Commissioner of State Revenue v The Optical Superstore Pty Ltd

[2019] VSCA 197

Victorian Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Taxation and Revenue
2. › Payroll tax
3. › Contractor provisions
4. › Amounts paid or payable for or in relation to the performance of work
5. › Whether distributions to beneficiary under express trust constitute amounts 'paid or payable'
6. › Whether beneficial ownership of funds precludes characterisation as 'payment'
7. › Payroll Tax Act 2007 (Vic), s 35(1)
8. › Pay-roll Tax Act 1971 (Vic), s 3C(2)(c)
1. Statutory Interpretation
2. › Taxing statutes
3. › No special rules of construction for taxing statutes
4. › Whether deeming provisions to be construed strictly or broadly
5. › Whether anti-avoidance purpose warrants expansive construction
6. › Payroll Tax Act 2007 (Vic), ss 3, 13, 31-36
1. Trusts
2. › Express trusts
3. › Distribution to beneficiary
4. › Whether transfer of funds to beneficiary who is beneficial owner constitutes 'payment'
5. › Trustee's right of indemnity
6. › Whether right of indemnity limits beneficiary's beneficial interest in trust funds

Quick Take

Distributions from an express trust to a beneficiary who is the beneficial owner of the funds are 'amounts paid or payable' within the meaning of the payroll tax contractor provisions (s 35(1) Payroll Tax Act 2007 (Vic)). The beneficial ownership of funds by the recipient does not preclude characterisation as a 'payment'. Arrangements whereby contractors direct their fees to be held on trust by the principal and then returned to them will not avoid payroll tax liability under the contractor provisions merely because the funds are beneficially owned by the contractor throughout.