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State Taxation and Treasury Legislation
Amendment Bill 2022
Introduction Print
EXPLANATORY MEMORANDUM
General
The Bill amends the Borrowing and Investment Powers Act 1987 to--
repeal Schedule 1 and Division 4 of Part 2 which provides for
the making of Orders in Council declaring sections of the Act
as applying to certain entities; and
provide a new regulation making power to prescribe the
persons to whom, and bodies to which, prescribed sections of
the Act will apply.
The Bill amends the Duties Act 2000 to provide an exemption from motor
vehicle duty from 1 July 2022 in relation to certain wheelchair accessible
motor vehicles that provide unbooked commercial passenger vehicle services.
The Bill amends the Essential Services Commission Act 2001 to clarify
funding arrangements in relation to the Essential Services Commission
Enforcement Fund and the Essential Services Commission Operating Fund.
The Bill amends the Land Tax Act 2005 to--
replace the provision for a land tax refund for land where a
person is absent because of the construction or renovation of a
residence with an exemption; and
provide an exemption from land tax for land on which an SDA
enrolled dwelling provided by an SDA provider within the
meaning of the Residential Tenancies Act 1997 is being
constructed.
The Bill amends the Payroll Tax Act 2007 in relation to certain wages paid
under employment agency and other arrangements.
591333 1 BILL LA INTRODUCTION 10/5/2022
The Bill amends the Taxation Administration Act 1997 to--
clarify the time at which a deemed assessment of a dutiable
transaction processed using the on-line duty payment system is
made and served; and
prescribe authorised recipients of information obtained under
or in the course of administering a taxation law; and
authorise secondary disclosure of information where a person
has the consent of the person to whom the information relates;
and
impose a time limit of 5 years in relation to the power of the
Commissioner of State Revenue to permit an objection to be
lodged out of time.
The Bill amends the Windfall Gains Tax and State Taxation and Other
Acts Further Amendment Act 2021 to provide an exemption from windfall
gains tax for land owned by a university in certain circumstances.
The Bill also makes consequential amendments to the Great Ocean Road
and Environs Protection Amendment Act 2021, Puffing Billy Railway
Act 2022, State Owned Enterprises Act 1992 and Water Act 1989 as a
result of the amendments to the Borrowing and Investment Powers
Act 1987.
Clause Notes
Part 1--Preliminary
Part 1 of the Bill outlines the purposes of the Bill and contains the
commencement provision.
Clause 1 outlines the purposes of the Bill.
Clause 2 provides the commencement dates for the Bill.
Parts 2, 3, 4 and 5 of the Bill, which amend the Borrowing and
Investment Powers Act 1987, the Duties Act 2000, the
Essential Services Commission Act 2001 and the Land Tax
Act 2005 respectively, will come into operation on 1 July 2022.
The other provisions of the Bill will come into operation on the
day after the day on which the Act receives Royal Assent.
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Part 2--Amendment of Borrowing and Investment Powers
Act 1987 and related amendments
Part 2 of the Bill amends the Borrowing and Investment Powers Act 1987
to replace Division 4 of Part 2 and Schedule 1 to that Act, which provide the
mechanisms that specify all the persons and bodies to which certain powers
apply under that Act, with a new regulation making power to prescribe the
persons to whom, and bodies to which, prescribed sections of the Act will
apply.
Division 1--Borrowing and Investment Powers Act 1987
Clause 3 substitutes the definition of authority in section 3(1) of the
Borrowing and Investment Powers Act 1987. The new
definition provides that authority means a person or body that is
prescribed.
This will require all authorities to be prescribed in regulations.
Clause 4 substitutes section 3A of the Borrowing and Investment
Powers Act 1987 to provide that a section of the Act applies to
an authority if the section is prescribed as applying to that
authority.
This requires that the only way a section of the Act can apply to
an authority is if it is so prescribed in regulations.
Clause 5 repeals Division 4 of Part 2 of the Borrowing and Investment
Powers Act 1987 to require that the only way a person or body
can become an authority and have section(s) of the Borrowing
and Investment Powers Act 1987 apply is for it to be prescribed
in regulations.
This repeal is also to move all the regulation making powers
under the Act into new Part 6--see clause 6 below.
Clause 6 inserts new Part 6 into the Borrowing and Investment Powers
Act 1987.
New section 31(1) of the Borrowing and Investment Powers
Act 1987 provides the regulation making powers for the Act.
Paragraphs (a) and (b) are new powers allowing a person or body
to be prescribed as an authority in regulations and allowing
sections of the Act to be prescribed as applying to that person or
body. Paragraphs (c) to (i) replicate the existing regulation
making powers in section 18(1) that will be repealed by clause 5.
3
New section 31(2) replicates the existing regulation making
powers in section 18(2) that will be repealed by clause 5.
Clause 7 repeals Schedule 1 of the Borrowing and Investment Powers
Act 1987 as it will no longer have any effect as a consequence of
the amendments contained in this Division.
