UNSW Global Pty Ltd v Chief Commissioner of State Revenue

In the matter of UNSW Global Pty Ltd v Chief Commissioner of State Revenue, the plaintiff, UNSW Global Pty Ltd, sought a review of a decision made by the Chief Commissioner of State Revenue regarding payroll tax. The plaintiff, which provided expert services in relation to litigation or business aspects for its clients, argued that the payments made to experts, who were classified as independent contractors, were not subject to payroll tax under sections 3C(2)(C) of the Pay-roll Tax Act 1971 and s 40 of the Payroll Tax Act 2007. The court was required to determine whether these payments constituted wages, which would be subject to payroll tax. This necessitated a consideration of whether the services provided by the experts fell within the scope of employment agency contracts as defined by the relevant legislation.

The court examined the nature of the services provided by the experts and their relationship with the plaintiff. It found that the services in question were provided for the benefit of the client, but not in the conduct of the client’s business. The experts were engaged to perform specific tasks that were not inherently part of the client’s business operations. The court concluded that these services did not fall within the scope of the employment agency provisions, as they were not provided by a service provider working in the client's business. Consequently, the payments made to the experts were not considered wages for payroll tax purposes.

Based on the above reasoning, the court set aside the Chief Commissioner's assessment notice that imposed payroll tax on UNSW Global Pty Ltd. The court held that the services provided by the experts were not subject to payroll tax as they did not fall within the definition of wages under the relevant legislation. The decision underscored the distinction between services provided in the conduct of a client's business and those provided for a client’s benefit but not in the conduct of their business. The court's judgment provided clarity on the application of payroll tax to payments made to independent contractors engaged by employment agencies.