Tax Deductibility of Contributions
An employer is generally entitled to a full deduction for all contributions to superannuation on behalf of employees under age 75. Certain criteria must be met including that the employee is engaged in producing the employer’s assessable income. Contributions made within 28 days of the end of the month in which an employee turns 75 or that are required to be made under an industrial award or other prescribed arrangements (after age 75) may also be deductible.
Self-employed people or other eligible persons (with less than 10% of their assessable income and reportable fringe benefits attributable to employment as an employee) are generally entitled to a full deduction for superannuation contributions under age 75, provided certain conditions are met. Persons aged under 18 are subject to special rules. To obtain the deduction, a notice of intention to claim a tax deduction (previously referred to as an 82AAT notice) must be submitted to the Fund by the earlier of:
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The time of lodgement of the person’s tax return, or;
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The end of the fi nancial year following the year the contribution was made (Deduction Notice).
The Deduction Notice must be acknowledged by the Trustee. The Trustee can refuse to acknowledge a Deduction Notice in certain circumstances (for example, the person’s account balance does not contain suffi cient monies to meet the tax applicable to deductible contributions).
Note: These rules only apply from 1 July 2007. Any tax deduction claim for personal contributions made prior to 1 July 2007 will need to be made in accordance with rules that were current at that time.