Division 2--Consequential amendments to other Acts
Clause 8 makes an amendment to proposed new section 62D(1) of the
Great Ocean Road and Environs Protection Act 2020 in
section 16 of the Great Ocean Road and Environs Protection
Amendment Act 2021 and repeals Part 3 of the Great Ocean
Road Environs Protection Act 2020. This amendment and
repeal is consequential to the amendments contained in
Division 1.
Clause 9 repeals section 45 of the Puffing Billy Railway Act 2022. This
repeal is consequential to the amendments contained in
Division 1.
Clause 10 makes an amendment to section 14A of the State Owned
Enterprises Act 1992. This amendment is consequential to the
amendments contained in Division 1.
Clause 11 makes amendments to sections 253, 254 and 255 of the Water
Act 1989. These amendments are consequential to the
amendments contained in Division 1.
Part 3--Amendment of Duties Act 2000
Part 3 of the Bill amends the Duties Act 2000 to provide an exemption from
motor vehicle duty for certain wheelchair accessible motor vehicles that meet
the relevant requirements to provide unbooked commercial passenger vehicle
services.
Clause 12 inserts new section 233CB into the Duties Act 2000 to provide
an exemption from motor vehicle duty under Chapter 9 of the
Duties Act 2000 on an application for registration or transfer of
registration of a wheelchair accessible motor vehicle.
New section 233CB(1) sets out the eligibility requirements for
the exemption. To be entitled to the exemption, the
Commissioner must be satisfied that the vehicle is, or will be
within the specified period, registered under Part 3 of the
Commercial Passenger Vehicle Industry Act 2017 and will be
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lawfully used to provide unbooked commercial passenger vehicle
services within the specified period. Unbooked commercial
passenger vehicle services are commercial passenger vehicle trips
that commence at a rank or are hailed from the street.
Importantly, to lawfully use a vehicle to provide unbooked
commercial passenger vehicles services, the vehicle must comply
with all the requirements of the Commercial Passenger Vehicle
Industry Act 2017 for such vehicles, such as having a fare
calculation device and cameras installed. Unlike the exemption
in section 233CA of the Duties Act 2000, for this exemption to
apply, the vehicle must be specially converted to provide
wheelchair access to and egress from the vehicle and be capable
of carrying at least one occupied wheelchair at the time of the
application.
New section 233CB(2) provides that the exemption can only
apply to new or near-new vehicles in the sense that the vehicle
must never been registered before or, if it had, the first
registration was less than 2 years from the current application.
New sections 233CB(3) and (4) set out a notification requirement
that a person who has received the exemption within the
specified period must provide the Commissioner with evidence
that the vehicle is able to be lawfully used to provide unbooked
commercial passenger vehicle services or lodge a written notice
that the vehicle is not able to be lawfully used to provide
unbooked commercial passenger vehicle services. Depending on
the circumstances, the notification requirement may also require
the person to provide the Commissioner with evidence that the
vehicle is registered under Part 3 of the Commercial Passenger
Vehicle Industry Act 2017 or to lodge a written notice with the
Commissioner that the vehicle has not been so registered.
New section 233CB(5) provides the Commissioner with
discretion to, upon request, approve a period that is longer than
3 months from the date of the application for registration or
transfer of registration of the vehicle, to be the "specified period"
for the purpose of the exemption.
New section 233CB(6) provides that the discretion under
subsection (5) can only be approved if a request is made at the
time of the application for registration or transfer of registration
of the vehicle or before the expiry of 3 months from the date on
which the application was made. If the Commissioner approves
the request after expiration of the 3 month period then new
5
section 233CB(7) provides that the specified period is taken to
have continued uninterrupted. This ensures the provisions of
new section 233B(8) do not apply before the end of the extended
period
New section 233CB(8) provides that if after the end of the
specified period the vehicle is not registered under Part 3 of the
Commercial Passenger Vehicle Industry Act 2017 or is
otherwise not able to be lawfully used to provide unbooked
commercial passenger vehicle services the application for
registration or transfer of registration that had been exempted is
chargeable with duty and the Commissioner may reassess duty on
the application accordingly.
New section 233CB(9) inserts new definitions of specified
period, unbooked commercial passenger vehicle service and
wheelchair accessible motor vehicle for the purposes of this new
section.
Part 4--Amendment of Essential Services Commission Act 2001
Part 4 of the Bill amends the Essential Services Commission Act 2001 to
clarify certain arrangements in relation to the Essential Services Commission
Enforcement Fund and Essential Services Commission Operating Fund,
which fund the enforcement and other functions of the Essential Services
Commission.
Clause 13 inserts new section 54ZQ(ha) into the Essential Services
Commission Act 2001 to clarify that amounts appropriated for
the purposes of the Essential Services Commission Enforcement
Fund are paid into that fund.
