Payroll tax update
On Thursday 12 December, Queensland Health Minister David Janetzki wrote to AMA Queensland informing us that he is introducing the Revenue Legislation Amendment Bill 2024 into the Queensland Legislative Assembly.
The Bill contains amendments to the Payroll Tax Act 1971 that exempts all GPs from payroll tax - a result that AMA Queensland has been fighting for since 2021 when the interpretation of payroll tax changed without warning.
Next step - extending the exemption to all non-GP private specialists, in the same way all public and most private hospitals are exempt from payroll tax.
Background
Under existing tax laws, general practices have always paid payroll tax on their employees, including receptionists and nurses, but not for GPs because they work independently - essentially renting their workspace from the practice.
However, in 2020, a New South Wales tribunal ruled that independent practitioners were employees for payroll tax purposes. Under tax harmonisation arrangements between the states, in 2021 the Queensland Revenue Office began auditing general practices using the new interpretation of the law.
GPs began receiving unexpected bills, backdated five years. These bills were out of the blue and unbudgeted for, as GPs had been fully compliant with the law for decades. These practices were facing closure or passing the costs on to patients as a 'patient tax'.
An exemption is the clearest way to ensure patients do not bear the brunt of this new interpretation of tax law.