House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)

Chapter 5 Statements and Assessments

Overview of the Chapter

This chapter discusses the lodgment of superannuation guarantee statements and the assessment process.

Explanation

Superannuation guarantee statements

An employer is required to lodge a superannuation guarantee statement if the employer has a superannuation guarantee shortfall and therefore is liable to pay the superannuation guarantee charge. The statement is due by 14 August in the following year or by a later date allowed by the Commissioner. [Subclause 30(1)]

Generally, an employer will not have to lodge a statement if the employer does not have a shortfall. However, the Commissioner may require any employer to lodge a statement within a period of not less than 14 days, stating whether the employer has a superannuation guarantee shortfall. [Clause 31]

A superannuation guarantee statement must:

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specify:

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the employer's name and postal address;

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the name, postal address and tax file number (if that number is available to the employer) of each employee for whom the employer had an individual superannuation guarantee shortfall;

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the amount of each such shortfall;

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the total of the employer's individual superannuation guarantee shortfalls for the year;

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the amount of the nominal interest component for the year;

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the amount of the administration component for the year;

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the employer's annual national payroll for the base year if $500,000 or less;

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the amount of the employer's Superannuation guarantee charge for the year;

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be in a form approved by the Commissioner;

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be lodged in accordance with the procedures to be set out in the regulations relating to this Bill;

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be signed by or on behalf of the employer making the statement. [Subclauses 30(2) and (3)]

Assessments

The assessment arrangements for the superannuation guarantee charge will be similar to those applying for company income tax. That is, if an annual superannuation guarantee statement is lodged by an employer (and no previous statement for that year has been lodged and no assessment raised) the Commissioner will be taken to have made an assessment of the employer's superannuation guarantee shortfall and the superannuation guarantee charge payable as specified in the statement. The date of the assessment will be either:

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14 August if the employer lodges the statement on or before that date: or

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the day the statement is lodged, if the employer lodges the statement after 14 August.

For example, if an employer lodges a superannuation statement on 31 July the assessment will be taken to be made on 14 August. However, if the employer lodges the statement on 20 September, the assessment is taken to be made on that date.

The superannuation guarantee statement which has been lodged will be taken to be a notice of the assessment signed by the Commissioner and given to the employer on the day that the assessment is made. [Clause 32]

Default Assessments

If a superannuation guarantee statement for a year has not been lodged, the Commissioner will be able to make an assessment of the employer's superannuation guarantee shortfall and of the superannuation guarantee charge payable on the shortfall, if in the Commissioner's opinion, the employer is liable for that year. The Commissioner can make such a default assessment either during or after the year to which the assessment relates. [Subclause 33(1)]

In these circumstances, the Commissioner may not have sufficient information to make an assessment of the superannuation guarantee shortfall of an employer in the year. Therefore, the shortfall for the purposes of making an assessment will be the amount that, in the opinion of the Commissioner, might reasonably be expected to be the shortfall.[Subclause 33(2)]

Amendment of Assessments

The Bill gives the Commissioner authority to amend an assessment.

The Commissioner will be able to amend an assessment at any time, by making such alterations or additions as the Commissioner considers necessary. The Commissioner may amend an assessment irrespective of the fact that superannuation guarantee charge has been paid. [Subclause 34(1 )]

However, the exercise of this general power is subject to certain time constraints.

The time limits for amending an employer's assessment are as follows:

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if the amendment increases the liability to tax and is due to avoidance of the superannuation guarantee charge, and:

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if, in the Commissioner's opinion, the avoidance is due to fraud and evasion - at any time;

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in any other case - 4 years from the time of assessment; [Subclause 34(2)]

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if the amendment reduces the employer's liability - 4 years from the date of assessment; [Subclause 34(3)]

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if the amendment reduces the liability of a previously amended assessment - 4 years from the date the charge was payable under the amended assessment; [Subclause 34(4)]

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if the employer applies for an amendment within 4 years and supplies the Commissioner with sufficient information within that period to enable the application to be processed - at any time; [Subclause 34(5)]

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if the amendment is to give effect to a decision of the Administrative Appeals Tribunal (AAT) or a Court - at any time; [Subclause 34(6)]

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if the amendment reduces the employer's liability as a consequence of consideration of an objection against the assessment or pending a decision of the AAT or Court - at any time. [Subclause 34(6)]

An amended assessment is taken to be an assessment unless provision of this Bill expressly provides otherwise. This ensures that the provisions of this Bill relating to original assessments also apply to amended assessments. [Clause 36]

Refund of overpaid amounts

The Bill gives the Commissioner authority to refund any overpayment of superannuation guarantee charge which arises as a consequence of an amendment of an assessment to reduce an employer's liability. This includes additional superannuation guarantee charge imposed either by late payment penalties or other penalties (see chapter 9). If additional superannuation guarantee charge for late payment has been imposed, the amount of the additional charge is to be recalculated as though the amount by which the charge has been reduced on amendment was never payable.

The overpaid amount will be either:

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refunded; or

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if the employer has a liability to the Commonwealth (that is, an amount due for liabilities under another Act administered by the Commissioner) - applied to meet that liability either in whole or in part. [Clause 35]

Other Assessment Matters

The Commissioner will be required to give written notice of an assessment to the person liable to pay the superannuation guarantee charge as soon as practicable after making the assessment. This does not apply to a deemed notice of assessment taken to have been given to an employer (see earlier note on 'Assessments'). [Clause 37]

The Bill also treats, an assessment as valid despite non-compliance with a provision of the Bill. This ensures that in any objection or dispute relating to an assessment, the objector may challenge the correctness of the assessment but not any act or omission of the Commissioner in making the assessment.[Clause 38]