Clause 14 inserts new section 54ZR(ab) and (ac) into the Essential Services
Commission Act 2001 to enable the Essential Services
Commission Enforcement Fund to be used to fund compliance
monitoring and investigations under the Victorian Energy
Efficiency Target Act 2007 and the Victorian Renewable
Energy Act 2006.
Clause 15 inserts new section 54ZU(da) into the Essential Services
Commission Act 2001 to clarify that amounts appropriated for
the purposes of the Essential Services Commission Operating
Fund are paid into that fund.
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Clause 16 amends section 54ZV(a) in the Essential Services Commission
Act 2001 to enable the Essential Services Commission Operating
Fund to fund the functions of the Essential Services Commission
under section 10AA of the Essential Services Commission
Act 2001.
Part 5--Amendment of Land Tax Act 2005
Division 1--Principal place of residence
Division 1 of Part 5 of the Bill amends the Land Tax Act 2005 to replace the
provision for a land tax refund for land where a person is absent because of
the construction or renovation of a residence with an exemption.
Clause 17 inserts new sections 39A and 39B into the Land Tax Act 2005.
Where land is jointly owned, section 38 contains the general
"two-level" rules for assessing joint owners of taxable land,
namely that joint owners of taxable land are to be jointly assessed
for land tax on the land as if it were owned by a single person--
joint ownership level (section 38(2)); each joint owner of taxable
land is to be separately assessed for land tax on the owner's
individual interest in land and any other taxable land owner by
the owner alone and the owner's individual interest in any other
taxable land--individual owner level (section 38(3)); and a
deduction is provided under section 38(4) to avoid double
taxation.
Section 39(1) contains a special assessing rule where not all of
the joint owners reside at the principal place of residence land.
Essentially, if land that is jointly owned is exempt land because it
is the principal place of residence of one or more, but not all, of
the joint owners, no land tax is jointly assessable and each
non-residing joint owner may be separately assessed in respect of
that land under section 38(3).
Section 39(1) does not apply to land that is exempt under new
section 61. Accordingly, new section 39A applies to land that is
owned by joint owners and exempt from land tax under new
section 61 (inserted by clause 21 of this Bill), where some but not
all of the joint owners come within the scope of a principal place
of residence exemption (e.g. trustee of a discretionary trust), or
where some but not all of the qualifying persons intend to
continuously use and occupy the land as their principal place of
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residence for a period of at least 6 months following completion
of the construction or renovation works.
New section 39A(1) provides that where land owned by joint
owners is exempt under new section 61 in respect of a tax year,
the special assessing rules provided in new section 39A(2) will
apply if, as at 31 December of the preceding year, either--
one or more of the joint owners is not a qualifying
person, an eligible trustee or an eligible restricted
owner; or
one or more qualifying persons do not intend to
continuously use and occupy the land as their principal
place of residence for a period of at least 6 months
commencing on or before the qualifying occupation
date ("the residence requirement").
The terms eligible trustee and eligible restricted owner are
defined in new section 39A(3).
New section 39A(2) sets out the special assessing rules which
ensure that the joint owners are not to be jointly assessed for land
tax at the joint ownership level. At the individual owner's level,
the land is taxable land in relation to each joint owner referred to
under new subsection 39A(2)(b), and each joint owner may be
separately assessed in respect of the land in accordance with
section 38(3).
New section 39A(3) inserts new definitions for the purposes of
this section.
eligible trustee means trustee of a trust holding land for which
there is a vested beneficiary--see definition of vested beneficiary
in section 3(1).
eligible restricted owner means an owner of land on which a
natural person has a right to reside (right to reside is as defined in
section 53A).
The terms qualifying occupation date, qualifying person and
trustee have the same meaning as in section 52(1) of the Land
Tax Act 2005. These definitions are inserted into section 52(1)
by clause 19 of this Bill.
8
New section 39B provides a special assessing rule for joint
owners of land that is exempt under new section 61 where the
residence requirement is completed by one or more, but not all,
qualifying persons.
Where land owned by joint owners is exempt under new
section 61 in respect of a tax year, new section 39B(1) provides
that the special assessing rule in new section 39B(2) will apply if
at least one of the following conditions is satisfied--
one or more, but not all, of the joint owners is a
qualifying person who did not meet the residence
requirement; or
one or more, but not all, of the joint owners is an
eligible trustee and a relevant vested beneficiary did not
meet the residence requirement; or
one or more, but not all, of the joint owners is an
eligible restricted owner and the natural person with a
right to reside did not meet the residence requirement.
New section 39B(2) sets out the special assessing rules. That is,
at the joint ownership level, the joint owners are not to be jointly
assessed for land tax in respect of the land under section 38(2),
(2A) or (2B). At the individual owner's level, the land is taxable
land in relation to each joint owner referred to in new
section 39B(1)(b) and may be separately assessed in respect of
the land under section 38(3).
