This report covers a new a 12-month Australian superannuation guarantee amnesty period.
An announcement has been made for a 12-month Australian superannuation guarantee amnesty period. The amnesty has not yet been legislated, but it is intended to apply retrospectively from 24 May 2018 for 12 months.1
This is a unique one-off opportunity being provided to employers to self-correct their past superannuation guarantee (SG) non-compliance without penalty, provided the outstanding contributions can be paid into the employees’ accounts within the amnesty period.
The amnesty period will be particularly relevant for foreign employers with employees working in Australia and remaining on the foreign employer’s payroll. The reason for this comes down to how they are managing their Australian pay-as-you-go (PAYG) withholding tax and employment tax obligations. For these employers, there are two mechanisms available for managing the Australian PAYG withholding obligations:
In this case, the employer should be also compliant for their employment tax obligations, including SG contributions as the arrangement mirrors the Australian payroll process.
This variation only applies to the PAYG withholding obligation, and as such, the employer is still required to effectively operate a shadow payroll so that it is meeting its SG obligations and other Australian employment tax obligations. As such, employers managing their employees’ Australian income tax obligations through this arrangement have a high risk of non-compliance for their SG contribution obligations.
All employers with employees working in Australia or who employ Australian resident taxpayers for work overseas should review their superannuation guarantee obligations and establish that contributions have been made (where necessary).
In particular, foreign employers with expatriates working in Australia and remaining on the foreign employer’s payroll should review their superannuation guarantee contributions made and consider availing of the amnesty period to voluntarily declare any non-compliance.
1 To see the ATO announcement, click here.
2 As reported in The Australian (online), a cross-agency confidential report involving Treasury, the ATO, the Department of Employment and financial regulators the Australian Securities & Investments Commission and the Australian Prudential Regulation Authority, was submitted to Financial Services Minister Kelly O’Dwyer in March 2017, but was not publicly released. (See M. Roddan “Employers Face Super Gap Crackdown,” The Australian (online), 14 July 2017.)
The information contained in this newsletter was submitted by the KPMG International member firm in Australia.
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