Law Administration Practice Statement PS LA 2026/D1
Administration of penalties for failure to comply with superannuation member account reporting obligations
Date of issue: 12 March 2026
Draft: True
Withdrawn: False

What this draft Practice Statement is about: 1. Super funds, approved deposit funds, retirement savings account providers and some life insurance companies have reporting obligations to the ATO about member accounts. 2. For entities that are not self-managed super funds, these reporting obligations are required to be met using the member account attribute service (MAAS) and member account transaction service (MATS). 3. Super funds [1] that do not report through the MAAS and MATS as required in a timely and accurate manner may be liable to administrative penalties for: • failure to lodge in the approved form by the due date • making false or misleading statements. • failure to lodge in the approved form by the due date • making false or misleading statements. 4. This draft Practice Statement [2] provides guidance on the administration of these penalties. 5. The reporting obligations of self-managed super funds are not within the scope of this Practice Statement. 6. All legislative references in this Practice Statement are to Schedule 1 to the Taxation Administration Act 1953, unless otherwise indicated. | Outline of member account attribute service and member account transaction service reporting: 7. The MAAS and MATS are event-based reporting services used by super funds to report information about their members' super accounts to us. | Member account attribute service forms: 8. A MAAS form is an approved form for the giving of a statement to the Commissioner under section 390-5 and section 390-20. 9. It is used for reporting of changes to a member's account, including opened, updated, and closed accounts and account attributes such as account phases. | Member account transaction service forms: 10. A MATS form is an approved form for providing a statement to the Commissioner under section 390-5 and section 390-20. 11. It is used for event-based reporting of transactions on a member's account, such as the making of contributions. | Importance of timely and accurate reporting: 12. The accuracy and timeliness of member data reported by super funds is critical to the efficient operation of the superannuation system. 13. Incorrect or late reporting can have severe consequences for individual super fund members and can impact decisions they make about their super. 14. Information reported by super funds using the MAAS and MATS is: • displayed to individuals through ATO online services to assist them in making decisions about their tax position and super affairs • used to administer tax and super regimes that apply to individuals, including – income tax – excess concessional contributions – excess non-concessional contributions and excess non-concessional contributions tax – Division 293 tax – the transfer balance cap and excess transfer balance tax – the first home super saver scheme • used in conjunction with Single Touch Payroll reporting to identify compliance issues that may affect individuals' super, such as employers who do not make super guarantee contributions sufficient to avoid liability to the superannuation guarantee charge. • displayed to individuals through ATO online services to assist them in making decisions about their tax position and super affairs • used to administer tax and super regimes that apply to individuals, including – income tax – excess concessional contributions – excess non-concessional contributions and excess non-concessional contributions tax – Division 293 tax – the transfer balance cap and excess transfer balance tax – the first home super saver scheme • used in conjunction with Single Touch Payroll reporting to identify compliance issues that may affect individuals' super, such as employers who do not make super guarantee contributions sufficient to avoid liability to the superannuation guarantee charge. – income tax – excess concessional contributions – excess non-concessional contributions and excess non-concessional contributions tax – Division 293 tax – the transfer balance cap and excess transfer balance tax – the first home super saver scheme 15. Under the law, the liability for penalties associated with member account reporting obligations applies at an individual member level – that is, a failure to lodge in the approved form or a false or misleading statement in respect of each member of the fund will potentially attract a separate penalty. This in part reflects the importance of timely and accurate reporting for each individual member. 16. Accordingly, where the circumstances giving rise to the incorrect or late reporting impact multiple members in the same way and it is determined a penalty is to apply, the amount of the penalty will reflect this number of members. It will be particularly important in these cases to consider penalty remission, balancing the impact of the incorrect or late reporting on each individual member with the circumstances giving rise to the liability. | Process to follow when raising penalties: 17. You should follow this 5-step process when you are raising penalties against a super fund for failing to comply with their member account reporting obligations: 1. Determine the type of penalty that is applicable to the circumstances. 2. Consider whether the law protects the super fund from penalties in the circumstances. 3. Determine the extent and amount of penalty. 4. Consider penalty remission. 5. Issue written notice of the penalty. 1. Determine the type of penalty that is applicable to the circumstances. 2. Consider whether the law protects the super fund from penalties in the circumstances. 3. Determine the extent and amount of penalty. 4. Consider penalty remission. 5. Issue written notice of the penalty. 18. The process is designed to accommodate the principles of this and other relevant Practice Statements and to ensure super funds receive like treatment as much as practicable. 19. You must have collected all relevant information and document the evidence and basis for any penalty decision you make. Examples illustrating this process can be found in Appendix D to this Practice Statement. | Step 1 – determine the type of penalty that is applicable to the circumstances: 20. It is important to identify which penalties may apply in the circumstances of a case, as different penalties apply in relation to different behaviours and those penalties have different rules and calculation methods. Penalties for failure to lodge in the approved form by the due date 21. There are 2 kinds of conduct that can cause a super fund to become liable to an administrative penalty for failing to lodge in the approved form by the due date: • failure to lodge MAAS or MATS reporting by the due date [3] • lodging, but failing to do so in the approved form. • failure to lodge MAAS or MATS reporting by the due date [3] • lodging, but failing to do so in the approved form. 22. MAAS or MATS reporting is in the approved form if, and only if [4] : • it is in the form approved in writing by the Commissioner • it contains a declaration signed by a person, or persons, as the form requires [5] • it contains the information that the form requires, and any further information, statement or document as we require, whether in the form or otherwise • it is given in the manner that we require. • it is in the form approved in writing by the Commissioner • it contains a declaration signed by a person, or persons, as the form requires [5] • it contains the information that the form requires, and any further information, statement or document as we require, whether in the form or otherwise • it is given in the manner that we require. 23. The approved form for MAAS or MATS reporting may be updated by creating a new version from time to time to account for changes in: • the law • the way we use information reported through the MAAS or MATS, or • the information we require in order to administer tax and super laws. • the law • the way we use information reported through the MAAS or MATS, or • the information we require in order to administer tax and super laws. 24. Generally, when a new version of the approved form for MAAS or MATS reporting is created, a super fund will be required to begin using the new version unless they have been given approval to remain using the superseded version for a transitional period. 