Last month, the Institute of Public Accountants showed full support for the SG amnesty, and urged full passage of the bill through Parliament last month.
“This one-off amnesty should be supported to allow employers to wipe the slate clean and pay their workers what they’re owed, as all Australian workers should be paid their entitlements in full,” said IPA chief executive Andrew Conway.
However, DBA Lawyers director Daniel Butler and lawyer Christian Pakpahan said in a joint column that the 12-month period already began on 24 May when the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 (‘SG bill’) was tabled and no one knows when, if ever, the SG bill will become law.
They said businesses that have already made disclosures to the ATO on the basis of the proposed amnesty may have therefore been misled and that, as a result, the ATO will broadly treat these as voluntary disclosures if the SG bill fails to become law.
“Further, there are still a number of serious modifications required to be made in order to make the amnesty an appropriate basis for employers to come forward with legal certainty,” Mr Butler and Mr Pakpahan said.
“Indeed, it would be preferable for the law to be introduced and passed before an amnesty of this nature is announced.”
In particular, Mr Butler and Mr Pakpahan highlighted that contributions made under the amnesty would broadly be considered concessional contributions and may cause employees to exceed their $25,000 annual concessional contributions cap.
They said that, generally, employees are not subject to tax on their concessional contributions, but concessional contributions in excess of the concessional contributions cap are included in the employee’s assessable income, meaning the employee could also be liable to pay excess concessional contributions charge.
“The amnesty partly circumvents this where contributions are made by the ATO on behalf of the employer by streamlining the exercise of the ATO’s discretion to disregard contributions in relation to a financial year where contributions are made by the ATO on behalf of the employer due to the amnesty,” Mr Butler and Mr Pakpahan said.
“However, the exception does not apply where the employer has made the contributions directly to an employee’s fund under the amnesty and has used those contributions to offset their SG charge liability.”
Further, Mr Butler and Mr Pakpahan noted the SG bill refers to the ATO’s views on the meaning of ‘examination’ as explained in MT 2012/3, where it states that the term ‘examination’ is very broad and covers not only traditional audits which the ATO undertakes to ascertain an entity’s tax-related liability but any examination of an entity’s affairs.
“A range of compliance activities undertaken by the ATO may involve an examination of an entity’s affairs, including reviews, audits, verification checks, record keeping reviews/audits and other similar activities,” they said.
“This means that any of those compliance activities may disqualify an employer from being eligible to access the amnesty for that relevant quarter.
“Accordingly, expert advice should be obtained before attempting to access the amnesty.”
