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This declaration is used to notify us of the liable party in relation to a chain of on-hire. Refer to Revenue Ruling PTA-027 for more information.

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Explanatory notes

1. Anti-avoidance

Under the anti-avoidance provisions in section 42 of the Payroll Tax Act 2007 (the Act), the Commissioner of State Revenue may impose a payroll tax liability on any party to the employment agency arrangement if this declaration is incorrectly made.

2. Chain of on-hire

A ‘chain of on-hire’ occurs when an employment agent on-hires a worker to another employment agent who in turn on-hires the service provider to its client.

3. Division 8 of Part 3

Division 8 of Part 3 of the Act imposes payroll tax on wages paid by employment agents to staff on-hired under employment agency contracts.

4. Employment agency contract

An employment agency contract is a contract under which a person (employment agent) procures the services of another person (service provider) for a client of the employment agent. Such a contract could be formal or informal and could be expressly made or implied.

5. Record keeping

This declaration must be kept by Agent 1 for 5 years. Agent 1 must ensure that this declaration can be readily produced upon request by the State Revenue Office.

6. Who is liable?

Revenue Ruling PTA-027 states that where there is a chain of on-hire, the employment agent (Agent 2) closest to the ultimate end user of the service provider is liable for payroll tax on the payment(s) made to Agent 1.

Last modified: 11 December 2023
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