Superannuation (Excess Non‑concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014
No. 52, 2014
An Act to amend the Superannuation (Excess Non‑concessional Contributions Tax) Act 2007, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Temporary budget repair levy
Superannuation (Excess Non‑concessional Contributions Tax) Act 2007
Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014
No. 52, 2014
An Act to amend the Superannuation (Excess Non‑concessional Contributions Tax) Act 2007, and for related purposes
[Assented to 25 June 2014]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Superannuation (Excess Non‑concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provision(s) | Commencement | Date/Details |
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | 25 June 2014 |
2. Schedule 1 | At the same time as Schedule 1 to the Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014 commences. | 25 June 2014 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Temporary budget repair levy
Superannuation (Excess Non‑concessional Contributions Tax) Act 2007
1 At the end of the Act
Add:
6 Temporary budget repair levy
(1) This section applies to the temporary budget repair levy years.
(2) Increase the percentage mentioned in section 5 by 2 percentage points.
Increase limited if certain contributions already taxed
(3) However, do not increase the percentage in relation to a person to the extent the increase would result in the sum of the following amounts payable on the person’s excess concessional contributions for a temporary budget repair levy year exceeding 95% of those excess concessional contributions:
(a) income tax;
(b) excess non‑concessional contributions tax.
Definitions
(4) In this section:
excess concessional contributions has the same meaning as in the Income Tax Assessment Act 1997.
income tax has the same meaning as in the Income Tax Assessment Act 1997.
temporary budget repair levy year has the same meaning as in section 4‑11 of the Income Tax (Transitional Provisions) Act 1997.
[Minister’s second reading speech made in—
House of Representatives on 13 May 2014
Senate on 16 June 2014]
Overview
The Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014 was enacted by the Parliament of Australia to amend the Superannuation (Excess Non-concessional Contributions Tax) Act 2007, introducing a temporary budget repair levy aimed at addressing fiscal imbalances. This Act, which received Royal Assent on 25 June 2014, is designed to increase the tax percentage on excess non-concessional contributions during specified temporary budget repair levy years, while ensuring that the total tax on such contributions does not exceed 95% to maintain fairness in taxation. The policy objective is to provide a temporary measure to assist in budget repair without unduly burdening superannuation contributors.
Scope and Application
The Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014 amends the Superannuation (Excess Non-concessional Contributions Tax) Act 2007, with the primary objective of introducing a temporary budget repair levy on excess non-concessional contributions. The Act applies to individuals who have made excess non-concessional contributions into their superannuation funds during the specified temporary budget repair levy years. This Act is of national application as it is a Commonwealth Act and therefore applies across Australia. The Act is designed to increase the percentage of tax applied to such contributions by 2 percentage points, with a cap to ensure that the combined tax on these contributions does not exceed 95% of the total excess non-concessional contributions. This legislative amendment is intended to generate additional revenue to assist in budgetary repairs and is in effect for the duration specified in the related Tax Laws Amendment Act.
Key Provisions
The Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Act 2014, referred to in this context as the Act, is designed to amend the Superannuation (Excess Non-concessional Contributions Tax) Act 2007. This amendment introduces a temporary budget repair levy, which is detailed in Schedule 1. Specifically, section 6 of the amended Act increases the percentage rate of tax on excess non-concessional contributions by two percentage points during the designated temporary budget repair levy years, as defined in the Income Tax (Transitional Provisions) Act 1997. However, this increase is capped such that the total tax on excess concessional contributions does not exceed 95% of the contributions, combining income tax and excess non-concessional contributions tax.
The Act imposes obligations on superannuation funds and their members to ensure compliance with the increased tax rates during the temporary budget repair levy years. It is the responsibility of the fund to report and calculate the additional tax on excess non-concessional contributions in accordance with the amended provisions. Members must also be aware of their contributions and the applicable tax rates to ensure they do not exceed the allowable limits, which could result in additional tax liabilities.
Breach of the provisions outlined in the Act can lead to civil or criminal consequences. Specifically, section 5 of the Superannuation (Excess Non-concessional Contributions Tax) Act 2007, as amended, stipulates that failure to comply with the tax obligations can result in penalties. The maximum penalty for non-compliance can be significant, including fines that can extend up to the greater of $5,250 or three times the amount of the unpaid tax. In cases of intentional disregard or reckless behaviour, the penalties can be even more severe, potentially leading to criminal charges with associated fines and imprisonment. It is imperative for all parties involved to adhere to the legislative requirements to avoid these consequences.