New section 39B(3) contains the same definitions as set out
under new section 39A(3), namely, eligible restricted owner,
eligible trustee, qualifying occupation date, qualifying person,
right to reside and trustee.
Clause 18 inserts several new Subdivision headings into Division 1 of
Part 4 of the Land Tax Act 2005, which relates the various land
tax principal place of residence exemptions. These headings are
"Subdivision 1--Interpretation"; "Subdivision 2--Principal place
of residence exemption; "Subdivision 3--Absence, death and
land unfit for occupation"; Subdivision 4--Purchase and sale of
principal place of residence; Subdivision 5--Construction and
renovation of principal place of residence"; and "Subdivision 6--
Partial exemptions".
9
Clause 19 inserts new definitions of qualifying occupation date, qualifying
person, works finish date and works start date into section 52(1)
of the Land Tax Act 2005. These definitions apply only for the
purpose of Division 1 of Part 4 of the Land Tax Act 2005 and
are relevant for determining eligibility for the new section 61
exemption inserted by clause 21 of this Bill.
qualifying occupation date for a residence constructed or
renovated on land is defined to mean the earlier of 6 months after
the works finish date for the construction or renovation or 4 years
after the works start date of the construction or renovation. This
is the date when a qualifying person must commence the
minimum 6-month residence requirement (see new sections
61(1)(b), 61D and 61E inserted by clause 21 of this Bill).
qualifying person, in relation to land, means--
a natural person owner of the land, other than a person
who is a trustee or beneficiary of a trust to which the
land is subject, a unitholder in a unit trust scheme to
which the land is subject, or the owner of land on which
a natural person has a right to reside;
a natural person who has a right to reside on the land
(a right to reside is defined under section 53A);
a vested beneficiary, as defined in section 3(1), of a
trust to which the land is subject.
works finish date means the date that an occupancy permit or a
certificate of final inspection is issued under the Building
Act 1993, or the date on which the construction or renovation is
completed. An owner of land is required to notify the
Commissioner of this date under new section 61B inserted by
clause 21 of this Bill.
works start date, for the construction or renovation of a residence
on land, means the earliest of--
the date nominated by the owner of the land and
accepted by the Commissioner under new section 61A;
the date of the issue of any permit under the Planning
and Environment Act 1987;
the date of the issue of a building permit for the
construction or renovation;
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the date of the commencement of the construction or
renovation.
Clause 20 amends section 55A of the Land Tax Act 2005, which provides
for the deferral of land tax on certain residential land for
6 months. The purpose of the amendment is to enable the
Commissioner to defer land tax for 6 months in respect of land
that was exempt under new section 61 in the preceding tax year
if--
the works finish date for the construction or renovation
of the residence on the land was on or after 1 July in the
preceding year;
as at 31 December in the preceding year, a qualifying
person in relation to the land did not use or occupy the
land as their principal place of residence; and
the Commissioner is satisfied that the qualifying person
intends to use and occupy the land as their principal
place of residence for 6 months within the tax year.
If the land is continuously used and occupied as the principal
place of residence of the qualifying person for the 6 month period
that begins and ends in that year, the land will become exempt
land in respect of that year at the end of that period.
Clause 21 substitutes section 61 and inserts new sections 61A to 61H into
the Land Tax Act 2005. Existing section 61 provides for a
taxpayer to apply for a refund of land tax paid while construction
or renovation of a principal place of residence on the land was
being carried out.
New section 61 replaces this with an upfront exemption which is
available for up to 4 tax years where the Commissioner is
satisfied the requirements set out in new section 61(1) have been
met. These requirements include--
as at 31 December in the preceding year, a qualifying
person in relation to the land did not use and occupy the
land as their principal place of residence as the
residence was being constructed or renovated; and
as at 31 December in the preceding year, a qualifying
person in relation to the land intends to use and occupy
the land as their principal place of residence for at least
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6 months commencing on or before the qualifying
occupation date; and
the owner of the land did not derive any income from
the land in the preceding year; and
for land that a natural person has a right to reside on, the
land was exempt as a principal place of residence under
section 54(1)(a) or (b) immediately before the right to
reside was granted to the person, and that person is not
entitled to another exemption under this Division, or
under a law of any other State or Territory that
corresponds to this Division, in respect of any land; and
for land other than land that a natural person has a right
to reside on, the owner was not entitled to an exemption
under this Division in respect of any other land or a land
tax exemption under a law of any other State or
Territory that corresponds to this Division.
New section 61(2) provides that the exemption does not apply for
an applicable year that is 5 years or more after the year in which
the works start date occurred. The effect of this provision is that
the exemption is only available for a maximum of 4 tax years
after the year in which the works start date occurred. For
example, if works start date occurs in August 2022, the
exemption applies to the 2023, 2024, 2025 and 2026 tax years.
New section 61(3) requires the owner of land to apply to the
Commissioner for the exemption and provide any information
requested by the Commissioner for the purpose of determining
whether the land is exempt.