25. A super fund that does not begin using the new version of the approved form for their MAAS or MATS reporting and does not have approval to remain using the superseded version (or had approval for a period which has expired) has failed to lodge in the approved form and will be liable to an administrative penalty. This is the case even if they continue to lodge MAAS or MATS reporting using the superseded version. False or misleading statement penalties 26. A super fund is liable to an administrative penalty if they make a statement in their MAAS or MATS reporting that is false or misleading in a material particular. [6] 27. A statement is false when it is incorrect, or not according to truth or fact. 28. A statement is misleading when it gives the wrong idea or impression. 29. A statement may be either false or misleading because of something included in the statement or because of something omitted from it. 30. For a particular to be 'material', it must have a connection to the purpose for which the statement is made, but it does not have to be something that must, or actually will, be taken into account in making a decision. 31. The following Practice Statements provide further information about the meaning of the terms 'false', 'misleading' and 'material particular': • Law Administration Practice Statement PS LA 2012/4 Administration of the false or misleading statement penalty – where there is no shortfall amount • Law Administration Practice Statement PS LA 2012/5 Administration of the false or misleading statement penalty – where there is a shortfall amount. • Law Administration Practice Statement PS LA 2012/4 Administration of the false or misleading statement penalty – where there is no shortfall amount • Law Administration Practice Statement PS LA 2012/5 Administration of the false or misleading statement penalty – where there is a shortfall amount. 32. A super fund may make several false or misleading statements in the same document and is liable to a penalty in relation to each statement. For example, a super fund that makes a false or misleading statement in relation to both the type and amount of a contribution received has made 2 statements and will be liable to 2 administrative penalties. | Step 2 – consider whether the law protects the super fund from penalties in the circumstances: 33. In limited circumstances, the law protects a super fund from the penalties covered in this Practice Statement. You must determine whether these protections apply before proceeding. Reasonable care 34. A super fund will not be liable to a false or misleading statement penalty where they and their agent (if relevant) took reasonable care in connection with making the statement. [7] 35. When assessing a super fund's behaviour in making a statement, you must consider the actions and behaviours at the time the statement was made. Miscellaneous Taxation Ruling MT 2008/1 Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard provides guidelines for determining whether an entity took reasonable care. While 'reasonable care' is described briefly in this section, you must consult and follow MT 2008/1. 36. The 'reasonable care test' requires a super fund to make a reasonable and genuine attempt to comply with obligations imposed under legislative requirements. This means considering actions leading up to the making of the statement. 37. Making a genuine attempt means that the super fund was actively engaged with the superannuation system and actively attempting to comply with their reporting obligations. When considering if a genuine attempt has been made, we compare the super fund's attempt with that of other entities in similar circumstances. 38. We are looking for evidence that the super fund's attempt to comply is within the standard of care reasonably expected, considering all relevant circumstances. 39. This may mean that, in some circumstances, a higher standard of care may need to be demonstrated. For example, when a significant event occurs (such as transfer to a new administrator or fund administration system), a higher standard of care would be reasonably expected considering the potential impact of those events to the super fund's reporting. 40. The effort required is one commensurate with the super fund's circumstances, including their knowledge, education, experience and skill. [8] 41. The following factors are relevant when assessing reasonable care: • if there was an inadvertent mistake – if reasonable enquiries were made, including whether the super fund conducted a level of enquiry commensurate with the risk of the decision and their resources, or – the super fund just assumed the statement was correct • whether the super fund was aware, or should have been aware, of the correct treatment of the law or of the facts, noting a super fund – should not rely on advice they have received where a reasonable person would be expected to know, or strongly suspect, the advice is not worthy of such reliance – is not obliged or entitled to accept assurance by their professional adviser where statements appear flawed or questionable • whether any factors prevented the super fund from seeking advice, understanding the requirements of the tax law or reporting correctly, and • whether the super fund's level of knowledge, understanding of the tax and superannuation systems or circumstances impacted their compliance, considering the – super fund's level of sophistication relating to superannuation reporting matters – level of knowledge, education, experience and skills of relevant persons involved with the super fund – governance arrangements and compliance assurance processes of the super fund – frameworks the super fund has in place to ensure compliance of any outsourced functions. • if there was an inadvertent mistake – if reasonable enquiries were made, including whether the super fund conducted a level of enquiry commensurate with the risk of the decision and their resources, or – the super fund just assumed the statement was correct • whether the super fund was aware, or should have been aware, of the correct treatment of the law or of the facts, noting a super fund – should not rely on advice they have received where a reasonable person would be expected to know, or strongly suspect, the advice is not worthy of such reliance – is not obliged or entitled to accept assurance by their professional adviser where statements appear flawed or questionable • whether any factors prevented the super fund from seeking advice, understanding the requirements of the tax law or reporting correctly, and • whether the super fund's level of knowledge, understanding of the tax and superannuation systems or circumstances impacted their compliance, considering the – super fund's level of sophistication relating to superannuation reporting matters – level of knowledge, education, experience and skills of relevant persons involved with the super fund – governance arrangements and compliance assurance processes of the super fund – frameworks the super fund has in place to ensure compliance of any outsourced functions. – if reasonable enquiries were made, including whether the super fund conducted a level of enquiry commensurate with the risk of the decision and their resources, or – the super fund just assumed the statement was correct – should not rely on advice they have received where a reasonable person would be expected to know, or strongly suspect, the advice is not worthy of such reliance – is not obliged or entitled to accept assurance by their professional adviser where statements appear flawed or questionable – super fund's level of sophistication relating to superannuation reporting matters – level of knowledge, education, experience and skills of relevant persons involved with the super fund – governance arrangements and compliance assurance processes of the super fund – frameworks the super fund has in place to ensure compliance of any outsourced functions. Grace periods 42. Subsection 284-75(9) provides that an entity is not liable to a false or misleading statement penalty if they correct a false or misleading statement made in their MAAS or MATS reporting within the prescribed period. [9] This period is called a grace period. 43. There is currently no grace period that has been prescribed, meaning a super fund is not able to take advantage of a grace period. Safe harbours 44. Legislative safe harbours protect a super fund from being liable to a penalty because of the actions of their registered tax or BAS agent. 