Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-42 - PERSONAL SERVICES INCOME  

Division 86 - Alienation of personal services income  

Subdivision 86-B - Entitlement to deductions  

SECTION 86-75   Superannuation  

86-75(1)    
Section 86-60 does not stop a * personal services entity deducting a contribution the entity makes to a fund or an * RSA for the purpose of making provision for * superannuation benefits payable for an individual whose * personal services income is included in the entity ' s * ordinary income or * statutory income.

For deductions for superannuation contributions: see Subdivision AA of Division 3 of Part III of the Income Tax Assessment Act 1936 .

86-75(2)    

However, if:

(a) the individual performs less than 20 % (by * market value) of the entity ' s principal work; and

(b) the individual is an * associate of another individual whose * personal services income is included in the entity ' s * ordinary income or * statutory income;

the entity ' s deduction cannot exceed the amount it would have to contribute, for the benefit of the individual, to a * complying superannuation fund or an * RSA in order to ensure that it did not have any * individual superannuation guarantee shortfalls in respect of the individual for any of the * quarters in the income year.

86-75(3)    
To work out the amount the entity would have to contribute for the purposes of subsection (2), the individual ' s salary or wages, for the purposes of the Superannuation Guarantee (Administration) Act 1992 , are taken to be the amount that section 86-60 does not prevent the entity deducting for salary or wages it paid to the individual.

Note:

Section 86-60 will apply the limitations under sections 85-10 and 85-20 on an individual ' s entitlement to deductions (but see paragraph 85-10(2)(e) on employment of associates).