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Is the superannuation provider liable for the surcharge where there has been a transfer of employer contributed amounts to the member?

No. Where there has been a transfer of employer contributed amounts from the superannuation provider to the member, the member is liable for the surcharge in respect of the surchargeable contributions they hold. Under section 10 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) if the surchargeable contributions have been paid to the member then they are liable to pay the surcharge on those contributions.

The superannuation provider, which was a superannuation (accumulated benefits) provider, reported employer superannuation contributions received for the member in the financial year.

During the financial year the superannuation provider paid to the member an eligible termination payment (ETP) which included surchargeable contributions.

The Commissioner of Taxation (Commissioner) issued a superannuation contributions tax assessment to the member in respect of the surchargeable contributions which were included in the ETP paid to the member.

Section 13 of the (SCTA) requires the superannuation provider to report to the Commissioner details of a member's total contributed amounts for each financial year including the member's surchargeable contributions. In addition, the superannuation provider is also required to report details of that part of the total contributed amounts transferred by a provider to the member or to another provider.

If the provider is the holder of the surchargeable contributions when the assessment of the surcharge on those contributions is made, the provider is liable to pay the surcharge (subsection 10(2) of the SCTA).

If the surchargeable contributions were paid, or the pension or annuity began to be paid, to the member, the member is liable to pay surcharge (subsection 10(4) of the SCTA.

In a superannuation (accumulated benefits) provider, surchargeable contributions are calculated by reference to amounts actually paid to the superannuation provider (subsection 8(2) of the SCTA). As the provider is a superannuation (accumulated benefits) provider, the total amount of employer contributions reported by the provider for the financial year are surchargeable contributions. However, as surchargeable contributions were paid to the member, the member is liable for the surcharge on those contributions.