these wages, which will reduce payroll tax payable on the wages of other employees
• an increased payment period for land tax assessments (from 30 days to 90 days) for the 2009–10 financial year
• the introduction of instalment payment options for land tax liabilities from 2010–11 financial year.

Key priorities of the 2009-10 Budget are delivering jobs for Queensland, strengthening community services and returning the Budget to surplus.

See the State Budget 2009–10 website for more information.

• removes the restriction on landlords passing on land tax directly to tenants for new leases other than residential and retail shop leases
• applies the Taxation Administration Act 2001 (TAA) to land tax administration
• makes changes supporting Release 3 of our Revenue Management System (RMS).

RMS will be used to administer our major revenue streams, replacing the multiple systems we currently use. RMS is already being used for duties and payroll tax, and will soon be used to administer land tax and Community Ambulance Cover as well. 

Amendments to the laws will change the way that self assessors lodge and pay transfer duty. Instead of a returns based system (lodging periodic returns containing multiple transactions), self assessors will now lodge each transaction separately. One transaction will equal one lodgement.   

These laws will also allow us to require a person to pay an amount or lodge a document by electronic means. In certain cases, the person may apply for this requirement to be withdrawn and appeal if we decide to refuse to withdraw the requirement.

On Budget day, 16 June 2009, the Treasurer introduced the Fuel Subsidy Repeal and Revenue and Other Legislation Bill 2009 into Parliament. This Bill:

• abolishes the Queensland Fuel Subsidy Scheme from 1 July 2009
• increases the transfer duty first home vacant land concession to $250,000 and increases the value at which the concession phases out to $400,000, effective from 1 July 2009
• defers commencement of the $1 million cap on the value of a home for which the First Home Owner grant may be paid from 1 July 2009 to 1 January 2010
• amends the law to extend the Commonwealth’s First Home Owner Boost to 31 December 2009.

The Bill also introduces a payroll tax rebate on apprentice and trainee wages for the 2009–10 financial year. Wages paid to apprentices and trainees are already exempt from payroll tax. An employer who employs apprentices or trainees whose wages are exempt from payroll tax will now also be able to claim a 25% rebate of payroll tax in relation to those wages. The rebate will reduce payroll tax payable on the wages of their other employees. The rebate will apply for the 2009–10 year. 

Finally, the Bill allows us to impose a 0.5 per cent surcharge on that part of the aggregate value of a taxpayer’s land (for land tax purposes) which is greater than $5 million from 1 July 2009. This was announced in the Mid Year Fiscal and Economic Review in December 2008.

Both of the above Bills were passed and assented to before 30 June 2009 so that these changes could start on 1 July 2009.

Manual transaction numbers—reminder

If you endorsed any transactions between 29 June and 3 July using manual transaction numbers, please enter these transactions into OSRconnect.

Make sure you update the spreadsheet with the OSRconnect transaction number, and email it back to dutiesclientsupport@osr.treasury.qld.gov.au.

Insurance duty returns

Your June return is due on 21 July 2009. See Lodging an insurance duty return for more information about how to lodge your return in OSRconnect.

System improvements

We are continually working to improve our new system. Our current focus is on the following areas:

• the ability to print the Form 12.6 using the print button. To print the form now, you can select Ctrl+P or right click and select print from the menu.
• the ability to reprint the confirmation page
• displaying your client reference in the 'Task Overview' screen and on the confirmation page
• the ability to delete transactions saved in draft but not yet submitted.

1. Make sure your system is compatible with OSRconnect

To access OSRconnect, you need Adobe Reader (version 9) and either Internet Explorer 7 (IE7) or Firefox 2.0. If you have been using a previous version of Adobe, you should uninstall that version before downloading version 9.

If you do not have the above system requirements, we cannot support you if you have difficulties when using OSRconnect.

2. Use secure passwords

When creating a password, you must use at least 8 characters (with a maximum of 14). Use a combination of letters and numbers to keep your password secure. This password is case sensitive.

3. Check the form before submitting

Before lodging your transaction statement in OSRconnect, click on the 'Check Form Data' tab to make sure that all your information is entered correctly. This will also calculate the duty and validate your form.

4. Make a note of your transaction number

When you save a transaction in draft form, the transaction number will appear in the top left hand corner of the screen. Record this number so that you can find it easily when looking in the 'Task Overview' screen. Once you submit your transaction, the transaction number will display on the confirmation page.

5. Train yourself using our eLearning demonstrations

Our online training demonstrations will help you and your staff to use our new system and lodge transactions and returns electronically through OSRconnect. You can view the following training modules on our website. Other demonstrations are also available. 

General

Getting started with OSRconnect
Logging on and off OSRconnect
Create a new user
Updating client details
View payment history
Making a payment

Duties

Lodging an insurance duty return
Saving and re-opening an assessment
Residential land—transfer duty transaction
Non-residential land—transfer duty transaction
New right—transfer duty transaction
Business assets—transfer duty transaction
Apply exemption—transfer duty transaction
Section 30 aggregation—transfer duty transaction

If you have any questions or feedback regarding our new online demonstrations, please email dutiessupport@osr.treasury.qld.gov.au.

