• Invalid tax file number (Section 299TB) notices

    When we send notices

    We will send an Invalid tax file number (TFN) (Section 299TB) notice to you if all the following occur:

    • you have submitted a member contribution statement (MCS) that contained member records with incorrect TFNs
    • we have issued you a 'please resolve' letter
    • 60 calendar days have passed since you received our letter and we still cannot find a TFN for a member.

    How we administer Invalid TFN (Section 299TB) notices

    What mailing address will you send Invalid TFN (Section 299TB) notices to?

    You will receive notices at your current postal address as advised on your most recent MCS lodgment, rather than the address reported on the original MCS you lodged for the member record. The notice will be addressed to your current contact officer.

    Your members will receive notices at the address reported for them on their last MCS.

    How many notices will we receive?

    You will receive one notice listing all members in your fund to whom the notice applies. Administrators will receive one notice for each fund administered.

    Will all members listed on our fund notice receive an Invalid TFN (Section 299TB) notice?

    Not necessarily. We will always attempt to serve a notice to the member; however, if the MCS does not report a valid address for the member then it may not be possible. Even if there is an address listed for the member, the notice may not necessarily be delivered - for example, when we have an invalid address for the member or the notice has been returned to us unclaimed. However, the member will still be included on the fund notice and the consequences of the notice still apply.

    Do we need to provide a copy of the Invalid TFN (Section 299TB) notice to members listed on the notice?

    No. We will separately write to the members if a valid address has been reported for the member.

    How many notices will a member receive?

    A member will receive a separate notice for each account in each fund that received an Invalid TFN (Section 299TB) notice

    For example, if one person belongs to three funds and each of these funds receive an Invalid TFN (Section 299TB) notice about the person, the person will receive three separate Invalid TFN (Section 299TB) notices. Similarly, if a member has two accounts in the same fund and the fund received an Invalid TFN (Section 299TB) notice for each account for them, the member will receive two separate Invalid TFN (Section 299TB) notices.

    Will you include a system code in the Invalid TFN (Section 299TB) notice?

    Yes. Based on your feedback, we are adding the system code reported on the MCS to the Invalid TFN (Section 299TB) notice (if a code was reported).

    A system code is a code for the system, superannuation product or other location within the administrative structure of a provider which holds the account of a member. Refer to Destination provider system code in the most recent version of the MCS ECI specification.

    Sending this data will help you to easily identify which of your systems you need to update in order to comply with the notice.

    What to do if you receive an Invalid TFN (Section 299TB) notice

    Do we need to take any action if we receive an Invalid TFN (Section 299TB) notice for a member who has exited or rolled over to another fund?

    In this situation, email us at SPR Fund Reporting Strategies

    Will we need to pay the no-TFN-quoted contributions tax arising from the Invalid TFN (Section 299TB) notice immediately?

    No. We expect most funds will elect to address any liability incurred for contributions made in the 2007–08 year onwards in their next income tax return.

    Alternatively, you can choose to amend your income tax returns for each of the years in which you received contributions.  

    What happens if we receive an Invalid TFN (Section 299TB) notice and we have previously included member contributions in our assessable income?

    You need to return member contributions to the member if they informed you that they claimed a deduction for those contributions. As the member contribution was previously included in your fund's assessable income, you can recover any no-TFN-quoted contributions tax paid for these amounts. For returns of contributions that relate to earlier income years, you may either reflect the amount in your next income tax return or amend previously lodged income tax returns to reduce the total contributions in the year in which the contributions were made.

    Where do we send contributions if a member made member contributions during their employment and they have now ceased that employment?

    You must return the amount to the entity or person that paid the amount, which, in this case, is the employer. If the employer is unable to locate the member after reasonable efforts, the employer should return the contributions to the fund.

    What if we are required to return member contributions and the member's only interest in the fund is an insurance-risk interest?

