Decision impact statement

Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v Commissioner of Taxation

Venue: Federal Court of Australia
Venue Reference No: VID 541 of 2012
Judge Name: Kenny, Perram and Robertson JJ
Judgment date: 14 November 2013
Appeals on foot: No
Decision Outcome: Favourable to the Commissioner

Impacted Advice

Relevant Rulings/Determinations:

• Not applicable

Subject References:
constitutional law
superannuation contributions surcharge
superannuation contributions tax
commonwealth taxation powers
superannuation provider - defined benefits

Précis

Outlines the ATO's response to this case which concerns whether the superannuation contributions tax was constitutionally valid in its application to the trustee of a superannuation fund whose members are, or were, members of state parliament.

Brief summary of facts

The taxpayer was the trustee of a defined benefits superannuation fund, whose members are or were members of the Victorian Parliament.

During the relevant period, the taxpayer reported and was assessed in relation to surchargeable contributions for its members.

The taxpayer lodged an objection against those assessments, submitting that the Commonwealth legislation [Superannuation Contributions Tax Imposition Act 1997 and Superannuation Contributions Tax (Assessment and Collection) Act 1997 (collectively referred to a the "Surcharge Acts")] was invalid because it impaired, in a significant manner, the capacity of the State of Victoria to exercise its powers with respect to the remuneration of the members of its Parliament contrary to the requirements articulated by the High Court in Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272 and Austin v The Commonwealth (2003) 215 CLR 185.

The Commissioner disallowed the objection.

At first instance, in Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v Federal Commissioner of Taxation (2012) 203 FCR 146; [2012] FCA 740, the Federal Court (Jessup J) dismissed the taxpayer's appeal.

Subsequently, the taxpayer appealed to the Full Court.

Issues decided by the court

The Full Court, in unanimously dismissing the taxpayer's appeal, determined that:

•

The Surcharge Acts were valid in their application to the taxpayer.

•

The Surcharge Acts imposed a tax of general application. There was nothing discriminatory in the surcharge legislation and nothing which restricts or burdens the state in the exercise of its constitutional powers.

ATO view of Decision

The decision accords with the ATO view.

Administrative Treatment

Implications for ATO precedential documents (Public Rulings & Determinations etc)

Not applicable

Implications on Law Administration Practice Statements

Not applicable

Court citation:
[2013] FCAFC 127
(2013) 305 ALR 397
(2013) 216 FCR 329
(2013) 96 ATR 334

Legislative References:
Australian Constitution


Superannuation Contributions Tax Imposition Act 1997 (Cth)
The Act

Superannuation Contributions Tax (Assessment and Collection) Act 1997 (Cth)
The Act

Case References:
Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v Commissioner of Taxation
(2012) 203 FCR 146

Austin v The Commonwealth
[2003] HCA 3
2003 ATC 4042
51 ATR 654
(2003) 215 CLR 185

Clarke v Federal Commissioner of Taxation
[2009] HCA 33
72 ATR 868
(2009) 240 CLR 272

Melbourne Corporation v The Commonwealth
[1947] HCA 26
(1947) 74 CLR 31

The State of Victoria v The Commonwealth
[1971] HCA 16
2 ATR 249
(1971) 122 CLR 353