We will continue to improve these demonstrations based on your feedback, so please check these lessons for any updates.

From 1 July 2009, the Land Tax Act 1915 will be greatly reduced as the administrative provisions are moved under the Taxation Administration Act 2001 (TAA). This will mean you will need to refer to the TAA for the general administrative provisions that apply to land tax (e.g. unpaid assessments issued after 1 July 2009 will now be charged unpaid tax interest under the TAA at 11.14% per year).

Other changes to land tax from 1 July 2009 include:

• an extension to the principal place of residence concession for those going into care
• a new surcharge on taxpayers with a total taxable land value of more than $5 million
• changes to the restriction on landowners passing land tax on to tenants.

For 2009–10, taxpayers will have 90 days to pay their assessment before unpaid tax interest starts to accrue. This will help them to plan for their annual payment.

Later on, electronic business will be introduced, allowing online access to assessment details and electronic lodgement of exemption claims. Also, in 2010, we will offer the option to pay by instalments. News on these initiatives will be published in future editions of e-Revenue Queensland.

See 2009–10 Land tax changes for more information.

1. Removal of June periodic return

To harmonise with other jurisdictions, you no longer have to lodge a separate return for the June period. The wages that you would normally include in your June periodic return must now be reported in your annual return. Your annual return is due to be lodged and paid for by 21 July.

If you lodge your payroll tax returns quarterly or half yearly, your April–June or January–June wage totals should be included in your annual return. Any liability for your annual return should be lodged in OSRconnect, our new revenue management system.

2. Using employment agents

If you source some workers (employees) from an employment agent or labour hire firm, then the employment agent must pay the payroll tax for the worker. A typical employment agent arrangement is shown below.

3. Paying payroll tax on directors’ fees

When calculating your taxable wages, always remember to include any payments made as directors’ fees. You can remove any GST component of the payment, as this part is not taxable.

Payments made to non-working directors for expenses incurred are not taxable. For example, a payment to a non-working director for travel expenses to attend an annual board meeting is not taxable.

Directors’ fees paid to partners of professional partnerships must be included as taxable wages for payroll tax purposes.

Wages include any amount paid or payable by a company to a director or member of the governing body of that company by way of remuneration.  Directors' fees must be included as wages by the client company or public company, even if the:

• partnership (of which the director is a partner) has a partnership agreement that requires any fees received by partners as directors of client companies or public companies to be paid to the partnership
• directors’ fees are paid to the partnership of which the director is a partner, rather than to the director/partner.

4. Relevant contracts—180- and 90-day exemptions

Any payments you make to contractors working after 1 July 2008 under a ‘relevant contract’ are taxable.

While most contracts for the provision of services come within the meaning of ‘relevant contract’ under s.13B of the Pay-roll Tax Act 1971, certain types of contracts are specifically excluded from the definition of ‘relevant contract’.

One exclusion is a contract for services of a kind ordinarily required by the designated person (the principal) for less than 180 days in a financial year.

If your business normally requires a type of service for less than 180 days in a financial year, the contracts are exempt. It is the type of service required by the business that is relevant, so it does not matter:

• whether a contractor or employee provides these services
• how many people provide these services at a time
• whether your business requires these services on consecutive days.

This exemption in no way extends the 90-day exemption.

For example, a building company engages the services of a contract landscape gardener (Landscaper A) to perform landscaping services for 100 days in a financial year. A second contract landscape gardener (Landscaper B) is engaged to perform the same services concurrently for 95 days. No other landscaping work is required by this building company for the rest of the financial year.

As the building company only requires landscaping services for 100 days in the financial year, s.13B(2)(b)(ii) of the Payroll Tax Act is satisfied. Accordingly, both contracts with Landscaper A and Landscaper B are not ‘relevant contracts’ and payments made under both contracts are not subject to payroll tax.

On the other hand, if Landscaper B performed the 95 days of service after Landscaper A has completed his 100 days of service, the exemption in s.13B(2)(b)(ii) of the Pay-roll Tax Act does not apply because the total number of days that the building company requires landscaping services is 195 (100 days + 95 days). As a result, contracts entered into with Landscaper A and Landscaper B are ‘relevant contracts’ under s.13B of the Pay-roll Tax Act and payments made under these contracts are subject to payroll tax, unless one of the other exemptions under the contractor provisions applies.

Another exclusion is a contract for the provision of services by a person providing the same or similar services to a principal under the contract for no more than 90 days in a financial year.

Contracts are exempt if a person provides you with the same or similar services for a total of not more than 90 days in a financial year. It is important to note that this exemption applies to the individual who is providing the service. On the 91st day, the entire period becomes liable for payroll tax.

5. What’s taxable?

All amounts you pay your employees in return for their services are liable for payroll tax. In general, payments are liable for payroll tax if they are:

• a reward for services rendered by an employee and/or director
• payments to which the recipient has an enforceable right
• taxable termination payments.

This includes cash salary which an employee elects to forego in return for other benefits.

See our Checklist of taxable wages for more information.