ATO Interpretative Decision
ATO ID 2001/15 (Withdrawn)
Superannuation guarantee scheme: Penalties
FOI status: may be released
||This ATO ID is withdrawn as it does not accurately reflect the ATO view
||This document has changed over time. View its history.
Status of this decision: Decision Withdrawn 3 February 2006
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Whether penalties imposed on the taxpayer are in accordance with Part 7 of the Superannuation Guarantee (Administration) Act 1992 (SGAA) and with Superannuation Guarantee Ruling SGR 94/3.
The penalties imposed on the taxpayer were in accordance with Part 7 of the Superannuation Guarantee (Administration) Act 1992 (SGAA) and with Superannuation Guarantee Ruling SGR 94/3.
Following failure to respond to several notices an audit was conducted which resulted in the identification of the taxpayer, a professional in the tax area, having an outstanding liability for employee superannuation contributions under the SGAA for several financial years.
The taxpayer paid the shortfall and included an apology and explanation for the delay. The explanation made reference to the taxpayer having suffered illness.
Part 7 penalties were imposed on the taxpayer for all years under section 59(1) of the SGAA (allowing for remissions of penalty under subsection 62(3) (SGAA) and Superannuation Guarantee Ruling SGR 94/3). Included in the penalty were components for culpability (25%), hindrance (20%), a recurring offence (5% for the second year increasing by 5% for each subsequent year) and a non-lodger component (10%).
The taxpayer objected against the penalties on the grounds they had supplied relevant information to the ATO and they had received advice from the ATO which led them to believe they were correctly complying with the superannuation guarantee legislation. The taxpayer's superannuation fund had accepted the late contributions, further contributing to the misunderstanding.
Reasons For Decision
Under Part 7 of the SGAA, a penalty is payable by the employer for failing to provide, as required, information relevant to assessing the employer's liability to pay superannuation guarantee surcharge. The penalty for failing to provide statements or information is 200% of the amount of SG payable by the employer in the year.
Under subsection 62(1) of the SGAA, the Commissioner must make an assessment of the penalty payable under Part 7. Subsection 62(3) gives the Commissioner the power to remit all or part of the penalty payable. SGR94/3 provides guidelines to officers to assist them in exercising their discretion to remit the additional charge. The Ruling proposes that officers work out the appropriate level of penalty, and then remit the difference between that level and the level imposed in the legislation.
On the basis of the explanations provided by the taxpayer that illness, misunderstanding and poor communication all played a significant part in the failure of the taxpayer to provide the required documents promptly, the 20% hindrance component was remitted to NIL for each SG Statement year under subsection 62(3) (SGAA).
Remitting other penalties imposed was not appropriate in the circumstances. Given that the taxpayer is a professional in the tax area, it was considered that a failure to meet the taxpayer's own superannuation guarantee obligations was not a matter to be treated leniently.
Date of decision: 13 May 1998
Superannuation Guarantee (Administration) Act 1992
Part 7 subsection 59(1)
Part 7 subsection 77(1)
Part 7 subsection 62(3)
Part 7 section 34
Part 3 section 22
Part 3 section 23
Part 3 section 16
Part 3 section 17
Related Public Rulings (including Determinations)
Superannuation Guarantee Ruling SGR 94/3
Superannuation guarantee charge
Superannuation guarantee shortfalls
Siebel/TDMS Reference Number: UM98TO62
Business Line: Superannuation
Date of publication: 4 June 2001