Super guarantee contributions for the December 2022 quarter
A reminder to employers that their December 2022 superannuation guarantee (‘SG’) contributions were due by 28 January 2023.
Do not forget the two changes to SG that commenced on 1 July 2022:
- the rate increased from 10% to 10.5%
- employees no longer need to earn $450 per month to be eligible.
- Employers now need to make super contributions for all eligible employees, regardless of how much they were paid – their earnings amount is not relevant. However, employees who are under 18 still need to work more than 30 hours in a week to be eligible.
Electric vehicle FBT exemption legislation is now law
Legislation to make certain electric vehicles exempt from Fringe Benefits Tax (‘FBT’) has now been enacted into law.
Certain zero or low emissions vehicles provided as a car benefit on or after 1 July 2022, can be exempt from FBT.
For this exemption to apply various criteria need to be satisfied.
The car needs to have been both held and used for the first time by the employer on or after 1 July 2022 and it cannot have been subject to the luxury car tax when it was purchased.
For the 2023 income year, to qualify for this exemption, the car needs to cost less than the luxury car tax threshold for fuel efficient vehicles of $84,916.
A vehicle is a zero or low emissions vehicle if it satisfies both of these conditions:
It is a:
- battery electric vehicle; or
- hydrogen fuel cell electric vehicle; or
- plug-in hybrid electric vehicle.
It is a car designed to carry a load of less than 1 tonne and fewer than 9 passengers (including the driver).
Motorcycles and scooters are not cars for FBT purposes and do not qualify for the exemption, even if they are electric.
Please note that in relation to plug-in hybrid electric vehicles, there is a specific limitation on the FBT exemption.
From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law.
There are special provisions allowing the exemption to continue when a plug-in vehicle was provided as an exempt benefit under an agreement entered into before 1 April 2025 that continues after this date.
Although the private use of an eligible electric car is exempt from FBT, an employer still needs to include the notional value of the benefit when working out whether an employee has a reportable fringe benefits amount (‘RFBA’).
An employee has an RFBA if the total taxable value of certain fringe benefits provided to them (or their associate) is more than $2,000 in an FBT year. The RFBA must be reported through Single Touch Payroll or on the employee’s payment summary.
The amount of an RFBA reported for an employee is not added to an employee’s taxable income for determining income tax and Medicare Levy liabilities.
However, it is added to an employee’s taxable income for calculating Medicare Levy Surcharge liability, and is included in income tests for family assistance, child support assessments, and some other government benefits and obligations.
Further eligibility age change for downsizer contributions
In another recent legislative change, the eligibility age to make a downsizer contribution into superannuation has been reduced to 55 from 1 January 2023.
This further reduces the downsizer eligibility age, which changed from 65 to 60 from 1 July 2022.
From 1 January 2023, eligible individuals aged 55 years or older can choose to make a downsizer contribution into their super fund of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home that has been held for at least 10 years and qualifies for at least a partial main residence exemption.
There are no changes to the remaining eligibility criteria.
Key dates for downsizer contributions:
- Eligible individuals aged 55 years or older can make a downsizer contribution from 1 January 2023.
- For any downsizer contributions made between 1 July 2022 and 31 December 2022, eligible individuals must be aged 60 years or older at the time of making their contribution.
- Prior to 1 July 2022, the eligibility age was 65 years and over.
Other important information to consider for 55-59 year olds:
- Individuals have 90 days from receiving the sale proceeds of their home to make a downsizer contribution.
This means if an individual receives the proceeds of sale prior to 1 January 2023, they can make their contribution after 1 January 2023, so long as they are still making it within 90 days of receiving the proceeds. - If 1 January 2023 falls outside of their 90 day window to make a downsizer contribution, they will not be eligible. It is unlikely the ATO would grant an extension of time in these circumstances.
Unlike most other contributions into superannuation, there is no upper age limit for being eligible to make a downsizer contribution. Even a 95 year could make a downsizer contribution, and there is no need to satisfy the work test!
Builder unable to obtain refund of incorrectly charged GST
The Administrative Appeals Tribunal has held that a builder was unable to receive a refund of GST incorrectly charged on the sale of a residential premises that had been rented for just over five years since construction was complete.
The taxpayer claimed the GST charged on a unit was charged in error, on the basis that the sale was actually an input taxed supply. Accordingly, the taxpayer sought a refund of the GST previously remitted to the ATO on the unit.
For residential premises to fall outside the definition of ‘new residential premises’ and therefore be input taxed rather than a taxable supply, it needs to meet the requirements of S.40-75(2)(a) of the GST Act.
Broadly, to meet the requirements of this section there needs to have been a continuous five-year period since the premises first become residential premises, during which the premises have “only been used for making supplies that are input taxed” (i.e., being used as a rental property).
Unfortunately for the builder, this requirement was not satisfied because the unit was also marketed for sale a few months before the completion of the five-year period since the issue of the certificate of occupancy.
A lesson to be learnt here is that any time a residential premises is both rented and on the market for sale it does not meet the requirements to count towards the five-year continuous period that it has “only been used for making supplies that are input taxed.”
Due Dates – February 2023
Information for registered agents about preparing and lodging tax statements and returns due in
February 2023.
21 February
• Lodge and pay December 2022 monthly business activity statement for business clients with up to
$10 million turnover who report GST monthly and lodge electronically.
• Lodge and pay January 2023 monthly business activity statement.
28 February
• Lodge tax return for non-taxable large and medium entities as per the latest year lodged (except
individuals).
Payment (if required) for companies and super funds is also due on this date. Payment for trusts in
this category is due as per their notice of assessment.
• Lodge tax returns for new registrant (taxable and non-taxable) large or medium entities (except
individuals).
Payment (if required) for companies and super funds is also due on this date. Payment for trusts in
this category is due as per their notice of assessment.
• Lodge tax return for non-taxable head company of a consolidated group, including a new
registrant, that has a member who has been deemed a large or medium entity in the latest year
lodged.
Lodge tax return for any member of a consolidated group who exits the consolidated group for any
period during the year of income.
• Lodge tax return for large or medium new registrant (non-taxable) head company of a consolidated
group.
• Lodge and pay Self-managed superannuation fund annual return for new registrant (taxable and
non-taxable) SMSF, unless they have been advised of a 31 October 2022 due date at finalisation
of a review of the SMSF at registration.
Note: There are special arrangements for newly registered SMSFs that do not have to lodge a
return – see Super lodgment.
• Lodge and pay quarter 2, 2022–23 activity statement for all lodgment methods.
• Pay quarter 2, 2022–23 instalment notice (form R, S or T). Lodge the notice only if you vary the
instalment amount.
• Annual GST return – lodge (and pay if applicable) if the taxpayer does not have a tax return
lodgment obligation.
• If the taxpayer does have a tax return obligation, this return must be lodged by the due date of the
tax return.
• Lodge and pay quarter 2, 2022–23 Superannuation guarantee charge statement if the employer
did not pay enough contributions on time.
Employers lodging a Superannuation guarantee charge statement can choose to offset
contributions they paid late to a fund against their super guarantee charge for the quarter. They
still have to pay the remaining super guarantee charge.
Note: The super guarantee charge is not tax deductible.
Use our Super guarantee charge statement and calculator tool to work out the super guarantee
charge and prepare the Superannuation guarantee charge statement