Just Announced: Payroll Tax Amnesty for Dental Clinics!

DATE PUBLISHED: October 11, 2024

key takeaways

The Queensland Revenue Office (QRO) has announced a payroll tax amnesty for dental clinics.
Dental clinics will have until 30 June 2025, to review their arrangements, register for payroll tax and make a voluntary disclosure to be eligible for the payroll tax amnesty.
Dental clinics and their advisors evaluate their contractor arrangements to optimise business structures and maximise the benefits available under the amnesty.

Payroll Tax Amnesty For Dental Clinics

On 3 October 2024, the Queensland Revenue Office (QRO) published the Commissioner’s Guidelines for administration of the temporary payroll tax amnesty. This applies to payments made to dentists under the relevant contract provisions, similar to those arrangements in place for medical centres. An Administrative Arrangement has been issued, providing further details of this temporary relief centres).

The amnesty enables dental clinics that are not fully compliant to effectively “pause” their payroll tax obligations for payments made to contracted dental practitioners between 1 July 2018 to 30 June 2025. For clinics currently under audit, the amnesty period may be adjusted.

Eligibility Requirements

To be eligible for the amnesty, a dental clinic must:

be a “designated dental clinic”;
make a voluntary disclosure and, if not already registered for payroll tax, register for payroll tax in Queensland by 30 June 2025; and
comply with its ongoing payroll tax obligations after making the voluntary disclosure, this includes from 1 July 2025.

A “designated dental clinic” for payroll tax purposes is an employer that conducts a “medical centre business” and one of the following applies:

meets the criteria for registration under section 52 of the Payroll Tax Act 1971 but is not registered for payroll tax in Queensland and makes payments to contracted dentists;
is registered for payroll tax in Queensland but is not declaring payments to contracted dentists for payroll tax;
is or was subject to audit activity (that has not been finalised) in relation to its payments to contracted dentists; or
has been assessed on payments to contracted dentists as a result of audit activity.

The dental practitioner must also be registered with the Dental Board of Australia.

How to Access Amnesty

The voluntary disclosure must provide the QRO with the necessary information to assess eligibility for the amnesty and determine payroll tax obligations. Clinics can make the disclosure by completing the standard RS2.5 and RS1.6 forms, ensuring the exemption claimed is marked as “dentist amnesty”. Documentation, including proof of registration with the Dental Board of Australia for each dental practitioner, is required.

The amnesty is not available to any dental clinic that commenced operations on or after 10 February 2023.

Benefits of Participation

Eligible dental clinics will not need to pay payroll tax on payments to contracted dental practitioners during the amnesty period, provided the practitioners are registered with the Dental Practitioner Board of Australia.

The amnesty provides an opportunity for dental clinics to restructure their arrangements to comply with the relevant contract provisions, either by paying the necessary payroll tax or reorganising their business structure.

The amnesty also applies to the calculation of a dental clinic’s liability for the mental health levy until 30 June 2025.

Next Steps for Dental Clinics

We strongly recommend that dental clinics review their current arrangements and assess eligibility for the amnesty as soon as possible. This will allow sufficient time to make the necessary disclosures before the 30 June 2025 deadline.

Dental clinics that are eligible but choose not to participate remain at risk of being liable for unpaid payroll tax for periods prior to 1 July 2025 (and we are seeing audit and review activity in this space).

How we can help you?

Kimberley Barnes and Taryn Hartley from our Taxation and Private Advisory Team can assist in assessing current arrangements, accessing the payroll tax amnesty, and restructuring existing “relevant contract” arrangements, as needed. We can also provide support with any other payroll tax needs.