45. In relation to penalties for failing to lodge in the approved form by the due date, the safe harbour [10] applies where all of the following apply: • the super fund provided all relevant information to the registered agent to enable the document to be lodged on time (noting that the onus is on the super fund to prove that they met this requirement) [11] • the registered agent does not lodge the document on time, and • the failure to lodge on time was not due to either – intentional disregard of a taxation law by the registered agent, or – recklessness by the registered agent as to the operation of a taxation law. • the super fund provided all relevant information to the registered agent to enable the document to be lodged on time (noting that the onus is on the super fund to prove that they met this requirement) [11] • the registered agent does not lodge the document on time, and • the failure to lodge on time was not due to either – intentional disregard of a taxation law by the registered agent, or – recklessness by the registered agent as to the operation of a taxation law. – intentional disregard of a taxation law by the registered agent, or – recklessness by the registered agent as to the operation of a taxation law. 46. In relation to false or misleading statement penalties, each statement must be considered separately and the safe harbour [12] applies where both of the following apply: • the super fund gave all the relevant information to the agent necessary for the statement to be correctly prepared, and • the agent did not act recklessly or with intentional disregard of the law. • the super fund gave all the relevant information to the agent necessary for the statement to be correctly prepared, and • the agent did not act recklessly or with intentional disregard of the law. 47. This means the safe harbour exception applies only where the agent has failed to take reasonable care. 48. Super funds that engage the services of third-party administrators are not protected from penalties by the safe harbours for the actions of the administrator, unless the third-party administrator is also a registered tax or BAS agent. 49. If you determine that a safe harbour does not apply in the circumstances, you can still consider if the circumstances warrant remission of the penalty. 50. More information to assist you in determining whether a safe harbour is relevant in the circumstances can be found: • for penalties for failing to lodge in the approved form by the due date, in Law Administration Practice Statement PS LA 2011/19 Administration of the penalty for failure to lodge on time • for false or misleading statement penalties, in PS LA 2012/4 (where there is no shortfall amount) or PS LA 2012/5 (where there is a shortfall amount). • for penalties for failing to lodge in the approved form by the due date, in Law Administration Practice Statement PS LA 2011/19 Administration of the penalty for failure to lodge on time • for false or misleading statement penalties, in PS LA 2012/4 (where there is no shortfall amount) or PS LA 2012/5 (where there is a shortfall amount). | Step 3 – determine the extent and amount of penalty: 51. The key considerations when applying a penalty are: • where penalties for failure to lodge in the approved form by the due date are applicable in the circumstances – deciding whether, and to what extent, to apply penalties • where false or misleading statement penalties are applicable in the circumstances – deciding whether, and to what extent, to assess penalties • calculating the penalty amounts. • where penalties for failure to lodge in the approved form by the due date are applicable in the circumstances – deciding whether, and to what extent, to apply penalties • where false or misleading statement penalties are applicable in the circumstances – deciding whether, and to what extent, to assess penalties • calculating the penalty amounts. 52. Appendix A to this Practice Statement covers these considerations in relation to penalties for failure to lodge in the approved form by the due date. 53. Appendix B to this Practice Statement covers these considerations in relation to false or misleading statement penalties. | Step 4 – consider penalty remission: 54. Remission allows us to adjust the penalty to match the observed behaviour or particular circumstances of a case, offering administrative flexibility. 55. We have the discretion to remit all or part of the penalty. [13] Our discretion to remit is unfettered, meaning there's no legal restriction on when we can remit. 56. Remission decisions you make need to balance: • the purpose of the penalty regime to encourage entities to take reasonable care in complying with the tax and super obligations and promote consistent treatment between entities in similar circumstances • producing a fair, just and proportionate outcome taking into account the super fund's circumstances. • the purpose of the penalty regime to encourage entities to take reasonable care in complying with the tax and super obligations and promote consistent treatment between entities in similar circumstances • producing a fair, just and proportionate outcome taking into account the super fund's circumstances. 57. A remission decision should be made for every penalty decision, even if that decision is that there are no grounds for penalty remission. 58. You must follow the 4-step penalty remission process outlined in Appendix C to this Practice Statement when deciding on remission of penalties relating to the superannuation member account reporting obligations covered by this Practice Statement. | Step 5 – issue written notice of the penalty: 59. When a penalty remains payable (for example, because it was not remitted in full), we must send a written notice to the super fund that includes [14] : • their liability to pay the penalty, after any reductions or remissions • the reasons why they are liable for the penalty • if the penalty has not been fully remitted, why it has not been fully remitted. • their liability to pay the penalty, after any reductions or remissions • the reasons why they are liable for the penalty • if the penalty has not been fully remitted, why it has not been fully remitted. 60. The penalty is payable on the day specified in the notice (which must be at least 14 days after the notice is given). [15] Penalties for failing to lodge in the approved form by the due date 61. Notice of the penalty may be given before or after the super fund has lodged the relevant MAAS or MATS reporting in the approved form. If it is given before, we can later increase the penalty (up to the statutory maximum) either when the reporting is lodged, or if it remains unlodged. [16] False or misleading statement penalties 62. When a penalty is assessed, we must provide reasons for the decisions, detailing the findings on key facts and referring to the evidence or other material facts those findings are based on. These reasons should be given to the super fund along with, or before, the penalty notice. If that's not possible, it should be done as soon as possible after notifying them of the penalty. | More information: 63. For more information, see: • Miscellaneous Taxation Ruling MT 2008/1 Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard • Miscellaneous Taxation Ruling MT 2012/3 Administrative penalties: voluntary disclosures • Law Administration Practice Statement PS LA 2008/3 Provision of advice and guidance by the ATO • Law Administration Practice Statement PS LA 2011/15 Lodgment obligations, due dates and deferrals • Law Administration Practice Statement PS LA 2011/19 Administration of the penalty for failure to lodge on time • Law Administration Practice Statement PS LA 2012/4 Administration of the false or misleading statement penalty – where there is no shortfall amount • Law Administration Practice Statement PS LA 2012/5 Administration of the false or misleading statement penalty – where there is a shortfall amount. • Miscellaneous Taxation Ruling MT 2008/1 Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard • Miscellaneous Taxation Ruling MT 2012/3 Administrative penalties: voluntary disclosures • Law Administration Practice Statement PS LA 2008/3 Provision of advice and guidance by the ATO • Law Administration Practice Statement PS LA 2011/15 Lodgment obligations, due dates and deferrals • Law Administration Practice Statement PS LA 2011/19 Administration of the penalty for failure to lodge on time • Law Administration Practice Statement PS LA 2012/4 Administration of the false or misleading statement penalty – where there is no shortfall amount • Law Administration Practice Statement PS LA 2012/5 Administration of the false or misleading statement penalty – where there is a shortfall amount. | Deciding whether and to what extent a penalty should be applied: 64. Overall, you should seek to apply the penalty for failure to lodge in the approved form by the due date in such a way as to improve lodgment behaviours. 