Liability of principal contractor for pay-roll tax payable in respect of employees of subcontractor
(1) This Part applies if:
(a) a person (referred to in this Part as the "principal contractor") has entered into a contract for the carrying out of work by another person (referred to in this Part as the "subcontractor"), and(b) employees of that subcontractor (referred to in this Part as the "relevant employees") are engaged in carrying out the work, and
(c) the work is carried out in connection with a business undertaking of the principal contractor.
(2) If, at the end of the period of 60 days after the end of a financial year, any pay-roll tax payable by the subcontractor in respect of wages paid or payable to the relevant employees during the financial year for work done in connection with the contract has not been paid, the principal contractor is jointly and severally liable with the subcontractor for the payment of the pay-roll tax.
(3) Section 45 of the Taxation Administration Act 1996 (subsection (3) excepted) applies to an amount payable under this section.
Note: Section 44 of the Taxation Administration Act 1996 provides that the amount of tax payable may be recovered by the Chief Commissioner as a debt to the Chief Commissioner. Section 45 of the Taxation Administration Act 1996 provides that if parties are jointly and severally liable for the payment of an amount under a taxation law, the Chief Commissioner may recover the amount payable from any of the parties. It also provides for the recovery of interest, penalty tax and costs from the parties who are jointly and severally liable for the payment of the tax.
Written statement relieves principal contractor of liability
(1) The principal contractor is not liable under this Part for the payment of any pay-roll tax payable in respect of wages paid or payable to the relevant employees during a period if the principal contractor has been given a written statement by the subcontractor in respect of that period.
(2) The written statement is a statement comprising the following statements:
(a) a statement by the subcontractor that the subcontractor is registered as an employer under this Act or is not required to be registered under this Act (whichever is applicable),
(b) a statement by the subcontractor that all pay-roll tax payable by the subcontractor in respect of wages paid or payable to the relevant employees during any period of the contract for work done in connection with the contract has been paid,
(c) a statement by the subcontractor as to whether the subcontractor is also a principal contractor in connection with that work,
(d) if the subcontractor is also a principal contractor in connection with that work, a statement by the subcontractor as to whether the subcontractor has been given a written statement under this section in the capacity of principal contractor in connection with that work.
(3) The written statement may include any statement made by the subcontractor for the purposes of section 127 of the Industrial Relations Act 1996 or a similar provision under any other Act.
(4) The written statement is to be in a form approved by the Chief Commissioner.
(5) The subcontractor must keep a record of a written statement given to a principal contractor under this section.
Note: Section 53 of the Taxation Administration Act 1996 requires the record to be kept for not less than 5 years after it was made.
(6) The principal contractor may withhold any payment due to the subcontractor under the contract until the subcontractor gives a written statement under this section for any period up to the date of the statement. Any penalty for late payment under the contract does not apply to any payment withheld under this subsection.
(7) The written statement is not effective to relieve the principal contractor of liability under this Part if the principal contractor had, when given the statement, reason to believe it was false.
(8) A subcontractor who gives the principal contractor a written statement knowing it to be false is guilty of an offence.
Maximum penalty: 100 penalty units.
Right of recovery
The principal contractor is entitled to recover from the subcontractor as a debt in a court of competent jurisdiction any payment made by the principal contractor as a consequence of a liability arising under this Part.
Application of Part
(1) This Part does not apply in relation to a contract if the subcontractor is in receivership or in the course of being wound up or, in the case of an individual, is bankrupt and if payments made under the contract are made to the receiver, liquidator or trustee in bankruptcy.
(2) To avoid doubt, this Part extends to a principal contractor who is the owner or occupier of a building for the carrying out of work in connection with the building so long as the building is owned or occupied by the principal contractor in connection with a business undertaking of the principal contractor.