ATO Interpretative Decision

ATO ID 2002/136 (Withdrawn)

Superannuation

• This ATO ID is superseded by Taxation Ruling TR 2005/24
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Are personal superannuation contributions made by the taxpayer deductible under section 82AAT (Income Tax Assessment Act 1936 (ITAA 1936))?

Decision

Yes. As an independent contractor, the taxpayer does not expect superannuation contributions to be made on their behalf, and is entitled to claim as a deduction the superannuation contributions made by the taxpayer personally.

Facts

The taxpayer provides accounting services to a number of associated companies. The taxpayer's income for the financial year comes solely from the companies. The companies do not provide the taxpayer with superannuation contributions, workers' compensation, sick leave or annual leave. The taxpayer is not required to attend work at specific times. The companies have no control over the taxpayer's performance of the work. The taxpayer invoices the companies and is paid on an hourly basis. The taxpayer does not have the right to employ, hire or subcontract others to assist with the work.

The taxpayer makes personal superannuation contributions into a complying private superannuation fund.

Reasons for Decision

Under subsection 82AAT(1) of the ITAA 1936, a person who has made contributions to a fund during a year of income is entitled to an allowable deduction for the contributions if, amongst other things, the person is an eligible person in relation to the year. Subsection 82AAS(2) of the ITAA 1936 states that a person is an eligible person in relation to a year of income unless it was reasonable to expect that superannuation benefits would be provided for the person.

The taxpayer is an independent contractor. Factors relevant to this conclusion are:

•

the companies do not provide the taxpayer with superannuation contributions, workers' compensation, sick leave or annual leave;

•

the taxpayer is not required to attend work at specified times, and

•

the companies have no control over the performance of the taxpayer's work.

As an independent contractor, the taxpayer does not expect superannuation contributions to be made on the taxpayer's behalf, and is entitled to claim as a deduction the superannuation contributions made by the taxpayer personally.

Legislative References:
Income Tax Assessment Act 1936
   section 82AAS
   subsection 82AAS(2)
   section 82AAT
   subsection 82AAT(1)

Case References:
Atlas Products (Vic) Pty Ltd
   94 CLR 419

Other References:
Previously released as CDS10251

Keywords
Deductions & expenses
Independent contractors v employees
Master/servant relationship issues
Superannuation contributions
Superannuation contributions by eligible persons

Business Line:  Superannuation

Date of publication:  8 February 2002

ISSN: 1445-2782