A person has a controlling interest where: 

• ​any director of the corporation is entitled to exercise a majority in voting power at meetings of directors; 
  

• a director is accu​stomed or under an obligation (formal or informal) to act in accordance with the instructions of that person or those persons acting together; or 
  

• ​that person or those persons exercise, control or substantially influence the exercise of more than  50 per cent of the voting power of the voting shares issued by the corporation. ​

A person/group of people has a controlling interest where that person or group of people: 

• ​controls or substantially influences the exercise or more than 50 per cent of the capital of the partnership; or 
  
• is entitled to more than 50 per cent of the profits of the partnership.
  

• ​a person (whether or not as a trustee of a trust) is the sole owner of the business; or 
  
• two or more trustees of a trust have a controlling interest in a business of which they are the owners.​
  

If a member of a group fails to pay any amount of payroll tax in respect to any period, every other member of that group is jointly and severally liable to pay any outstanding tax (section 81 of the Payroll Tax Act 2008).

• direct interest
  

an entity has a direct interest in a corporation if it can directly or indirectly exercise the voting power attached to the voting shares in the corporation. An entity has a controlling interest in a corporation where the value of that direct interest exceeds 50​ per cent;

• indirect interest ​
  

an entity holds an indirect interest in a corporation if the entity has a direct interest in another corporation and that second corporation holds a direct interest in the first corporation. For example, corporation ‘A’ holds a direct interest in corporation ‘B’ and in turn ‘B’ holds a direct interest in corporation ‘C’. Corporation ‘A’ therefore holds an indirect interest in corporation ‘C’. An entity has a controlling interest in a corporation where the value of that indirect interest exceeds 50 per cent;

• aggregate interest

an aggregate interest exists if an entity has a direct and an indirect interest, or two or more indirect interests. The aggregate interest is the sum of the entities direct and indirect interests in the corporation. An entity has a controlling interest in a corporation where the value of that indirect interest exceeds 50 per cent. 

​ A set of associated persons may include direct family members and corporations in which that family has a major shareholding.  ​

 Example: 

 Mr Smith has a controlling interest in Able Pty Ltd of 80%

 Mr Smith has a direct interest in Charlie Pty Ltd of 50%

 Mr Smith has an indirect interest in Charlie Pty Ltd of 80% x 40% x 50% = 16%

 Mr Smith has an aggregate interest in Charlie Pty Ltd of 50% + 16% = 66%

 Mr Smith has a controlling interest in both Able Pty Ltd and Charlie Pty Ltd.
 
 See diagram and explanation below. 

If two or more shareholders are involved they must be associated persons as defined in section 73(4) of the Payroll Tax Act 2008 in order to use tracing interest provisions.

​If, in the example above, the shareholdings were held by two brothers, grouping would be established. If the shareholding wa​s held by two persons who are not associated, such as a grandfather and ​granddaughter, the tracing interest provisions would not apply (the related person definition does not extend to  grandparent/grandchild).

​ An entity and a corporation form part of a group if the entity has a controlling interest in the corporation. ​​