65. PS LA 2011/19 [17] outlines that the penalty will be applied if the failure to lodge: • places the efficient operation of the taxation and superannuation systems at risk • provides a benefit or advantage to the late or non-lodger over the general community, or • erodes community confidence in the taxation and superannuation systems. • places the efficient operation of the taxation and superannuation systems at risk • provides a benefit or advantage to the late or non-lodger over the general community, or • erodes community confidence in the taxation and superannuation systems. 66. Superannuation member account reporting is characterised by both its high frequency and the significance it holds for individuals in effectively managing their tax and super affairs. Where this reporting is not lodged in the approved form by the due date, it may be viewed as undermining the efficient functioning of Australia's tax and superannuation systems and may diminish public confidence in its integrity. Accordingly, you generally should decide to apply a penalty if a super fund is liable to it – noting that it may be remitted (see paragraphs 54 to 58 and Appendix C to this Practice Statement). 67. However, it may be appropriate to decide not to apply a penalty in some circumstances, taking into account: • the compliance history of the super fund • the effort it took to obtain lodgment • the value of the information to be disclosed in the taxation document • whether the super fund is aware of their lodgment obligation and the consequences of not meeting that obligation • whether the super fund has had an opportunity to comply • the length of time the taxation document was overdue • any contact the super fund or their representative may have had with us prior to the due date for lodgment. • the compliance history of the super fund • the effort it took to obtain lodgment • the value of the information to be disclosed in the taxation document • whether the super fund is aware of their lodgment obligation and the consequences of not meeting that obligation • whether the super fund has had an opportunity to comply • the length of time the taxation document was overdue • any contact the super fund or their representative may have had with us prior to the due date for lodgment. This list is not exhaustive. 68. For example, it may be appropriate to decide not to apply a penalty where a super fund has failed to lodge in the approved form by the due date and: • the reporting has now been lodged with minimal delay • you are satisfied that it is an isolated incident • the super fund has a good compliance history • the super fund has demonstrated that they have taken steps to prevent the failure occurring again. • the reporting has now been lodged with minimal delay • you are satisfied that it is an isolated incident • the super fund has a good compliance history • the super fund has demonstrated that they have taken steps to prevent the failure occurring again. 69. Where you decide it is appropriate not to apply a penalty, you must document your decision on the taxpayer's account. | Multiple simultaneous failures: 70. A super fund that is required to report through the MAAS or MATS may be required to report multiple events on the same day (for example, because an account has been opened and a contribution has been allocated to that account on the same day). 71. Each event gives rise to a separate requirement to report, and each event that a super fund fails to report as required in the approved form by the due date results in them becoming liable to a penalty. For example, where an account is opened and a contribution is allocated to that account on the same day, a super fund is required to report using the MAAS that an account has been opened, and using the MATS that a contribution has been allocated. If the super fund does not lodge this reporting, they will be liable to 2 penalties. 72. This principle, where a penalty can apply for each obligation a super fund fails to meet, is particularly important because: • Failure to lodge MAAS or MATS reporting affects the ability of each member about whom information is being reported to manage and meet their own tax obligations. • It ensures the level of penalty that may apply reflects the culpability of the super fund failing to report – that is, it means a super fund that fails to lodge MAAS or MATS reporting for 100 reportable events may receive a penalty that is larger than a super fund that fails to lodge once. • Failure to lodge MAAS or MATS reporting affects the ability of each member about whom information is being reported to manage and meet their own tax obligations. • It ensures the level of penalty that may apply reflects the culpability of the super fund failing to report – that is, it means a super fund that fails to lodge MAAS or MATS reporting for 100 reportable events may receive a penalty that is larger than a super fund that fails to lodge once. 73. Where you are making a decision about applying penalties for multiple related events, you should consider whether it is fair and reasonable to do so in totality, taking into account: • the super fund's compliance history • the impact of the failure on the tax and superannuation systems • the super fund's previous pattern of failing to lodge through the MAAS or MATS in the approved form by the due date • any prior contact with the super fund (or their representative) about their failure to comply with their MAAS or MATS obligations • whether applying multiple penalties in the circumstances produces an unfair, unjust or disproportionate result. • the super fund's compliance history • the impact of the failure on the tax and superannuation systems • the super fund's previous pattern of failing to lodge through the MAAS or MATS in the approved form by the due date • any prior contact with the super fund (or their representative) about their failure to comply with their MAAS or MATS obligations • whether applying multiple penalties in the circumstances produces an unfair, unjust or disproportionate result. 74. Absence of a prior warning from us to the super fund does not prevent you from applying penalties in relation to multiple MAAS or MATS reports that were due on the same day if it is fair, reasonable and just in the circumstances to do so. 75. However, only one penalty applies in relation to a specific event. For example, where a super fund reports that an account has been opened after the due date, but also fails to do so in the approved form, only one penalty applies in relation to that reporting. | Calculating the penalty for failing to lodge in the approved form by the due date: 76. The penalty is calculated in 2 stages [18] : • The base penalty amount (BPA) is calculated. • The BPA is increased if the entity size tests are satisfied. • The base penalty amount (BPA) is calculated. • The BPA is increased if the entity size tests are satisfied. | Base penalty amount: 77. The BPA is one penalty unit [19] for every 28 days (or part thereof) after the due date that the super fund has failed to lodge in the approved form, up to a maximum of 5 penalty units. [20] 78. The due dates for MAAS reporting [21] are outlined in Table 1 of this Practice Statement. Table 1: Due dates for MAAS reporting Scenario Due date The super fund is reporting that an account has been opened or life insurance policy first held MAAS reporting is due on or before 5 business days after the account was opened or life insurance policy first held. The super fund is reporting that there has been a change to account phases or attributes relating to the account or policy (or both) MAAS reporting is due on or before 5 business days after the change. 