Changes to the grouping provisions
If you are currently part of a group for pay-roll tax purposes, you need to consider the changes being implemented.
Head & Branch Businesses – This category will be discontinued. If you are grouped under this category, a letter will be sent to you from the Office of State Revenue informing you how to be "ungrouped".
Business grouped because of the common use of employees – if you are grouped under this category please read the information sheet.
Businesses grouped because of commonly controlled businesses. The requirement for control now requires there to be more than 50% control. If you are grouped under this category, you may need to apply to be “ungrouped”. Also, be aware that tracing now exists.
Tracing establishes control in a 'chain' of corporations. A relevant entity will control a corporation if it controls more than 50% of the voting shares held either directly, indirectly or through an aggregation of interests.
The harmonisation measures have introduced significant changes to grouping including:
- All current grouping categories will continue except for head and branch businesses, which will be discontinued, and a new category of grouping will be adopted - tracing of interests in corporations.
This means that the categories of grouping that will be effective as of 1 July 2008 are:
- Related corporations under the Corporations Act 2001;
- Groups arising from the use of common employees;
- Groups of commonly controlled businesses;
- Groups arising from tracing of interests in corporations; and
- Smaller groups subsumed into larger groups.
- For commonly controlled businesses, the common control test threshold will now be more than 50%, replacing the 50% or more test;
- Introduction of joint and several liability of all group members for all amounts of unpaid pay-roll tax including penalty tax and unpaid tax interest.
For further details, see our information sheet and select 2 - Grouping of businesses.
