| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1013100666112
Date of advice: 7 October 2016
Ruling
Subject: Deductibility of Employer Superannuation Contribution
Question 1
Is the employer entitled to a deduction in the 20XX-YY income year under section 290-60 of the Income Tax Assessment Act 1997 (ITAA 1997) for a superannuation contribution which was intended to be made prior to 30 June 20YY?
Answer
No.
This ruling applies for the following periods:
Income year ended 20YY
The scheme commences on:
1 July 20XX.
Relevant facts and circumstances
1. The Taxpayer is an Australian company.
2. In 20XX, a payment (the Contribution), which was intended to be made into an employee's (the Employee) superannuation fund, failed to process.
3. The relevant employee of the Taxpayer was unavailable at the time and was unaware that the transaction had failed. Consequently, no action could be taken to rectify the situation.
4. In 20YY, the Contribution was successfully deposited into the superannuation fund.
5. The Contribution was intended to be made in the 20XX-YY income year.
6. The conditions in sections 290-70, 290-75 and 290-80 have been satisfied.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 290-60.
Income Tax Assessment Act 1997 section 290-60(2).
Income Tax Assessment Act 1997 section 29-60(3).
Income Tax Assessment Act 1997 section 290-70.
Income Tax Assessment Act 1997 section 290-75.
Income Tax Assessment Act 1997 section 290-80.
Reasons for decision
Summary
1. The Taxpayer cannot claim a deduction in the 20XX-YY income year for the Contribution made to the employee's superannuation fund as the Contribution was made in the 20YY-ZZ income year.
2. Further, it should be noted that there is no provision which enables the Commissioner to exercise his discretion to allow a contribution made to a superannuation fund in a particular year to be claimed as a deduction in another income year. Nor is there any discretion provided to allow the contribution to be reallocated to another income year.
Detailed reasoning
3. Section 290-60 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that an employer may deduct a contribution made to a superannuation fund for the purposes of providing superannuation benefits for another person who is their employee when the contribution is made, provided that certain conditions are met.
4. Subsection 290-60(2) of the ITAA 1997 requires that, in order for a contribution to be deductible, the conditions in section 290-70, 290-75 and 290-80 must also be satisfied.
5. Subsection 290-60(3) of the ITAA 1997 further provides that an employer may only deduction a contribution for the income year in which a contribution is made.
When a contribution is deemed to have been made
6. Taxation Ruling TR 2010/1 Income Tax: superannuation contributions sets out the Commissioner's view on the timing of superannuation contributions and when a contribution is made.
7. Specifically, where a contribution is made by way of an electronic transfer of funds to a superannuation provider, a contribution is made when the superannuation fund receives the funds.
8. The Taxpayer made the Contribution to the Employee's superannuation fund in 20YY. Accordingly, the contribution was made in the 20YY-ZZ income year.
9. Although the Taxpayer intended to make the Contribution in the 20XX-YY income year, and in fact took steps to do so, a deduction cannot be made for the 20XX-YY income year because the Contribution was not made in that year.
10. No section of the ITAA 1997, or of the Taxation Administration Act 1953, gives the Commissioner the discretion to allow a deduction for a superannuation contribution in an income year other than the year in which the contribution was made.
11. Accordingly, the Taxpayer is unable to claim a deduction for the Contribution made to the Employee's superannuation fund for the 20XX-YY income year as the Contribution was in fact made in the 20YY-ZZ income year. A deduction for the Contribution made can only be claimed in the 20YY-ZZ income year.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