79. The due dates for MATS reporting [22] are outlined in the Table 2 of this Practice Statement. Table 2: Due dates for MATS reporting Scenario Due date The super fund is reporting employer contributions MATS reporting is due on or before 10 business days after the day the contribution amount is allocated to the member's account. The super fund is reporting non-employer transactions MATS reporting is due on or before 10 business days after the day the transaction amount is allocated to the member's account. The super fund is reporting retirement phase events MATS reporting is due on or before 10 business days after the day the event occurs. The super fund is reporting acknowledgments of valid notices of intent to claim a personal superannuation contribution deduction MATS reporting is due on or before 10 business days after the day the notice is acknowledged. The super fund is reporting member contribution balance amounts MATS reporting is due on or before 31 October following the end of the financial year to which the amount relates. 80. The BPA is calculated from the due date of the relevant MAAS or MATS reporting to the date before it is received in the approved form. | Increasing the base penalty amount: 81. The BPA is multiplied by 2 if the super fund [23] : • is a medium withholder in the month the MAAS or MATS reporting was due [24] • has an assessable income for the income year in which the MAAS or MATS reporting was due of more than $1 million but less than $20 million, or • has a current GST turnover of more than $1 million but less than $20 million in the month the MAAS or MATS reporting was due. • is a medium withholder in the month the MAAS or MATS reporting was due [24] • has an assessable income for the income year in which the MAAS or MATS reporting was due of more than $1 million but less than $20 million, or • has a current GST turnover of more than $1 million but less than $20 million in the month the MAAS or MATS reporting was due. 82. The BPA is multiplied by 5 if the super fund [25] : • is a large withholder in the month the MAAS or MATS reporting was due [26] • has an assessable income for the income year in which the MAAS or MATS reporting was due of $20 million or more, or • has a current GST turnover of $20 million or more in the month the MAAS or MATS reporting was due. • is a large withholder in the month the MAAS or MATS reporting was due [26] • has an assessable income for the income year in which the MAAS or MATS reporting was due of $20 million or more, or • has a current GST turnover of $20 million or more in the month the MAAS or MATS reporting was due. 83. The BPA is multiplied by 500 if the super fund is a significant global entity (SGE). [27] An entity is an SGE according to the most recent income tax assessment. [28] 84. If we do not have current information to apply all 3 size tests, you should use the super fund's withholder status or assessable income to determine their size, whichever results in the higher penalty. 85. Where it is determined that the penalty amount does not reflect the actual size of the super fund, the following actions will occur: • The penalty notice will be cancelled. • A new notice using the correct rate of penalty and reasons for the imposition and calculation will be provided to the super fund. • The penalty notice will be cancelled. • A new notice using the correct rate of penalty and reasons for the imposition and calculation will be provided to the super fund. | Deciding whether, and to what extent, a penalty should be assessed: 86. It is not administratively appropriate, nor is it necessary, to consider applying the false or misleading statement penalty to every potentially false or misleading statement. 87. Instead, when deciding whether or not to assess a penalty, you should consider the significance of the false or misleading statement to the integrity of the tax and superannuation systems. 88. For example: • A statement by a super fund that provides an incorrect date of birth for a member, where there was otherwise sufficient information to identify the individual it relates to, is unlikely to be significant enough to warrant assessment of a penalty. • A statement by a super fund that a large employer super guarantee contribution has been made, when in fact it was a downsizer contribution (which has significantly different tax treatment for an individual), is likely to be significant enough to warrant assessment of a penalty. • A statement by a super fund that provides an incorrect date of birth for a member, where there was otherwise sufficient information to identify the individual it relates to, is unlikely to be significant enough to warrant assessment of a penalty. • A statement by a super fund that a large employer super guarantee contribution has been made, when in fact it was a downsizer contribution (which has significantly different tax treatment for an individual), is likely to be significant enough to warrant assessment of a penalty. 89. Where you determine that the false or misleading statement does have significance to the integrity of the tax and superannuation systems, you should generally proceed to assess the penalty– noting that it may be remitted (see paragraphs 54 to 58 and Appendix C to this Practice Statement). | Multiple false or misleading statements with a common source: 90. The event or transactional nature of MAAS or MATS reporting means that some circumstances, such as systems or process issues, may result in a super fund making multiple false or misleading statements of essentially the same nature – a particular may be repeatedly false or misleading in the same way, as a result of each statement having a common source. 91. Each statement that is false or misleading results in the super fund becoming liable to a penalty. For example, if a system issue results in false or misleading reporting about the same particular 5 times, the super fund will be liable to 5 penalties. 92. This is an important reflection of the importance MAAS and MATS reporting has to the operation of the tax and super systems because: • incorrect MAAS or MATS reporting lodged by a super fund can have tax consequences for members and this is exacerbated where multiple members are affected • members relying on the information provided by their super fund may be misled into actions that they were not able to validly take or which have detrimental effects, and • it ensures the level of penalty that may apply reflects the culpability of the super fund – that is, it means a super fund that makes a false or misleading statement 100 times may receive a penalty that is larger than a super fund that only does so once. • incorrect MAAS or MATS reporting lodged by a super fund can have tax consequences for members and this is exacerbated where multiple members are affected • members relying on the information provided by their super fund may be misled into actions that they were not able to validly take or which have detrimental effects, and • it ensures the level of penalty that may apply reflects the culpability of the super fund – that is, it means a super fund that makes a false or misleading statement 100 times may receive a penalty that is larger than a super fund that only does so once. 93. However, where you are making a decision about applying penalties for multiple related statements, you should consider whether it is fair and reasonable to do so in totality, taking into account: • the super fund's compliance history • the impact of the failure on the tax and superannuation systems • the super fund's previous pattern of accurate reporting through the MAAS or MATS • any prior contact with the super fund (or their representative) about their failure to comply with their MAAS or MATS obligations • whether applying multiple penalties in the circumstances produces an unfair, unjust or disproportionate result. • the super fund's compliance history • the impact of the failure on the tax and superannuation systems • the super fund's previous pattern of accurate reporting through the MAAS or MATS • any prior contact with the super fund (or their representative) about their failure to comply with their MAAS or MATS obligations • whether applying multiple penalties in the circumstances produces an unfair, unjust or disproportionate result. 94. Absence of a prior warning from the ATO does not prevent you from applying penalties in relation to multiple statements if it is fair, reasonable and just in the circumstances to do so. | Calculating the false or misleading statement penalty: 95. To assess the penalty amount: • assess the super fund's behaviour to determine the amount of the BPA • increase or reduce the BPA (or both). • assess the super fund's behaviour to determine the amount of the BPA • increase or reduce the BPA (or both). | Assessing the super fund's behaviour in making the statement: 96. When assessing the super fund's behaviour in making the statement, we consider the actions and behaviours at the time the statement was made. The guidelines for determining the behaviour are in MT 2008/1. They are described briefly in the remaining paragraphs of this Practice Statement, but you must consult and follow MT 2008/1. 