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Australia – Bill Could Heighten ATO Powers over Employers’ Superannuation Compliance

Australia – Bill Could Heighten ATO Powers

This report covers a new Exposure Draft on legislation that would strengthen the integrity of Australia’s system for mandatory employer superannuation contributions.

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Flash Alert 2018-037

On 24 January 2018, the federal government released Exposure Draft (ED) Treasury Laws Amendment (Taxation and Superannuation Guarantee Integrity Measures) Bill 2018 to strengthen the integrity of Australia’s system for mandatory employer superannuation contributions (SG).  If enacted, the draft legislation would provide the Australian Taxation Office (ATO) with additional powers, including:

  • Directing employers who fail to meet their SG obligations to undertake SG education courses;
  • Directing employers to pay overdue SG liabilities, with new criminal penalties for failure to comply with such a direction;
  • Disclosing information to workers about actual or suspected failure by their employer to meet its SG obligations, and the action that the ATO is taking in relation to the situation.

WHY THIS MATTERS

Employers should particularly take note of the third item above.  Under the proposed legislation, if an employee made a complaint to the ATO about his/her employer failing to make the required superannuation contributions, the ATO could now take the lead in communications with other employees who might be similarly affected.  In such cases, this would imply more involvement by the ATO where employers are concerned.

Additional Aspects of the ED

The ED also includes proposing:

  • changes to the single touch payroll (STP) reporting rules relating to superannuation contributions;
  • removing salary sacrifice contributions from the assessment of whether the employer has met its SG obligation.

The ED emphasizes that:

  • employers are not required to report actual superannuation contributions through STP – this obligation will fall on the receiving fund.

KPMG NOTE

These proposals are indicative of the increased focus that government is placing on compliance.  Coupled with the real-time data that STP will make available to the ATO, this presents a strong case to employers to thoroughly review their processes and practices in relation to SG. 

FOOTNOTE

1  For the Exposure Draft and Explanatory Material, and other related documents, click here.

The information contained in this newsletter was submitted by the KPMG International member firm in Australia.

© 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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