New section 61(4) provides that if only part of the land meets the
exemption conditions under section 61, the exemption applies
only to that part of the land, and land tax is assessable on the
remaining part of the land, unless another exemption applies to
that part. Existing section 22 applies for the purpose of
determining taxable values of parts of land that are not separately
valued. For example, if a landowner is constructing two units on
a property and intends to use and occupy only one of the units as
their principal place of residence, an exemption under new
section 61 will only apply to the part of the land comprising that
unit, provided that all the other exemption conditions are met.
Land tax may be assessable on the remaining part of the property
unless another exemption applies to that part.
12
New section 61A provides that an owner of land who applies for
an exemption under section 61 may nominate a works start date,
which is the day on which the owner undertakes any of the
following specified activities in respect of the construction or
renovation of a residence on the land--
obtaining a quote;
consulting an architect, a builder or a planner;
the preparation of an application for a planning permit;
the preparation of an application for a building permit;
or
any other similar preparatory activity.
New section 61A(3) requires an owner of land to nominate a
works start date in writing and give the nomination to the
Commissioner at the time of making an application for the
exemption and include evidence of the works.
New section 61A(4) provides that the Commissioner must either
accept the nomination, if satisfied that the nomination includes
sufficient evidence that the specified activity has been
undertaken, or reject the nomination.
New sections 61B to 61F require the owner of land exempt under
new section 61 to give written notice to the Commissioner of
certain things, within a certain time. A failure to notify the
Commissioner is a notification default and penalty tax may apply
in accordance with the Taxation Administration Act 1997.
New section 61B requires the owner of land to notify the
Commissioner of the date on which the construction or
renovation was completed if a building permit was not issued,
which is the works finish date. Notice must be given within
30 days after this date and be accompanied by evidence.
Section 61C requires the owner of the land to notify the
Commissioner if the works finish date has not occurred on the
date that is 4 years after the works start date. This means that the
construction or renovation of a residence has not been completed
within 4 years from its commencement. Notice must be given
within 30 days after the date that is 4 years after the works start
date.
13
New section 61D requires an owner of land to notify the
Commissioner if a qualifying person does not start using and
occupying the land as their principal place of residence on or
before the qualifying occupation date. Notice must be given
within 30 days after the qualifying occupation date.
New section 61E requires the owner of land to notify the
Commissioner if a qualifying person does not continuously use
and occupy the land as the person's principal place of residence
for at least 6 months commencing on or before the qualifying
occupation date. Notice must be given within 30 days after the
date that is 6 months after the qualifying occupation date.
New section 61F requires the owner of land to notify the
Commissioner if the owner intends to cease to be the owner
before a qualifying person in relation to the land completes a
period of continuous use and occupation of the land as their
principal place of residence for at least 6 months commencing on
or before the qualifying occupation date. Notice must be given
within 30 days before the person ceases to be the owner of the
land.
New section 61G provides that the Commissioner may revoke an
exemption under new section 61 and may assess or reassess land
tax if--
the construction or renovation has not been completed
within 4 years;
a qualifying person does not continuously use and
occupy the land as their principal place of residence for
a period of at least 6 months commencing on or before
the qualifying occupation date; or
the land owner ceases to be the owner before a
qualifying person completes the 6-month residence
period under subsection (2).
New section 61H confirms that Subdivision 5 of Division 1 of
Part 4 of the Land Tax Act 2005 applies to land or part of land
whether or not there has been a change in the legal description of
the land or part of the land. An example of a change in the legal
description of the land is the issuing of new certificates of title of
land following a subdivision of the land.
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Clause 22 makes consequential amendments to the Taxation
Administration Act 1997.
Subclause (1) amends the definition of notification default in
section 3(1) of the Taxation Administration Act 1997 to
include a failure to give notice to the Commissioner in
accordance with new sections 61B, 61C, 61D, 61E or 61F of the
Land Tax Act 2005 inserted by clause 21 of this Bill.
Subclause (2) amends section 30(2A) of the Taxation
Administration Act 1997 to insert a reference to sections 61B,
61C, 61D, 61E, 61F and 70N of the Land Tax Act 2005.
Section 30(2A) provides for the increase in penalty tax in relation
to notification defaults.
Subclause (3) amends section 81 of the Windfall Gains Tax and
State Taxation and Other Acts Further Amendment Act 2021
as a consequence of the amendments made by subclause (1).
Division 2--SDA enrolled dwellings
Division 2 of Part 5 of the Bill amends the Land Tax Act 2005 to provide an
exemption from land tax for land on which an SDA enrolled dwelling is
being constructed.
Clause 23 inserts definitions of residential service, SDA enrolled dwelling
and SDA provider into section 3(1) of the Land Tax Act 2005.
residential service has the same meaning as in section 3(1) of the
Disability Act 2006, whereas SDA enrolled dwelling and SDA
provider have the same meaning as in section 3(1) of the
Residential Tenancies Act 1997.
