Can an Employer Contribute to a Non-resident Fund?

One of our clients has a multi-national company as a client.  This company has seconded an executive to Australia from the USA for a few years.  He is resident here, but has his own 401K pension plan in the States.  The question was whether or not his Australian employer could make its superannuation contributions to his overseas plan.

Unfortunately, the answer is, “No.”   In order to be claimed as a deduction (and to meet superannuation guarantee commitments), a superannuation contribution must be made to a “complying” superannuation fund.  One of the requirements for a fund to be complying is that it is resident in Australia.    Therefore, a contribution to a non-resident fund would not be deductible and would not meet the employer’s superannuation guarantee obligations.   However, it gets worse, because such a contribution would be considered a taxable fringe benefit.

Unfortunately, the answer is, “No.”In order to be claimed as a deduction (and to meet superannuation guarantee commitments), a superannuation contribution must be made to a “complying” superannuation fund.One of the requirements for a fund to be complying is that it is resident in Australia.Therefore, a contribution to a non-resident fund would not be deductible and would not meet the employer’s superannuation guarantee obligations. However, it gets worse, because such a contribution would be considered a taxable fringe benefit.

[Needless to say, our client was glad he called us.]


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