97. Actions and behaviours after the statement are not relevant in working out the BPA. | Failure to take reasonable care: 98. Failure to take reasonable care occurs where reasonable care has not been taken in connection with making the statement, but the super fund or their agent has not been reckless or intentionally disregarded the law. | Recklessness: 99. Recklessness is when a super fund behaves far below the standard of care expected of a reasonable person in similar circumstances. It's essentially extreme carelessness. Recklessness means a super fund shows a disregard for risks or indifference to consequences that could reasonably be foreseen. However, the super fund doesn't need to actually realise the risk for their behaviour to be considered reckless. | Intentional disregard: 100. Intentional disregard of the law means more than just being reckless or indifferent to a tax law. The super fund must actually know the statement is false. They must understand the relevant legislation, how it applies to their situation, and then choose to ignore the law deliberately. | Amount of the penalty: 101. The BPA is calculated by: • assessing the super fund's behaviour in making the statement • reducing the BPA to the extent that the super fund applied a taxation law in an accepted way. • assessing the super fund's behaviour in making the statement • reducing the BPA to the extent that the super fund applied a taxation law in an accepted way. 102. The initial BPA is based on the assessment of the super fund's behaviour and whether or not there is a shortfall amount. A shortfall amount is the amount by which: • a tax-related liability is less than it would have been if the statement were not false or misleading, or • a payment or credit that we must make under a taxation law is more than it would have been if the statement were not false or misleading. • a tax-related liability is less than it would have been if the statement were not false or misleading, or • a payment or credit that we must make under a taxation law is more than it would have been if the statement were not false or misleading. 103. While a super fund relying on advice we provided is highly likely to have taken reasonable care (and therefore will not be liable to a penalty), even if reasonable care has not been taken, the BPA is reduced to the extent that the super fund applied the law in an accepted way that agreed with: • advice given to them by or on behalf of us • our general administrative practice • a statement in a publication approved in writing by the Commissioner. • advice given to them by or on behalf of us • our general administrative practice • a statement in a publication approved in writing by the Commissioner. 104. Subsection 284-90(1) provides the initial BPA as shown in Table 3 of this Practice Statement [29] : Table 3: Base penalty amount Situation Where there is a shortfall amount Where there is no shortfall amount Intentional disregard of a taxation law by the super fund or their agent BPA is 75% of the shortfall amount BPA is 60 penalty units Recklessness by the super fund or their agent as to the operation of a taxation law BPA is 50% of the shortfall amount BPA is 40 penalty units Failure by the super fund or their agent to take reasonable care to comply with a taxation law BPA is 25% of the shortfall amount BPA is 20 penalty units 105. If the super fund is an SGE, the BPA amount is doubled. A super fund's status as an SGE must be worked out on the day the statement was made and is based upon the most recent income year for which an income tax assessment has been made for the super fund or a determination by us that the super fund is an SGE at the date of the statement. | Increasing or reducing the base penalty amount: 106. In certain instances, the BPA is increased or reduced, using the following formula: BPA + [BPA × (increase % - reduction %)] BPA + [BPA × (increase % - reduction %)] | Increasing the base penalty amount: 107. The BPA is increased by 20% where the super fund [30] : • prevents or obstructs us from finding out about the false or misleading nature of the statement • becomes aware of the false or misleading nature of the statement after the statement is made and does not tell us about it within a reasonable time, or • had a BPA worked out for this type of penalty previously, even if the penalty was remitted. • prevents or obstructs us from finding out about the false or misleading nature of the statement • becomes aware of the false or misleading nature of the statement after the statement is made and does not tell us about it within a reasonable time, or • had a BPA worked out for this type of penalty previously, even if the penalty was remitted. 108. The increase is a maximum of 20%, even if more than one of the criteria in paragraph 107 of this Practice Statement applies. | Increasing the base penalty amount – prevent or obstruct: 109. Examples of what would constitute preventing or obstructing us would include where the super fund, without an acceptable reason: • repeatedly defers or fails to keep appointments • repeatedly fails to supply information • repeatedly fails to respond adequately to reasonable requests for information, such as – by not replying to the request for information – giving information that is not relevant – not addressing all the issues in the request, or – supplying inadequate information • fails to respond to formal information-gathering notices • provides incorrect information or fraudulently prepares documents in support of statements (although these may also be further false or misleading statements), or • destroys records. • repeatedly defers or fails to keep appointments • repeatedly fails to supply information • repeatedly fails to respond adequately to reasonable requests for information, such as – by not replying to the request for information – giving information that is not relevant – not addressing all the issues in the request, or – supplying inadequate information • fails to respond to formal information-gathering notices • provides incorrect information or fraudulently prepares documents in support of statements (although these may also be further false or misleading statements), or • destroys records. – by not replying to the request for information – giving information that is not relevant – not addressing all the issues in the request, or – supplying inadequate information 110. You should also note the use of the term 'repeatedly' when considering increases for prevention or obstruction. Simply not replying to a letter or not returning a call does not indicate the super fund is taking steps to prevent or obstruct us. [31] It will also not be obstruction where the incorrect information or the failure to provide information was the result of the taxpayer not understanding the request. 111. We expect that where legal professional privilege (LPP) claims are made, they are made properly. [32] Claims of LPP will not generally be considered to be obstructive. However, if you discover that claims were unjustified, you should consider if they were made to obstruct us. | Increasing the base penalty amount – previous penalty: 112. The BPA is increased by 20% where the super fund has a previous penalty of the same type as the penalty being assessed. For false or misleading statements which do not result in a shortfall amount, the previous penalty must also have been for a false or misleading statement which did not result in a shortfall amount. 113. The increase will apply regardless of whether the previous penalty was assessed during a previous interaction, or whether it occurs on the same day. This means that, where you assess multiple penalties of the same type at the same time, the increase will apply to the second and subsequent statements. 114. The order of the statements is determined by the date on which they were made, not the period to which they relate. | Reducing the base penalty amount for voluntary disclosure: 115. The BPA can be reduced in certain circumstances where a super fund voluntarily discloses the false or misleading statement, if they do so in 'the approved form'. [33] 116. You must refer to MT 2012/3 when making any decision regarding voluntary disclosure and the rates of penalty reduction applicable in certain situations. [34] 117. A voluntary disclosure must meet the requirements of the approved form. 118. The approved form sets out a list of the information required for the super fund to make that disclosure. This includes an identification of the statement and an explanation of its false or misleading nature. 