Clause 24 removes references to the Disability Act 2006 and Residential
Tenancies Act 1997 in section 76A(1)(a) and (b) of the Land
Tax Act 2005, due to the insertion of definitions of residential
service, SDA enrolled dwelling and SDA provider by clause 23
of this Bill that apply to the Act as a whole.
Clause 25 amends section 78A of the Land Tax Act 2005.
Subclause (1) inserts new section 78A(1)(e) to exempt land on
which a building, once constructed, becomes an SDA enrolled
dwelling.
15
The exemption will apply in respect of the land until the earlier
of the date of completion of construction of the SDA enrolled
dwelling or the expiry of 2 tax years following the date of
commencement of construction.
If a building permit for the construction of an SDA enrolled
dwelling lapses before the applicable date under section 78A(2)
of the Land Tax Act 2005 and a subsequent building permit is
issued in respect of that construction, the date of issue of the
building permit referred to in section 78A(3) is the date of issue
of the first building permit. This will ensure that the issue of a
subsequent building permit where the first building permit lapses
does not trigger a second period of exemption under
section 78A(2).
If the Commissioner is satisfied that only a part of land is being
used for the construction of an SDA enrolled dwelling, land tax is
assessable on the remaining part of the land, unless another
exemption applies to that part, and section 22 of the Land Tax
Act 2005 applies, if necessary, to the land.
Subclauses (2) to (5) insert additional references to SDA enrolled
dwellings into section 78A.
Subclause (6) repeals section 78A(8), which defines the term
residential service, as that definition has been moved to
section 3(1) of the Act by clause 23 of this Bill.
Division 3--Transitional provisions
Division 3 of Part 5 of the Bill amends the Land Tax Act 2005 to provide
transitional arrangements for the new section 61 exemption contained in
Division 1 of Part 5 of this Bill.
Clause 26 inserts new clauses 19 and 20 into Schedule 3 to the Land Tax
Act 2005.
New clause 19 provides that section 61, as in force immediately
before the commencement day of 1 July 2022 (see clause 2 of
this Bill) continues to apply to an owner who was assessed for
land tax in respect of land if a construction or renovation of a
residence on land is completed before the commencement day.
This is a transitional provision which provides that the owners
who have paid land tax are entitled to apply for a refund of tax
paid for the relevant tax year under the former section 61 if the
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construction or renovation of a residence is completed before the
commencement day.
New clause 20 provides temporary arrangements in respect of an
applicable year where the construction or renovation of a
residence is not completed before commencement day of 1 July
2022 (see clause 2 of this Bill). The applicable years are the
2019, 2020, 2021 and 2022 tax years.
New subclause (1) provides that land is exempt land if a
residence was being constructed or renovated on the land, the
works finish date did not occur before 1 July 2022 and the
Commissioner is satisfied that the exemption conditions under
new section 61(1)(a) to (e) are met.
New subclause (2) provides that the exemption does not apply for
an applicable year that is 5 years or more after the year in which
the works start date occurred. This is consistent with the
exemption under new section 61 which is only available for a
maximum of 4 tax years after the year in which the works start
date occurred.
New subclause (3) provides that an owner must apply to the
Commissioner for the exemption and give any information
requested by the Commissioner for the purposes of enabling the
Commissioner to determine whether the land is exempt under
that subclause.
New subclause (4) provides that if the Commissioner is satisfied
as to the matters set out in new section 61(1)(a) to (e) with
respect to only part of the land, a partial exemption applies to that
part, and land tax is assessable on the remaining part of the land
unless another exemption applies. Section 22 applies for the
purpose of determining taxable values of parts of land that are not
separately valued.
New subclause (5) provides that new section 61A applies to an
owner of land who makes an application under new subclause (3)
as if the reference to new section 61 were reference to new
subclause (1). This means that an owner of land who makes an
application under new subclause (3) may nominate a works start
date.
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New subclause (6) provides that new sections 61B, 61C, 61D,
61E and 61F apply to the owner of land that is exempt under new
subclause (1) as if each reference to section 61 were a reference
to subclause (1).
New subclause (7) provides that new sections 39A, 39B and 61G,
and section 55A as amended, apply in respect of land that is
exempt land under subclause (1) as if each reference to section 61
in those sections were a reference to subclause (1). The intended
effect of this provision is to apply the joint ownership provisions
(new sections 39A and 39B) in relation to an exemption under
subclause (1), to allow the Commissioner to revoke an exemption
under subclause (1) (new section 61G) and to apply the amended
section 55A (deferral of tax for land to be used during a tax year)
in relation to an exemption under subclause (1).
New subclause (8) confirms that new clause 20 applies to land or
part of land whether or not there has been a change in the legal
description of the land or part of the land.
