SMSF News - edition 19

Remitting excess contributions tax release authority penalties

We have released a new practice statement, PS LA 2011/24, which provides guidelines for remitting administrative penalties where an individual or super provider does not comply with their excess contributions tax (ECT) release authority obligations.

We impose penalties to:

• ensure the intent of the ECT policy is met
• encourage the prompt withdrawal of excess non-concessional contributions tax from the super system
• ensure that no more than the ECT amount is removed from the super fund.

We will consider each case individually before deciding whether we should remit any part of the penalty. If we find the individual or super provider has made a genuine attempt to comply with their obligations, we may remit the penalty in full. However, if we find they have made little or no attempt to meet their obligations, we will not remit the penalty at all.

The practice statement provides examples that show what we will consider when working out whether to impose and remit these penalties.