Trade Queensland has been unable to explain why former Queensland premier Peter Beattie’s salary as the state’s Trade Commissioner to the Americas is tax exempt, while a tax consultant has told Crikey that the Queensland agency should be investigated.
As part of his three-year government appointment, Mr Beattie will be paid an annual tax-free salary of $171,091, plus a $35,585 living allowance.
Other perks that come with the LA-based position include a car, accommodation and credit card, with all expenses to be picked up by Queensland taxpayers.
Crikey first contacted Trade Queensland about the tax exemption on April 18. Several phone calls to the agency since then have failed to shed any light on the matter.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Trade Queensland director of trade services, David Hardy, said he did not know the provision that allowed Mr Beattie’s salary to be tax exempt.
“For all of our commissioners we go through a review with an external tax consulting firm…they do an individual assessment,” Mr Hardy said. “The information is still being sought in relation to Mr Beattie’s contract.”
The Australian Taxation Office would not comment on whether the wages, salary or other remuneration of Trade Commissioners and Special Representatives working for the Queensland Government are tax exempt in Australia.
“Under section 16 of the Income Tax Assessment Act the Tax Office is unable to discuss individual taxpayer matters with anyone other than the taxpayer or their adviser,” a spokesperson said.
Chris Seage, a former tax office audit manager, said that under the Australia-United States Tax Treaty, Australian government officials were exempt from paying tax in the US.
“Under Article 19 of the treaty an Australian government official such as Beattie working in the US will not be taxed there so as to avoid the situation of double taxation. Therefore those people will pay tax in Australia,” Mr Seage said.
“Beattie’s salary has all the hallmarks of an employee with the provision of accommodation, a corporate credit card, a car and he has one paymaster, that being the Queensland Government. Any suggestion that Beattie or the other trade commissioners are not being taxed should be immediately investigated by the Australian Taxation Office.”
Mr Seage also said Trade Queensland could be liable for millions of dollars in back tax and penalties for failing to tax the salary of Mr Beattie and the other Commissioners and Special Representatives it employs.
Trade Queensland has 13 trade offices in overseas countries including the United Kingdom, China, Japan and the United Arab Emirates. Mr Hardy was unable to say whether other Trade Queensland employees based overseas are on tax-free salary packages.
“Tax Chief Michael D’Ascenzo should act quickly to ensure the politically-charged nature of the investigation is conducted professionally,” Mr Seage said.
Crikey contacted the office of Queensland Premier Anna Bligh but did not receive a response by the time of deadline.
Mr Beattie started his new appointment on June 1.