Part 6--Amendment of Payroll Tax Act 2007
Part 6 of the Bill amends the Payroll Tax Act 2007 provisions relating to
employment agents. An exemption is currently available for payments made
to or in relation to a service provider under an employment agency contract if
that payment would be exempt had the service provider been paid by the
client as an employee. The client must provide a declaration to the
employment agent to that effect.
The amendments provide for a similar exemption for wages paid or payable
to a service provider where the service provider is a common law employee
of the employment agent.
Clause 27 inserts a new definition of service provider into section 3(1) of
the Payroll Tax Act 2007. The definition refers to section 37 of
that Act, which defines a service provider as the person whose
services are procured by an employment agent for the client.
Clause 28 inserts new section 36A into the Payroll Tax Act 2007 to
provide that the employment agency provisions in Division 8 do
not apply to wages which are exempt under new section 66B and
new clause 19A of Schedule 2.
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Clause 29 inserts new Division 10, consisting of new section 66B, into
Part 4 of the Payroll Tax Act 2007. Part 4 deals with
exemptions and is made up of nine Divisions dealing with
various exemption categories.
New section 66B provides an exemption for employment agents
supplying their common law employees to their clients under an
employment agency contract as provided for in new clause 19A
of Schedule 2 to the Payroll Tax Act 2007.
Clause 30 inserts new clause 19A in Schedule 2 to the Payroll Tax
Act 2007, which provides an exemption for wages paid or
payable by employment agents supplying the services of their
common law employees to their clients, where the client is
exempt from payroll tax. A similar provision exists for service
providers who are not common law employees of the agent
(existing section 40(2) of the Payroll Tax Act 2007). New
clause 19A provides the same exemption for service providers
who are common law employees of the agent.
New clause 19A(1) provides an exemption for wages paid for
services performed under an employment agency contract by a
service provider who is an employee of the employment agent in
circumstances where the wages would be exempt under the
relevant provisions in Part 4 of the Payroll Tax Act 2007 had the
service provider performed the services as an employee of the
client.
New clause 19A(2) provides an exemption for wages paid or
payable for services performed in the prescribed circumstances
by a prescribed person, or class of persons, where the wages
would be exempt under the relevant provisions in Part 4 of the
Payroll Tax Act 2007 had that person performed the services as
an employee of the person for whom the services were
performed.
This subclause provides a further regulation making power to
provide the exemption in response to any new developments and
practices relating to employment agents, to ensure that
employment agents supplying their common law employees to
their clients, who are exempt from payroll tax, will qualify for the
exemption where they meet the relevant conditions.
New clause 19A(3) provides that a reference to an employee in
clause 19A does not include an employee who is deemed to be an
employee under the Payroll Tax Act 2007. This ensures the
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exemption applies only to common law employees of the agent
and not deemed employees.
Part 7--Amendment of Taxation Administration Act 1997
Part 7 of the Bill amends the Taxation Administration Act 1997 to deem
that a notice of assessment of duty has been issued where a transaction is
processed using the online system for payment of land transfer duty;
prescribe authorised recipients of information obtained under or in the course
of administering a taxation law; authorise secondary disclosure of
information with the consent of the person to whom the information relates;
and provide a time limit of 5 years on the lodgement of late objections.
Clause 31 substitutes section 12A of the Taxation Administration
Act 1997.
New section 12A(1) provides that if the on-line duty payment
system is used in respect of a dutiable transaction under the
Duties Act 2000, the Commissioner is taken to have made an
assessment of duty liability of a taxpayer if a person makes an
irrevocable commitment to pay the duty payable in respect of the
dutiable transaction or to not pay any duty, if no duty is payable
in respect of the dutiable transaction.
New section 12A(2) provides that a deemed assessment under
new section 12A(1) is taken to have been made on the later of the
making of the irrevocable commitment to pay duty or to not pay
duty (as the case requires) or the completion of the dutiable
transaction.
New section 12A(3) provides that a deemed assessment may
consist of or include a determination that there is no tax liability.
New section 12A(4) provides that if the on-line duty payment
system is used in respect of a dutiable transaction under the
Duties Act 2000 and a person has not made an irrevocable
commitment to pay or not pay duty, any amount (including a nil
amount) that the on-line duty payment system indicates is
payable or not payable in respect of the transaction is an estimate
only and not taken to be an assessment of the tax liability of a
taxpayer.
Clause 32 amends section 92 of the Taxation Administration Act 1997 to
permit a tax officer to disclose information obtained under or in
relation to a taxation law to the Australian Financial Security
Authority (AFSA), the Australian Transaction Reports and
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Analysis Centre (AUSTRAC), a prescribed Commonwealth
enforcement body or a body that is a member of the Phoenix
Taskforce.
Subclause (1) inserts subparagraphs (vhb) to (vhe) into
section 92(1)(e) of the Taxation Administration Act 1997.
Subparagraph (vhb) permits disclosure to AFSA. The
amendment will allow a tax officer to disclose information
obtained under the administration of Victoria's taxation laws,
which may assist AFSA's investigations into whether a person
has committed an offence against the Bankruptcy Act 1966 of the
Commonwealth.
