Talking Tax – Issue 98


Payroll taxes – still no relief for the Brisbane Lions

On Friday 6 October 2017, in Brisbane Bears – Fitzroy Football Club Limited v Commissioner of State Revenue [2017] QCA 223, the Supreme Court of Queensland Court of Appeal (Court of Appeal), dismissed the Taxpayer’s appeal against the Supreme Court’s decision in Brisbane Bears - Fitzroy Football Club Ltd v Commissioner of State Revenue [2016] QSC 231 (14 October 2016).

The Court of Appeal upheld the primary judge’s finding that payments to employed coaches and players for the use of image rights were taxable wages and liable to the payroll tax.

As discussed in Talking Tax Issue 54, in 2016, Brisbane Bears – Fitzroy Football Club Ltd (Taxpayer), known as the Brisbane Lions, lost an appeal regarding payroll tax reassessments for the years ending 30 June 2008 to 30 June 2012.

The Taxpayer took the position that various payments made to players and coaches for the use of image rights whereby they agreed to provide promotional or marketing services were not payments of taxable wages under the Payroll Tax Act 1971 (Qld) (Act). The Commissioner disagreed with this interpretation and increased the payroll tax payable by the Taxpayer.

The primary judge undertook a process of characterisation by reference first to whether the payment falls within the definition of ‘wages’, and secondly, to whether payments were made by an employer for or in respect of services performed or rendered.

In relation to the characterisations, payments for marketing and promotional services were found to be included in the definition of ‘wages’ under the players’ and coaches’ service agreements and were directly associated with services rendered.

The use of the players’ images was for purposes related to the players’ actual performance of promotional or marketing activities, which were governed by the service agreements in place between the parties. As such, it was correct for the payments made by the Taxpayer to be characterised as payments made as an employer in consideration of promotional and marketing services performed under that agreement, and therefore subject to payroll tax. On this basis, the Taxpayer’s application to the Supreme Court was dismissed.

Following this dismissal, the Taxpayer appealed to the Court of Appeal against the decision of the primary judge. The central issue on appeal was whether the primary judge erred in finding that payments made by the Taxpayer to players and coaches for use of images are taxable wages for the purposes of the Act.

His Honour found that the Taxpayer’s evidence did not support the argument that payments made relating to the use of player or coach images:

  • were payments in consideration for the use and/or exploitation of image rights and
  • were not payments in relation to services rendered or performed by those players and coaches.

As such, His Honour concluded that the primary judge’s finding was correct. The Taxpayer could not establish that payments made for the use of image rights were made other than in the course of the provision of promotional or marketing activities, or independently from the provision of such services. As such, the Court of Appeal agreed that these payments were liable for payroll tax and the appeal was dismissed.

ATO Updates

Cracking down on cash only businesses

Businesses in Australia that only operate and deal with cash are what the ATO has deemed a ‘hidden economy’. Businesses using cash only are an ongoing focus for the ATO. To target businesses that operate in this way, the ATO has said that it will focus on:

  • industries where cash payments are common
  • data matching that suggests businesses don’t take electronic payments and
  • gaps between the relative income to that of the business owner’s lifestyle.

The ATO is running an information session in Melbourne on Monday 30 October 2017 for honest cash businesses to learn how to protect themselves. If you would like more information, please click here.

Charity status revoked for failing to lodge annual statements

As a registered charity, you must submit an Annual Information Statement (AIS). Failing to do this has significant consequences, including having your charity status revoked.

Last week, the ACNC announced that in early August 2017, 190 charities were notified that they were at risk of losing their charity status. As a result, of those 190 charities, 86 of them have twice failed to submit their AISs and therefore their registration has been revoked. This means that these 86 charities will lose the ability to apply for Commonwealth charity tax concessions.

Acting ACNC Commissioner David Locke said that there are currently more than 2,000 charities that are overdue in lodging their AIS.

If we can assist you in meeting these compliance obligations or advise more broadly, please contact Frank Hinoporos.

GST Updates

GST revenue distribution: Horizontal Fiscal Equalisation

On Monday 9 October 2017, the Productivity Commission released a draft report on horizontal fiscal equalisation (HFE) in relation to how the $60bn in annual GST revenue is distributed to the States and Territories. The Treasurer has said that a full response will be issued in a final report on 31 January 2018.

GST Tax Ruling: Foreign Exchange Conversions

On Wednesday 4 October 2017, the ATO released an Addendum to GSTR 2001/2 (GST: Foreign exchange conversions) (Ruling). This Addendum amends the Ruling to incorporate the additional conversion day options available to certain non-residents under the Goods and Services Tax: Foreign Currency Conversion Determination (No 1) 2017 (FOREX 2017/1).

If you are a foreign limited registration entity or a non-resident entity that makes inbound intangible consumer supplies, if an amount of the consideration for the supply is expressed in a foreign currency, this Ruling applies to you.

For more information, please contact Raoul D’Cruz or Michael Parker.

Significant Global Entities Reporting Update

There has been a recent update in relation to the obligation for significant global entities (SGE) to prepare and lodge general purposes financial statements (GPFS) with the Australian Securities and Investments Commission (ASIC).

Under the new tax laws, unless approved by ASIC, any SGE who does not already lodge GPFS, must prepare them and provide them to the Commissioner. This means that the special purpose financial statements that an SGE currently prepares will not be enough to satisfy the new requirements.

Once the Commissioner receives the GPFS from the SGE, he will then give a copy to ASIC and it will appear on ASIC’s register and will be available to the public.

The ATO consider it best practice to have your GPFS audited, although the tax law does not require this. However, the ATO recommends at a minimum you keep evidence to demonstrate your GPFS has been prepared in accordance with accounting standards.

These rules apply for each income year starting on or after 1 July 2016. As such, it is essential that SGEs let their auditors know that the reporting requirements are different this year.

If you would like more information about your obligations in relation to lodging GPFS, please contact Rachel Law.

Hall & Wilcox - Tax briefing

Our final Tax briefing for 2017 is coming soon and we would be delighted if you would join us. We are very fortunate to be joined by two speakers from the ATO who will share in their industry knowledge. The session will cover various topics including the current tax dispute environment and insights into dispute focus areas, the ‘non-resident' CGT withholding regime, international tax traps and State Tax updates.

The update will be held in both Sydney and Melbourne and the dates are as follows:



Session 1 - Tuesday 31 October 2017

Session 2 - Wednesday 1 November 2017



Session 1 - Wednesday 15 November 2017

Session 2 - Thursday 16 November 2017


Michael Parker

Michael is a tax lawyer who specialises in tax disputes, capital gains tax, business sales and acquisitions and restructuring.

Lucy Wilcox

Lucy is an experienced project and construction lawyer.

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