We use a number of compliance strategies within each of the tax, royalty and benefit schemes we administer. We aim to complete our audits and investigations with the highest possible standards of integrity and least inconvenience to our clients. Our Investigation Process brochure provides clients with information about the audit and investigation process, their rights and obligations and avenues of appeal if they are dissatisfied with an assessment of liability.
- Payroll tax
- First Home Owner Grant
- Mineral and petroleum royalties
Our duties compliance program focuses on individual transactions and Conveyance By Return (CBR) clients who assess documents. Initiatives to ensure duties compliance may include:
- identifying transactions liable for landholder duty
- auditing CBR clients to ensure the accuracy of assessments and that their systems and procedures adhere to our directions
- identifying transactions where duty has not been paid or underpaid
- reviewing high value property transfers
- identifying and investigating transactions where the correct value has not been used to calculate duty payable
- reviewing and investigating sale of business transactions where third party information indicates that the correct duty has not been paid
- reviewing entitlement to exemptions and concessions, including corporate reconstructions.
Payroll tax compliance activities focus on identifying and contacting liable employers who have failed to register with us for payroll tax purposes and auditing registered clients who appear to have understated their wages. Initiatives to ensure payroll tax compliance may include:
- contacting unregistered employers where information available to us suggests they are liable for payroll tax
- investigating businesses where information available to us indicates taxable wages have been understated
- identifying and contacting employer groups that are claiming the benefit of multiple thresholds by failing to declare they belong to a group for payroll tax purposes
- reviewing high value refund requests
- contacting and reviewing employers who fail to declare payments to contractors that are liable for payroll tax
- following up employers who fail to lodge their monthly and/or annual returns on time.
Common errors for payroll tax include:
- failing to register when total liable wages exceed the Northern Territory threshold
- failing to include all liable wages in the total wages calculation, including superannuation and taxable fringe benefits
- incorrectly classifying employees as independent contractors - in certain cases 'contractors' may be considered to be 'employees' under the Act
- incorrectly listing group status, including failing to register a related entity such as:
- holding subsidiary relationships (mandatory grouping)
- common control relationships (common shareholders/directors/beneficiaries or any combination of these)
- common use of employees
- failing to declare interstate wages
- incorrectly claiming an exemption for certain wages.
First Home Owner Grant
Compliance activities ensure first home buyers benefiting from the First Home Owner Grant (FHOG) scheme satisfy the eligibility criteria. All first home buyers who receive the FHOG are matched against information held by third parties and may be requested to verify that they have met the eligibility criteria, including the residence requirement. Applicants who are not eligible for the FHOG are required to repay the grant back to us, which may include penalty and/or interest. FHOG applicants who provide false or misleading statements may be prosecuted.
Initiatives to ensure first home benefits compliance may include:
- identifying and investigating applicants who fail to meet the residence requirements
- verifying information provided by clients against third party data to identify undeclared spouses, prior ownership, understated duty amounts and inconsistencies between property transfers and FHOG applications
- investigating anonymous disclosures reported to the Territory Revenue Office.
Common errors for the FHOG include:
- applying for FHOG when purchasing an investment property that is to be leased
- failing to advise us when circumstances change and the applicant cannot meet the residence requirement timeframes
- incorrectly applying the residency requirements, for example:
- leaving the FHOG property vacant (not leased) for 6 months
- renovating the FHOG property while using another residence to cook, shower, sleep etc
- living in the FHOG property for a period of less than 6 months
- failing to disclose a de facto partner/spouse
- failing to disclose that the applicant, or their de facto partner/spouse has received a prior grant or had a prior relevant interest in residential property
- failing to disclose previous names, including previous married name(s)
- purchasing the FHOG property in a child’s name, with the consideration for the property paid by parents.
Mineral and petroleum royalties
The Northern Territory’s mineral and petroleum royalty regimes operate on the principle of voluntary compliance. Each royalty payer is responsible for paying the correct amount of royalties (including provisional royalties) imposed by the statutory or regulatory framework that governs the royalty regimes. We are responsible for administering and enforcing those regimes.
- ensure that all royalty payers pay the correct amount of royalties
- promote a level playing field for all Northern Territory mining, petroleum and other businesses or projects
- royalty payers to understand how royalties apply to their mining or petroleum business or project.
Any royalty payer - including major, national or junior companies and individual or small scale miners - could be audited. Royalty payers may be chosen for an audit based on a special audit project, legislated program, risk-based selection or referral from another tax or royalty audit. Royalty payers based outside the Northern Territory that conduct mining or petroleum production in the Northern Territory could also be audited. The Mineral Royalty Overview and NT Petroleum Royalty Overview specify the obligations of royalty payers and cover administrative details such as the reporting of royalty obligations and the conduct of audits.
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Last updated: 18 April 2018