Key highlights of the Qld State Budget

Payroll Tax Relief and Rise

The Payroll tax threshold will rise from $1.1 Million to $1.3 Million from 1 July 2019.  However, the rate of payroll tax will increase for employers with taxable wages above $6.5 Million.  The rate will increase from 4.75% to 4.95%. 

Regional employers are the real winners.  The overall rate of payroll tax will be reduced by 1% for any employer whose principal place of employment is regional Queensland and who pays at least 85% of taxable wages to workers employed in regional Queensland.  Regional Queensland is a defined term and is designed to apply to employers outside of the South East corner of Queensland (ie Brisbane, Gold and Sunshine Coast excluded).  The discount will apply from 1 July 2019 to 30 June 2023.  Regional employers with headquarters in Brisbane may wish to consider their structure to take advantage of this reduction.

The payroll tax rebate for wages paid to apprentices and trainees will be extended by a further 2 years until 30 June 2021.

Land Tax Rate Rise

The land tax absentee surcharge will be increased from 1.5% to 2%, from 1 July 2019.   However, the definition of absentee is amended  to ensure that, from the 2019-20 financial year onwards, Australian citizens and permanent residents who hold permanent visas are assessed as resident individuals and not absentees for land tax, even if they live overseas.   From 1 July 2019 the absentee surcharge (2%) will also apply to foreign companies and trustees of foreign trusts.  Land Tax rates will be increased for companies and trustees with aggregated landholdings above $5m by 0.25% points to 2.25%.  This brings the top tax rate for land holdings above $10 Million to 4.75%. 

Petroleum Royalty Rate Increase

The Petroleum and Gas Regulation is amended to increase the petroleum royalty rate to 12.5% of the wellhead value of petroleum from 1 July 2019, with a transitional petroleum royalty rate of 11.25% applying under the Petroleum and Gas Act for the annual return period ending 31 December 2019. Amendments to the Petroleum and Gas Act are also made to support the royalty rate increase and clarify the operation of provisions.

Crackdown on non-compliance

Additional funding has been provided to the Office of State Revenue to improve the compliance with various State taxes including payroll tax, land tax, duties and royalties.

Grant Funding Increase

On the positive side, the Government is continuing to try to attract business and jobs to Queensland with increases in funding to various State Government Grants including Advance Queensland, Biofutures initiative; Made in Queensland program and jobs and regional growth fund.

Should you have any questions, please do not hesitate to contact your usual Mazars advisor or alternatively our Qld tax partner, Jamie Towers on +61 7 3218 3900. 

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.