Decision Impact Statement
IWEC Pty Ltd v Commissioner of Taxation
||This document has changed over time. View its history.
 AATA 1051
(2007) 94 ALD 247
2007 ATC 2073
65 ATR 447
Venue: Administrative Appeals Tribunal
Venue Reference No: NT2006/90 & 315
Judge Name: Hunt J.
Judgment date: 8 February 2007
Appeals on foot:
Administrative Treatment (Implication on current Public Rulings and Determinations)
Superannuation Guarantee Charge
contributions paid to fund late
one contribution paid to financial planner on time but not received by fund within time
absence of discretion to remit all or part of the Charge
decision varied and decision affirmed
This document is not a public ruling, but provides a statement of the Commissioner's position in relation to the decision and how the law will be administered as a consequence of the decision. Any proposals for changes in the law are matters for government and it is not appropriate for the Commissioner to comment.
The applicant (an employer) was negligent in making Superannuation Guarantee payments on 5 occasions. The applicant was as little as one day late, and as much as 5 days late. The applicant appealed against the imposition of Superannuation Guarantee Charge as well as the Part 7 penalties imposed
Brief Summary of Facts
The applicant (an employer) ran into financial difficulties, and was unable to make some Superannuation Guarantee Charge (SGC) payments on time. In the end, 5 payments were late, by a quantum varying from six months to 1 day.
The first payment in question was over 3 months late.
The next payment was over 6 months late.
The next payment was over 3 months late.
The next payment was one day late.
The final payment was not completed until 5 days after the due date, although part payments were received before the due date.
The applicant was audited in respect of these periods, and SGC and Part 7 penalties (10%) were imposed. The applicant lodged 2 objections (the first objection for 4 of these periods, the second objection for the remaining period).
On objection, the size and timing of the shortfalls were amended. The penalty for the payment that was one day late was remitted in full. The remaining penalties were remitted to 8%.
The applicant appealed to the AAT in respect of the SGC and the Part 7 penalties imposed.
Issues decided by the Court or Tribunal
The Tribunal noted (at para 22) that the Commissioner has no discretion to remit any or all of the SGC and so considered that it was bound to affirm the decision on that issue.
The Tribunal (at para 31) noted their agreement with the decision to remit in full the penalty on the payment made one day late.
The Tribunal then referred to the practice statement dealing with Part 7 penalties (PS LA 2006/1) and noted that the default penalty where the employer provided the information is 10%. It then referred to para 17 of the statement, which says that genuine attempts to comply as well as a high level of co-operation "may justify a higher level of remission". The Tribunal held that, on this basis, the 8% penalty for the payment made 5 days late should be remitted to zero and that for the remaining 3 periods the penalty should be reduced to 5%.
Tax Office view of Decision
This was a case on its facts. The AAT applied the Commissioner's practice statement and came to a different conclusion on the facts which it was entitled to do having also the benefit of oral submissions from the applicant.
Implications on current Public Rulings & Determinations
Implications on Law Administration Practice Statements
We invite you to advise us if you feel this decision has consequences we have not identified, or if a precedential decision such as a Public Ruling or an ATO ID requires reconsideration or amendment. Please forward your comments to the contact officer.
| Date Issued:
|| 28 May 2007
| Due Date:
|| 24 July 2007
| Contact officer:
|| Grahame Tanna
| Email address:
|| 02 9374 2674
|| 02 9374 2002
|| Level 6, 100 Market Place, Sydney NSW 2000
Superannuation Guarantee (Administration) Act 1992
Superannuation Guarantee Charge Act 1992
Superannuation Industry (Supervision) Act 1993
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