The Queensland Court of Appeal could find no fault in the reasoning of the State's Civil and Administrative Tribunal in a case concerning the grouping of entities for payroll tax purposes.
The Commissioner of State Revenue grouped Telgrove Co with 5 other entities, including Postville Co which was 67% owned by the trustee of the Nahrung Family Trust. The primary beneficiary of the trust was an individual (B Nahrung) who was the majority shareholder of Telgrove Co. The trustee of the Nahrung Family Trust held a non-voting share in Telgrove Co. Telgrove Co purchased machinery and machine parts from Postville Co.
The Commissioner refused to grant Telgrove Co an order pursuant to s 74 of the Payroll Tax Act 1971 (Qld) excluding it from the payroll tax group. However, the State Civil and Administrative Tribunal decided to make the order on the basis that Telgrove Co's business was carried on independently of, and was not connected with, Postville Co's business.
The Appeal Tribunal largely upheld that decision but referred the matter back to the Tribunal to consider whether the existence of unpaid dividends declared by Telgrove Co created financial inter-dependencies between Telgrove Co and other members of the group.
The Queensland Court of Appeal has refused to grant the Commissioner leave to appeal from that decision as the Appeal Tribunal did not, in any way, depart from the orthodox construction of s 74 of the Payroll Tax Act. (Commissioner of State Revenue v Telgrove Pty Ltd [2022] QCA 132, Queensland Court of Appeal, Mullins and Bond JJA and Boddice J, 29 July 2022.)
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