Income Tax Assessment Act 1997
CHAPTER 3 - SPECIALIST LIABILITY RULES
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Hide history noteDivision 290 - Contributions to superannuation funds
Note: A Commissioner ' s Remedial Power modification is relevant to this part of the tax law. Taxation Administration (Remedial Power - Work Test for Personal Superannuation Contributions) Determination 2023 (F2023L00564) modifies the operation of s 290-165(1A) of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 290-165(1A) .
The operation of the relevant provision is modified as follows:
For the purposes of s 370-5 in Sch 1 to the Taxation Administration Act 1953 , s 290-165(1A) of the Income Tax Assessment Act 1997 is modified to operate as if:
The modification applies in relation to contributions made on or after 1 July 2022.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
Subdivision 290-B - Deduction of employer contributions and other employment-connected contributions
Other employment-connected deductions
SECTION 290-90 Controlling interest deductions
290-90(1)
Section
290-60
applies as modified by this section if you make a contribution in respect of another person at a time, and at that time:
(a)
the other person is an employee of a company in which you have a controlling interest; or
(b)
you are connected to the other person in the circumstances set out in subsection (5); or
(c)
you are a company connected to the other person in the circumstances described in subsection (6).
290-90(2)
Treat the other person as your employee at that time for the purposes of subsection
290-60(1)
.
Note 1:
A deduction may be denied by section 85-25 if the employee is your associate.
Note 2:
Section 86-60 (read together with section 86-75 ) limits the extent to which superannuation contributions by personal service entities are deductions.
290-90(3)
Despite subsection
290-60(2)
, for you to deduct the contribution the condition in subsection (4) needs to be satisfied instead of the condition in section
290-70
.
290-90(4)
The other person must be:
(aa)
an employee (within the expanded meaning of employee given by section
12
of the
Superannuation Guarantee (Administration) Act 1992
) of the other person
'
s employer; or
(a)
engaged in producing the assessable income of the other person
'
s employer; or
(b)
an Australian resident engaged in the business of the other person
'
s employer.
290-90(5)
For the purposes of paragraph (1)(b), the circumstances are:
(a)
you are the beneficial owner of shares in a company of which the other person is an employee, but you do not have a controlling interest in the company; and
(b)
you are at *arm
'
s length with the other person in relation to the contribution; and
(c)
neither the other person, nor a *relative of the other person:
(i) has set apart an amount as a fund, or has made a contribution to a fund, for the purpose of providing *superannuation benefits for you or a relative of yours; or
(ii) has made an *arrangement under which the other person or relative will or may do so.
Company controlling interest deductions
290-90(6)
For the purposes of paragraph (1)(c), the circumstances are:
(a)
the other person is an employee of an entity that has a controlling interest in the company; or
(b)
an entity that has a controlling interest in the company also has a controlling interest in a company of which the other person is an employee.
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