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.
What is ex gratia relief?
Guidelines for ex gratia relief
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, ARBN or ASX listing and public details from other Australian regulators, prospectus documents, minutes of meetings, corporate memoranda, payroll data, contracts, quotes or invoices with Australian contractors and suppliers.
Examples of evidence may include a copy of FIRB approvals or correspondence from FIRB concerning FIRB compliance by the foreign entity, or a copy of an application lodged with FIRB (if an application for ex gratia relief is made prior to FIRB approval). 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. If the acquisition of land did not require FIRB approval, this evidence will not be required.
The following are examples of information that may be taken into account for the purposes of this condition:
• information sourced from the ASX or other stock exchange on the foreign entity
• Australian Securities & Investments Commission’s information on the foreign entity.
However, the exercise of a foreign entity’s legal rights would not be a factor weighed against eligibility.
Where a foreign entity owns a substantial amount of land (in terms of size or value of landholdings) but carries on a modest commercial activity, this factor will weigh against the foreign entity being considered to make a significant contribution.
A foreign entity that employs 75 or more full-time equivalent employees (not labour hire or contractors) in Queensland would generally be considered to make a significant contribution.
A foreign entity that demonstrates expenditure in Queensland of more than $20 million annually, comprising Queensland payroll tax and land tax liabilities, expenditure on Queensland goods and services, and wages paid to Queensland residents, would generally be considered to make a significant contribution.
A foreign entity that undertakes development or redevelopment of 50 or more residential lots in Queensland within a 12-month period would generally be considered to make a significant contribution.
In addition to considering the extent of the development activities undertaken by the foreign entity, consideration will be given to whether development activities are being undertaken on land that is in a priority development area declared in accordance with the Economic Development Act 2012, or part of a coordinated project declared by the Coordinator-General under the State Development and Public Works Organisation Act 1971.
Where a foreign entity owns land and the commercial activities on the land are undertaken by a wholly-owned subsidiary of the same parent entity, these commercial activities may be taken into account in considering whether the foreign entity makes a significant contribution.
A residential subdivision of less than 50 lots in regional Queensland may make a significant impact where that development makes a contribution to housing stock and infrastructure that is significant to a local community in the context of the population size, demographics and activity in that region.
A commercial activity in regional Queensland through which a foreign entity employs fewer than 75 people may make a significant impact where that entity is the major employer in the region, or whether the industry or activity might not exist in the absence of the foreign entity.
The above factors and examples focus on an entity’s current commercial activities (e.g. current number of local workers engaged, and current amount expended on local resources) in considering whether the entity makes a significant contribution. If an entity’s current commercial activities do not make a significant contribution on the date liability for land tax arises (liability date), the entity’s committed future commercial activities (having regard to the above factors) over a 12-month period from the liability date may be considered in determining whether the entity makes a significant contribution. Evidence of committed future commercial activities may include executed contracts and agreements, the granting of regulatory approvals (e.g. environmental approvals, development approvals, licences and permits), business plans, recruitment plans, and capital raised.
A manufacturing entity seeks ex gratia relief from the foreign surcharge from the 2020–21 land tax year onwards. Liability for land tax for the 2020–21 year arises on 30 June 2020. The entity cannot demonstrate that as at 30 June 2020 its commercial activities make a significant contribution, because the entity only engages 20 local workers and expends $12 million annually on local resources. However, the entity has secured a long-term supply contract and has committed to expand its manufacturing business to fulfil the supply contract. The committed future commercial activities will, during the 2020–21 land tax year alone, result in the entity engaging more than 80 local workers and expending more than $30 million on local resources. The entity may be considered to make a significant contribution based on the committed future commercial activities.
The examples provided above are indicative examples only. Whether a foreign entity makes a significant contribution is considered on a case-by-case basis.
Application for ex gratia relief
Confirmation and notification requirements
Streamlined process for applying for ex gratia relief from additional foreign acquirer duty (AFAD)
Commissioner of State Revenue
Date of issue: 3 July 2020
|Public Ruling||Issued||Dates of effect|
|LTA000.4.1||3 July 2020||3 July 2020||Current|