Subparagraph (vhc) permits disclosure to AUSTRAC. This
amendment will allow a tax officer to disclose information
obtained under the administration of Victoria's taxation laws
which may assist AUSTRAC in its investigations into
individuals, businesses and organisations to ensure they are
complying with their obligations under the Anti-Money
Laundering and Counter-Terrorism Financing Act 2006 of the
Commonwealth and the Financial Transaction Reports Act 1988
of the Commonwealth.
Subparagraph (vhd) permits disclosure to a prescribed
Commonwealth enforcement body, for the purposes of criminal
investigations or inquiries, law enforcement activities or public
revenue protection activities conducted by the body. This will
allow a tax officer to disclose information obtained under the
administration of Victoria's taxation laws to a restricted cohort of
authorised recipients.
Subparagraph (vhe) permits disclosure to a body that is a member
of the Phoenix Taskforce. The Phoenix Taskforce, established by
the Australian Taxation Office, consists of representatives of
several Commonwealth, State and Territory agencies and revenue
offices. This will allow a tax officer to disclose information
obtained under the administration of Victoria's taxation laws to
the Phoenix Taskforce to assist with monitoring and deterring
fraudulent phoenix activity.
Subclause (2) inserts definitions of Commonwealth enforcement
body and Phoenix Taskforce into section 92(2) of the Taxation
Administration Act 1997.
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Clause 33 substitutes section 94(1)(a) and (b) of the Taxation
Administration Act 1997 with new paragraphs (a) and (b) to
clarify that the prohibition on secondary disclosure does not
apply to disclosures made with the consent of the person to
whom the information relates, i.e. disclosures made under section
92(1)(a) of the Taxation Administration Act 1997. This will
facilitate secondary disclosure and use of information in
accordance with the consent of the person to whom that
information relates or at the request of a person acting behalf of
that person.
Clause 34 inserts new section 100(1A) of the Taxation Administration
Act 1997 to provide that an objection lodged out of time must be
lodged within 5 years after the date of service of the notice of
assessment or decision on the taxpayer. This will ensure
certainty and finality in respect of historic taxation matters.
Clause 35 substitutes section 125A(3) of the Taxation Administration
Act 1997 to provide for when service of a deemed assessment is
effective. New subsection (3) provides that if the on-line duty
payment system is used, the Commissioner is taken to have
served the deemed assessment on a taxpayer on the later of--
the making of an irrevocable commitment to pay or not
pay the duty payable in respect of the dutiable
transaction; or
the completion of the dutiable transaction.
Part 8--Amendment of Windfall Gains Tax and State Taxation
and Other Acts Further Amendment Act 2021
Part 8 of the Bill amends the Windfall Gains Tax and State Taxation and
Other Acts Further Amendment Act 2021 to provide an exemption from
windfall gains tax for land owned by a university in certain circumstances.
Clause 36 inserts new section 40A into the Windfall Gains Tax and State
Taxation and Other Acts Further Amendment Act 2021.
New section 40A(1) provides an exemption from windfall gains
tax for land owned by a university that is rezoned by a WGT
event. To be entitled to the exemption, the university must be a
charity and must satisfy the Commissioner that any land revenue
from the land will be used to further the university's charitable
purposes.
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The exemption is not intended to apply to a university that
intends to use revenue generated from rezoned land to advance
its non-charitable objects, such as commercial interests. Nor is
the exemption intended to apply where a university simply adds
the revenue to surplus funds for a use to be determined in the
future. Rather, there needs to be a link to the intended use of the
land revenue and the university's charitable objects.
New section 40A(2) provides that, for the purpose of the
Commissioner being satisfied under new section 40A(1)(c) that
land revenue from land will be used to further the university's
charitable purposes, the university must provide the
Commissioner with a declaration as to the nature and intended
application of the land revenue and how the application of the
land revenue will further the university's charitable purposes.
Existing provisions under the Taxation Administration
Act 1997 make it an offence for a false or misleading declaration
to be provided to the Commissioner.
New section 40A(3) inserts definitions for the purposes of this
section.
land revenue means any revenue arising from the sale or use of
the land, including sale, rental or licensing proceeds.
registered higher education provider has the same meaning as in
section 5 of the Tertiary Education Quality and Standards
Agency Act 2011 of the Commonwealth.
university means a registered higher education provider that is
registered under the Tertiary Education Quality and Standards
Agency Act 2011 of the Commonwealth in the "Australian
University" provider category of the Higher Education Standards
Framework. This definition means that only Australian
universities will be able to access the exemption.
Part 9--Repeal of this Act
Clause 37 provides for the automatic repeal of the Act on 1 July 2023.
The repeal of the Act does not affect the continuing operation of
the amendments made by it (see section 15(1) of the
Interpretation of Legislation Act 1984).
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