Issue
Will the Commissioner of Taxation (the Commissioner) amend a surcharge assessment in accordance with section 18 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) where the member has subsequently quoted their TFN to the Commissioner, and the amended assessment would result in a lower surcharge liability than the original assessment?
Decision
Yes. In accordance with subsection 18(2) of the SCTA, where a member quotes their TFN to the Commissioner after an assessment of surcharge has been made, the Commissioner will amend the assessment to reduce the amount of surcharge liability to the amount that would have been payable if the Commissioner had known the TFN when the original assessment was made.
Facts
The member did not quote their TFN to the relevant superannuation provider in respect of their superannuation account with that provider.
The Commissioner took all reasonable steps to determine the member's TFN.
The Commissioner was unable to determine the member's TFN at the time the assessment was made.
The Commissioner raised a surcharge liability on the reported surchargeable contributions for the relevant superannuation account that did not have the member's quoted or derived TFN.
The member subsequently quoted their TFN to the Commissioner after the surcharge assessment was made.
Reasons for Decision
In accordance with section 5 of the Superannuation Contributions Tax Imposition Act 1997 , a 15% surcharge may be imposed on surchargeable contributions for non-quotation of a member's TFN in respect of a particular superannuation account. If the Commissioner, after taking all reasonable steps to determine a member's TFN cannot find that TFN, the surcharge may apply to surchargeable contributions depending on the circumstances.
Where no TFN is reported for an account opened on or after 7 May 1997, a surcharge rate of 15% will be applied to the member's surchargeable contributions. Where the account was operating before 7 May 1997 and the contributions received by the member exceeds the surchargeable contributions threshold for the relevant financial year, a 15% surcharge rate will be applied to the member's surchargeable contributions.
In this case, the Commissioner was unable to determine the member's TFN in respect of a particular superannuation account and accordingly applied the surcharge to the surchargeable contributions reported in respect of the relevant account. The member subsequently quoted their tax file number to the Commissioner after the assessment was made.
Subsection 18(2) of the SCTA ensures that the Commissioner will amend the assessment to reduce the amount of surcharge to the amount that would have been payable if the Commissioner had known the member's TFN when the assessment was made.