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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-42 - PERSONAL SERVICES INCOME    View history reference

Division 86 - Alienation of personal services income    View history reference

Subdivision 86-B - Entitlement to deductions    View history reference

SECTION 86-75  Superannuation  

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86-75(1)  

Section 86-60 does not stop a *personal services entity deducting a contribution the entity makes to a fund or an *RSA for the purpose of making provision for *superannuation benefits payable for an individual whose *personal services income is included in the entity ' s *ordinary income or *statutory income.

For deductions for superannuation contributions: see Subdivision AA of Division 3 of Part III of the Income Tax Assessment Act 1936 .

86-75(2)  

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However, if:


(a) the individual performs less than 20% (by *market value) of the entity ' s principal work; and
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(b) the individual is an *associate of another individual whose *personal services income is included in the entity ' s *ordinary income or *statutory income;

the entity ' s deduction cannot exceed the amount it would have to contribute, for the benefit of the individual, to a *complying superannuation fund or an *RSA in order to ensure that it did not have any *individual superannuation guarantee shortfalls in respect of the individual for any of the *quarters in the income year.

86-75(3)  

To work out the amount the entity would have to contribute for the purposes of subsection (2), the individual ' s salary or wages, for the purposes of the Superannuation Guarantee (Administration) Act 1992 , are taken to be the amount that section 86-60 does not prevent the entity deducting for salary or wages it paid to the individual.

Note:

Section 86-60 will apply the limitations under sections 85-10 and 85-20 on an individual ' s entitlement to deductions (but see paragraph 85-10(2)(e) on employment of associates).


 



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