119. Generally, the actual form and structure used is irrelevant, as long as the super fund provides the required information through an acceptable mechanism. You can find full details of the information required and the methods or mechanisms available to make a voluntary disclosure at How to make a voluntary disclosure . 120. In working out if a voluntary disclosure has been made, it is important to recognise that a super fund making a genuine attempt to inform us of a mistake may not be fully aware of all the information we require. 121. If the disclosure fails to meet the strict requirements of the approved form, but substantially complies with the requirements, and you can accurately determine the nature of the false or misleading statement from the information provided, the disclosure should be treated as meeting the requirements of the approved form. 122. If additional information is sought on an incomplete disclosure and it is provided within a reasonable time, the original incomplete disclosure should be treated as sufficiently complete. 123. The super fund's original disclosure would not be regarded as constituting a voluntary disclosure if the facts or reasonable inferences indicate that the super fund supplied incomplete information in an attempt to obstruct or hinder us from identifying the correct information (that is, the false or misleading nature of the statement), particularly where the degree of incompleteness is significant. [35] | Step 1 – consider remission based on the super fund's attempt to comply with their obligations: 124. Where a super fund has not rectified their failure to comply in a manner that protects them from penalties [36] , it is still appropriate to recognise that some remission is warranted for a super fund that has attempted to comply compared to a super fund that has not. 125. Using Table 4 of this Practice Statement, consider an initial amount of remission based on a super fund's attempt to comply with their superannuation member account reporting obligations using the MAAS or MATS. Table 4: Degree of attempt to comply with obligations Situation Initial remission The super fund lodges in the approved form or corrects a statement which was false or misleading prior to contact from us, less than 3 months after the initial failure to comply with superannuation member account reporting obligations. 90% The super fund lodges in the approved form or corrects a statement which was false or misleading prior to contact from us, more than 3 and less than 9 months after the initial failure to comply with superannuation member account reporting obligations. 80% The super fund lodges in the approved form or corrects a statement which was false or misleading prior to contact from us, more than 9 months after the initial failure to comply with superannuation member account reporting obligations. 60% The super fund lodges in the approved form or corrects a statement which was false or misleading after initial contact from us but before any compliance action. 40% The super fund lodges in the approved form or corrects a statement which was false or misleading after being notified of our compliance action. 25% There is a deliberate failure by the super fund to comply (regardless of whether or not the failure was rectified later), or no attempt to comply by lodging in the approved form or correcting a statement which was false or misleading. 0% | Step 2 – consider increasing or reducing the remission based on the super fund's compliance history: 126. You should consider the super fund's compliance history for both their superannuation member account reporting obligations and obligations under other taxation laws [37] for the 3-year period leading up to the earlier of the day before: • the super fund rectified their failure through lodging in the approved form or correcting a statement that was false or misleading, or • we commenced compliance action (either by phone or in writing). • the super fund rectified their failure through lodging in the approved form or correcting a statement that was false or misleading, or • we commenced compliance action (either by phone or in writing). 127. Your consideration at this step should focus on the super fund's history, not their current failure to meet obligations for which the penalty is being raised. This is because behaviours relating to the current failure (such as obstruction) are already taken into account when determining the BPA. Any additional factors relating to the super fund's current failure that were not taken into account earlier can be considered in Step 3 of this remission process. 128. You should evaluate a super fund's history by reviewing their ATO records, as well as information supplied by the super fund and any other parties. 129. The super fund's superannuation member account reporting compliance history will be given more weight than their compliance history for other taxation laws. When reviewing compliance history, you should focus on: • the number of occasions on which the super fund previously failed to lodge MAAS or MATS reporting in the approved form by the due date or on which it has been identified that statements made in MAAS or MATS reporting were false or misleading • the degree of the super fund's attempt to comply with their MAAS and MATS obligations previously (not including their attempts to comply for the period being considered), and • any shift in behaviour by the super fund that has been subject to previous compliance activity (this may be demonstrated by an improvement or deterioration in their level of engagement and cooperation with us during the compliance activity). • the number of occasions on which the super fund previously failed to lodge MAAS or MATS reporting in the approved form by the due date or on which it has been identified that statements made in MAAS or MATS reporting were false or misleading • the degree of the super fund's attempt to comply with their MAAS and MATS obligations previously (not including their attempts to comply for the period being considered), and • any shift in behaviour by the super fund that has been subject to previous compliance activity (this may be demonstrated by an improvement or deterioration in their level of engagement and cooperation with us during the compliance activity). 130. Previous occasions of failing to comply with superannuation member account reporting obligations that were identified due to our compliance action will reflect a poorer compliance history than those identified via a voluntary disclosure. 131. Depending on a super fund's compliance history, you may provide additional remission or may reduce the level of remission provided by the other steps in this remission process. Generally, the amount of additional remission or reduced remission should not exceed the amounts in Table 5 of this Practice Statement: Table 5: Level of compliance history Level of compliance history Further remission up to good compliance history (noting that 'good' does not have to mean flawless or exceptional) 15% neither good nor poor compliance history No change poor compliance history −15% extremely poor compliance history −30% 132. When considering increasing or reducing the level of remission determined in Step 1, remember that you cannot: • remit more than 100% of the penalty amount • remit less than 0% of the penalty amount (that is, you can decline to grant any remission but you cannot increase the penalty amount to be higher than the law provides). • remit more than 100% of the penalty amount • remit less than 0% of the penalty amount (that is, you can decline to grant any remission but you cannot increase the penalty amount to be higher than the law provides). 