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Edited version of your written advice
Authorisation Number: 1051190914534
Date of Advice: 28 March 2017
Ruling
Subject: Deductible employer contributions
Question
Is a private company (the Taxpayer) entitled to claim a tax deduction in the 2015-16 income year under section 290-60 of the Income Tax Assessment Act 1997 (ITAA 1997) for a superannuation contribution that was received by the superannuation fund on 1 July 2016?
Answer
No.
This ruling applies for the following periods:
Income year ended 30 June 2016.
The scheme commences on:
1 July 2015
Relevant facts and circumstances
On 30 June 2016, the Taxpayer made, by electronic transfer, a superannuation contribution (the Contribution) to the Fund on behalf of its working director (the Employee).
The Contribution amount was credited to the Fund's account on 1 July 2016.
The Fund is a complying superannuation fund.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 290-60
Income Tax Assessment Act 1997 Subsection 290-60(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
For the purposes of section 290-60 of the ITAA 1997, the Contribution made by the Taxpayer to the Fund on 30 June 2016 is treated as having been made on 1 July 2016 when it was credited to the Fund's account. That is, in the 2016-17 income year.
Therefore, the Taxpayer is not entitled to claim a tax deduction in respect of the Contribution in the 2015-16 income year.
Detailed reasoning
Under section 290-60 of the ITAA 1997, an employer is entitled to claim a deduction for a contribution to a complying superannuation fund for the purpose of providing superannuation benefits for a person who is the employer's employee if the conditions in sections 290-70, 290-75 and 290-80 of the ITAA 1997 are also satisfied.
However, subsection 290-60(3) of the ITAA 1997 states that the deduction can only be claimed in respect of the income year in which the employer made the relevant superannuation contribution.
The Commissioner of Taxation (the Commissioner) has provided guidance on when a contribution is considered to be made to a superannuation fund in Taxation Ruling TR 2010/1 Income tax: superannuation contributions (TR 2010/1). Relevantly, the table in paragraph 13 of TR 2010/1 states:
No. |
If the funds are transferred by ... |
A contribution is made when ... |
2 |
An electronic transfer of funds to the superannuation provider |
The funds are credited to the superannuation provider's account. |
Based on the above, the Contribution was made by the Taxpayer on 1 July 2016 when it was credited to the Fund's account. That is, in the 2016-17 income year.
There is no discretion under Division 290 of the ITAA 1997 to allow the Commissioner to treat the contribution as having been received by the Fund in the 2015-16 income year.
Consequently, in accordance with subsection 290-60(3) of the ITAA 1997, the Taxpayer is not entitled to claim a tax deduction for the Contribution in the 2015-16 income year because the Contribution was not made in that year income year.