    The Australian Prudential Regulation Authority (APRA) administers these regulations, therefore we cannot provide specific advice on this topic. However, we note that sub-regulation 7.04(4)(b)(v) Superannuation Industry (Supervision) Regulations 1994 allows the fund to reduce amounts to be returned for risk-insurance interests by reasonable transaction and administration costs.

    How do we determine if a super government contribution should be returned?

    You cannot accept a government contribution for a member if you do not hold their TFN. If you do accept a government contribution payment for a member and then become aware that you do not have their TFN, you must return it to us within 30 days.

    The 30 day limit is a period of grace for you to remove the contributions from the super system without breaching the preservation or contribution rules. Whether you refuse to accept, or later decide to return, a government contribution you must always use Superannuation payment variation advice (NAT 8451).

    You may be required to return previous government contribution entitlements if, for a particular year, sufficient information is provided to us to match an individual's tax return with a member contributions statement, and consequently determine a government contribution entitlement.

    Then later, we receive further information that leads us to not be satisfied that the individual has a valid TFN. In this case you will receive an Invalid TFN (Section 299TB) notice, and must return all government contributions received for that member since 1 July 2007 to us within 30 days (unless you can be sure a particular co-contribution relates to a personal contribution made before 30 June 2007).

    Why do we need to lodge amended MCSs for impacted members for the affected years (back to 1 July 2007)?

    You need to lodge amended MCSs to ensure all prior year records are accurate.

    What if we can't comply with the notice by the next MCS lodgment?

    As a result of being issued with an Invalid TFN (Section 299TB) notice you must, within 30 days, amend each MCS lodged for the affected members for 2007–08 and later years.

    We prefer that all TFNs are deleted for members listed on the notices and member contributions returned if applicable. However, we understand that if these notices are distributed late it may make this difficult so if you are unable to comply before lodging your next year's MCS, you will still need to amend these details later on.

    If a member quotes a new TFN in the future, how do we claim back the additional tax?

    If you paid no-TFN-quoted contributions tax and, at a later stage, a member provides their TFN, you may be able to claim back the additional tax as a tax offset in your income tax return.

    You can claim the tax offset in the financial year that the member provides their TFN. You can make the claim if no-TFN-quoted contributions tax was payable in one of the three most recent income years ending before the current year.

    For example if a member provided their TFN to you on 15 January 2012 (that is in the 2011–12 year), you can claim an offset in the 2011–12 year if you paid no-TFN-quoted contributions tax in 2008–09, 2009–10 or the 2010–11 years.

    You can only claim the tax offset for no-TFN-quoted contributions tax you paid on no-TFN-quoted contributions income of an earlier year. You are not entitled to claim this offset if the no-TFN-quoted contributions income was earned by a different fund that was then either wound up or became part of the fund through a successor fund transfer.

    If you claim the offset, returned member contributions do not need to be re-contributed to the super fund.

    If a member's super has been transferred from the fund as a consequence of a successor fund transfer (for example, because of a merger), the same rules apply as when a member has otherwise exited or rolled over to another fund. The Invalid TFN (Section 299TB) notices are issued to the fund who last reported the member on their MCS (first fund), not the successor fund (second fund).

    There are two possible situations:

    1. If the members' benefits have been transferred to the second fund but the first fund still exists when you receive the Invalid TFN (Section 299TB) notice, email us at: SPR Fund Reporting Strategies
    2. If the successor fund transfer has been completed and the first fund does not exist when we issue the Invalid TFN (Section 299TB) notice the notice should be destroyed – we may have issued the notice because the first fund's tax affairs were still ongoing when the fund ceased operating, so our systems may treat the first fund as still in existence.

    In both situations, the incorrect TFN that the second fund has will generally be reported in the second fund's next MCS, and we will send an Invalid TFN (Section 299TB) notice to the second fund in the next round of notices.

    This advice is the same if the trustee of the first fund is also the trustee of the second fund. Each role (as trustee of the first fund and trustee of the second fund) is treated separately.

      Last modified: 28 Mar 2017QC 26421