Penalty for Late Superannuation Deduction Notice "Harsh"
In a recent case, the Administrative Appeals Tribunal determined that a 25% administrative penalty was properly imposed by the Commissioner on a taxpayer who failed to provide a notice of intent on time to claim a deduction for a personal superannuation contribution.
However, the Tribunal decided to remit in full the administrative penalty as it found it would be "harsh" for the taxpayer to pay a penalty of $10,000 on top of the $40,000 increase in his tax bill due to a shortcoming in paperwork.
To be eligible for a deduction for a personal superannuation contribution, the individual must:
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give a notice to the fund trustee stating his or her intention to claim a deduction; and
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receive an acknowledgment of receipt of the notice.
The notice must be given by the time the person lodges his or her income tax return for the year in which the contribution is made or, if no return has been lodged by the end of the following income year, by the end of that following year.
