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These proceedings related to three payroll tax assessments issued to the taxpayer for the 2016 to 2018 financial years. The Commissioner had assessed the taxpayer as part of a group for this period with another company. Both companies operated hair dressing salons under the same name, albeit from different locations.

At all relevant times, one man was the sole director and shareholder of the taxpayer. He was also the second company’s:

  • sole director from its incorporation until February 2017, and
  • sole shareholder from its incorporation until June 2019.

Further, the taxpayer’s representative conceded in closing submissions that the entities were “family companies” run by the director of the taxpayer and his wife.

The taxpayer objected to the assessments on the grounds that the companies should not be grouped and, alternatively, that the Commissioner should exercise his discretion to de-group.


On 27 May 2021, the Tribunal delivered its decision in favour of the Commissioner, confirming the assessments on the basis that the two companies constituted a group under section 72 of the Payroll Tax Act 2007. The Tribunal noted the lack of supporting evidence led by the taxpayer and accepted the accuracy of the information about the shareholders as recorded by ASIC. 

The Tribunal also declined to exercise the discretion under section 79 to de-group the two companies. The Tribunal held that all the documentary evidence pointed to director of the taxpayer being in charge of both businesses, notwithstanding that they were owned by different companies.  In those circumstances, Member Tang was not satisfied that the two businesses were carried on independently and were not connected.

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