A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
Whether the foreign entity undertaking the relevant transaction is Australian-based. A non-exhaustive list of factors that may indicate a foreign entity is ‘Australian-based’ include:
The more of these factors that are established, the stronger the likelihood of establishing ‘Australian-based’. Examples of evidence to establish these criteria may include details of a current ACN, ABN, ABRN or ASX listing and public details from other Australian regulators, details of previous developments, prospectus documents, minutes of meetings, corporate memoranda, payroll data, contracts, quotes or invoices with Australian building and service suppliers.
(b) Foreign Investment Review Board requirements
Whether the foreign entity has complied with any Foreign Investment Review Board (FIRB) requirements in relation to the acquisition of the land. Factors that may also be taken into consideration include:
Examples of evidence may include a copy of FIRB approvals or correspondence from FIRB concerning FIRB compliance by the foreign acquirer; or, if prior to receipt of FIRB approval but post-application, a copy of the application lodged with FIRB. Where conditions apply to FIRB approval, evidence the conditions have been met, or a statement of how the conditions will be met, will also be required.
(c) Entity meets regulatory requirements
Whether the foreign entity meets regulatory requirements, including:
The following are examples of evidence that may be taken into account for the
purposes of this condition:
However, the exercise of a foreign entity’s legal rights would not be a factor weighed against eligibility.
(d) The development must be significant
This condition can be met by establishing either ‘significant development’ or ‘significant developer’ status. Significant development will be satisfied if:
(regional significance test).
Note that the regional significance test is not targeted at metropolitan areas, nor is it targeted at urban in-fill developments.
Significant developer status will be satisfied if the developer will undertake development or redevelopment of 50 or more residential lots in the relevant year. Relevant year is a 12-month period that includes the date of the relevant transaction. Averaging for up to 5 years will be permitted.
The development to which the relevant transaction relates will produce 20 lots. In another development, which concluded 5 months prior, another 10 lots were produced; and the developer has a development that will conclude within 7 months from the date of the relevant transaction, in which another 20 lots will be produced (totalling 50).
Taken on average over up to 5 years including the date of the relevant transaction (at the foreign acquirer’s election), and including the development the subject of the relevant transaction, the foreign acquirer has developed or re-developed 50 or more lots for residential purposes, per year (significant developer test).
For establishing the number of lots developed or redeveloped in any of the above contexts:
Evidence for the significant development or significant developer tests may include Titles Queensland evidence of lot creation, development approvals and project plans.
A ‘lot’, for the purpose of meeting these tests, is not limited to a lot within the meaning of the Land Title Act 1994.
The development of 50 independent living units (ILUs) in a retirement village on land held by a developer under a long-term lease—where the ILUs will be subleased to residents on completion—would be counted as 50 lots and eligible for relief, provided all other conditions were met.
In addition to the above, consideration will be given to whether the land is in a priority development area declared by the Governor in Council under a regulation, on the recommendation of the Minister for Economic Development Queensland under the Economic Development Act 2012, or part of a declared coordinated project declared by the Coordinator General under the State Development and Public Works Organisation Act 1971. However, this factor alone will not be determinative of whether a development or developer is significant.
Note that where significant developer status is established it applies to the transaction in relation to which it is established and may be relevant for future transactions. However, it will not result in any previous transactions being entitled to an ex gratia payment for the associated liability that arose on any of those transactions.
A foreign developer who is new to Queensland begins to grow from a small-scale developer. It produces 40 residential lots in 2017 from an acquisition after 1 October 2016 to which AFAD applied (the 2017 acquisition). No ex gratia relief was available on the 2017 acquisition. In 2018, the developer seeks ex gratia relief for 5 acquisitions of land that year, each of which it plans to use to produce 30 residential lots during 2018 and 2019. It establishes significant developer status based on an average of at least 50 residential lots produced or to be produced each year over the 3-year period (2017–2019). It meets all the other conditions for ex gratia relief on the 2018 acquisitions, and obtains relief for them. However, this does not mean it becomes entitled to relief from AFAD on the 2017 acquisition.
(e) Use of Australian goods, services and personnel
Whether the foreign entity primarily employs or contracts for services, materials of Australian building contractors and suppliers to engage in the development of land under the relevant transaction. In this context, ‘primarily’ means:
Acting Commissioner of State Revenue
Date of issue: 13 December 2022
|Public Ruling||Issued||Dates of effect|
|DA000.15.3||13 December 2022||1 January 2023||Current|
|DA000.15.2||8 September 2017||8 September 2017||31 December 2022|
|DA000.15.1||28 September 2016||1 October 2016||7 September 2017|