Claiming Back Additional Tax on employer contributions

If additional tax on employer contributions is imposed, the additional tax may be refunded if the member subsequently provides their TFN to the trustee. 

The refund is obtained by the trustee claiming a tax offset for the amount of additional tax paid in preceding year (or preceding 3 years).  The refund must be credited to the account of the relevant member.

If $10,000 of employer contributions received by the fund during 2007/08 are subject to additional tax, and the member quotes their tax file number on 30 June 2008, the trustee can claim a tax offset of $3,150 in respect of the 2008/09 financial year.  The tax offset cannot be claim the offset in respect of the year in which the additional tax arose.

Funds may be able to adjust their PAYG instalments in respect of the year in which they claim the tax offset. 

The simple solution is to ensure that all current members have provided their TFN and all new members provide their TFN on joining the fund.