• Service: Tax, Corporate Tax
  • Industry: Financial Services
  • Type: Regulatory update
  • Date: 5/03/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Damian Ryan

Damian Ryan
Partner, Tax

+61 2 9335 7998

Super funds: tax treatment of payments to regulators and administrators 

by Damian Ryan, Financial Services Specialist

Many of the large superannuation funds that are rated 'key taxpayers' or 'Q2' under the Australian Taxation Office's (ATO) risk differentiation framework have recently been undertaking their 2013 post-lodgement compliance review meeting with the ATO’s Public Groups and International superannuation cell.

Interestingly, one of the focus areas from the ATO has been the treatment of expenses paid by the superannuation funds to both the regulators and administrators. In particular, the ATO have focused on the costs incurred by superannuation funds in relation to implementation of what is referred to as the 'Super Stream' reforms. More specifically, the ATO have focused on both the quantum and nature of the expenses; and how they have been treated from an income tax perspective. This is particularly interesting in an environment where superannuation funds effectively outsource certain functions, for example, the administrator, the custodian and the actuary.


We have been working with our clients to determine what expenses are immediately deductible under section 8-1of the Income Tax Assessment Act 1997; what expenses fall into the cost base of either a capital gains tax (CGT) or depreciating asset; and what expenses fall within the 'blackhole provisions' of section 40-880.


Superannuation funds that are classified as either Q2 or Q3 (medium risk) should expect a level of scrutiny from the ATO in relation to the treatment of these expenses.


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