In a recent report about excess super contributions paid by your clients, ATO discussed the processes you can do to comply with excess contributions tax (ECT) obligations.  The office also pointed at the penalties that may apply should you not meet release authority obligations:

1.    An ECT Notice of Assessment and a release authority should be mailed separately to individuals at their address for service of notices held by the Australian Taxation Office (ATO).  This release of authority is what enables each member to fulfill a condition of release and gives the authority to a super fund to release the same amount equal to the excess contributions tax payable.  A release authority is then sent out to individuals within days after issuing the assessment.

2.    The assessment has a maturity date of 21 days in which it must be paid.
-    If your clients have excess non-concessional contributions tax, they are required to use the compulsory release authority and deposit it to their funds within 21 days after the release authority date.  You may then give your client two options, have the money paid to a) them or, b) the ATO.  Should a client choose to have the money paid to him/her, the client must make other arrangements to pay their excess contributions tax debt.

-    If your clients have an excess non-concessional contributions tax, you can have them choose between using the voluntary release authority to withdraw up the liability’s amount, or not.

3.    When a release authority from the member had been released to a fund, they are obliged to release the amount equivalent to the excess contributions tax shown on the form within 30 days of receipt.  However, if they were only able to receive the release authority more than 90 days after date of issue, the client must not act on it as it will have expired.

A fund must complete the release authority statement and send it to the ATO, and a coy to their member, within 30 days of releasing the money.

4.    The ATO has the discretion to send a release authority directly to a fund should a member not comply with the compulsory release authority obligations.  If the ATO does send it, the obligations in the fund will not be changed.  However, in such instance, the fund must send the release amount directly to the ATO.

Need a Tax Consultant?  Get help here.

Looks like Australia and other dairy exporters, including New Zealand and some South American nations, are set for higher demand in this decade as world markets are becoming increasingly hungry for Australian dairy products.  Only seven per cent of global milk production is being internationally traded because big producers like the US and Europe are likely to fully consume what their farmers can deliver.  A growing demand is also seen in neighboring Asia.

Reports had shown that the era of big production resulting to stockpiled mountains of butter and milk lakes in the northern hemisphere in the last two decades have already ended, slashing world stocks to minimal levels.

Facing Big Challenges
Despite a volatile global economy which can affect farmers’ confidence to rebuild herds, dairy processors will be exposed to increasing pressure to lock in long-term pricing and export schedules.  Other production challenges seen by Dairy Australia’s latest Situation Outlook include climate and water shortage pressures for traditionally irrigated dairy powerhouse areas in Victoria, NSW’s Riverina, and the Lower Murray.

“Unless we address the impact on arable land within a 300 kilometre radius of our major population centres we’ll soon have a major problem feeding our domestic and off shore markets efficiently,” Dr Lean, University of Sydney dairy specialist said.

Need accounting help?  Get help here.