133. The following examples illustrate some of the common situations of poor compliance history where a reduction in remission may be appropriate: • The super fund has demonstrated a history or habit of failing to lodge MAAS or MATS reporting or lodging late. • The super fund has demonstrated a history or habit of making false or misleading statements in their MAAS or MATS reporting. • The super fund has previously been subject to compliance activity relating to their MAAS or MATS reporting and has shown no improvement in behaviour. • The super fund has several outstanding lodgments relating to other tax and super obligations. • Evidence indicates that the super fund has previously been disingenuous or deceptive with the information disclosed in their MAAS or MATS reporting (for example, by deliberately disclosing only some information that obscures the true picture). • The super fund has demonstrated a history or habit of failing to lodge MAAS or MATS reporting or lodging late. • The super fund has demonstrated a history or habit of making false or misleading statements in their MAAS or MATS reporting. • The super fund has previously been subject to compliance activity relating to their MAAS or MATS reporting and has shown no improvement in behaviour. • The super fund has several outstanding lodgments relating to other tax and super obligations. • Evidence indicates that the super fund has previously been disingenuous or deceptive with the information disclosed in their MAAS or MATS reporting (for example, by deliberately disclosing only some information that obscures the true picture). 134. The following examples illustrate some of the situations where compliance history is considered extremely poor: • The super fund has repeatedly failed to meet their obligations even after multiple compliance actions by us (for example, where they have been audited more than 3 times previously and were found to have failed to meet their obligations each time). • The super fund has repeatedly attempted to obstruct or hinder compliance action or provided false or misleading statements during compliance action on multiple occasions. • The super fund has repeatedly and deliberately failed to meet their obligations (for example, by failing to correct known issues in their systems or processes which affect the correctness of their reporting). • The super fund has repeatedly failed to meet their obligations even after multiple compliance actions by us (for example, where they have been audited more than 3 times previously and were found to have failed to meet their obligations each time). • The super fund has repeatedly attempted to obstruct or hinder compliance action or provided false or misleading statements during compliance action on multiple occasions. • The super fund has repeatedly and deliberately failed to meet their obligations (for example, by failing to correct known issues in their systems or processes which affect the correctness of their reporting). Step 3 – consider any other mitigating or exacerbating factors that may warrant further increasing or reducing the amount of remission 135. You need to consider all other relevant facts and circumstances to ensure any penalty remaining after your remission decision takes the super fund's circumstances into account. After considering other relevant facts and circumstances, it may be appropriate to: • increase the level of penalty remission (including to full remission) • maintain the level of penalty without further remission • reduce the level of penalty remission. • increase the level of penalty remission (including to full remission) • maintain the level of penalty without further remission • reduce the level of penalty remission. 136. Where you have already taken into account the degree of the super fund's attempt to comply (in Step 1) and the super fund's compliance history (in Step 2), you should not consider these circumstances again at Step 3. 137. For example, a super fund may be found to have a good compliance history at Step 2 due to there being no previous compliance activity. The fact a super fund has not been subject to compliance activity before is not also an 'other mitigating fact or circumstance'. 138. When considering increasing or reducing the level of remission determined in Steps 1 and 2, remember that you cannot: • remit more than 100% of the penalty amount • remit less than 0% of the penalty amount (that is, you can decline to grant any remission but you cannot increase the penalty amount to be higher than the law provides). • remit more than 100% of the penalty amount • remit less than 0% of the penalty amount (that is, you can decline to grant any remission but you cannot increase the penalty amount to be higher than the law provides). 139. A penalty should not be remitted at Step 3 merely because the penalty may be 'relatively small'. 140. A penalty for failing to lodge in the approved form by the due date should generally only be further remitted at this step if the super fund has lodged the reporting concerned. | Mitigating factors: 141. Different mitigating facts or circumstances may warrant different levels of further remission, depending on their significance in contributing to the super fund's non-compliance. Where there are multiple mitigating factors present, they should each be considered for remission. The circumstances outlined in this section are examples of mitigating facts or circumstances and are not exhaustive. 142. Mitigating facts or circumstances that only warrant minor further remission (generally not exceeding 10%) include: • the facts indicate the super fund's failure to comply with their MAAS or MATS reporting obligations arose due to an error or honest mistake • you are satisfied that the super fund has addressed the issue that led to their failure to comply, or • the super fund's non-compliance occurred in their first year of operation and you are satisfied the failure to comply was not a deliberate attempt to avoid their MAAS or MATS reporting obligations. • the facts indicate the super fund's failure to comply with their MAAS or MATS reporting obligations arose due to an error or honest mistake • you are satisfied that the super fund has addressed the issue that led to their failure to comply, or • the super fund's non-compliance occurred in their first year of operation and you are satisfied the failure to comply was not a deliberate attempt to avoid their MAAS or MATS reporting obligations. 143. Mitigating facts or circumstances that may warrant moderate further remission (generally not exceeding 20%) include: • the super fund's ability to comply was impacted by the severe ill health of a key employee of the employer • the super fund did meet a significant proportion of their MAAS or MATS reporting obligations accurately and on time and the failure to comply represents a small portion of their overall obligations for the period under consideration, or • the super fund misidentified a transaction due to complex legal interpretative issues. • the super fund's ability to comply was impacted by the severe ill health of a key employee of the employer • the super fund did meet a significant proportion of their MAAS or MATS reporting obligations accurately and on time and the failure to comply represents a small portion of their overall obligations for the period under consideration, or • the super fund misidentified a transaction due to complex legal interpretative issues. 144. Mitigating facts or circumstances that may warrant a larger additional remission (generally not exceeding 50%) include: • the malfunction or outage of a key ATO system which the super fund can demonstrate caused them to narrowly miss the lodgment due date, or • a natural disaster, emergency or other similar event has significantly impacted the super fund's ability to comply with their obligations. • the malfunction or outage of a key ATO system which the super fund can demonstrate caused them to narrowly miss the lodgment due date, or • a natural disaster, emergency or other similar event has significantly impacted the super fund's ability to comply with their obligations. 145. You must ensure that you are considering mitigating circumstances in the context of the type of penalty that applies in the circumstances, as some mitigating circumstances may have more weight in relation to some penalties compared to others. For example, an outage of a key ATO system may warrant larger additional remission of penalties for failing to lodge on time in the approved form but not warrant additional remission of penalties for making a false or misleading statement, as an ATO system outage has greater effect on a super fund's ability to lodge than it does on the correctness of a super fund's reporting. | Exacerbating factors: 146. In limited cases, there may be exacerbating facts or circumstances which warrant reducing the level of remission determined in Steps 1 and 2. Where there are multiple exacerbating factors present, they should each be considered. The circumstances outlined in this section are examples of exacerbating factors and are not exhaustive. 147. Exacerbating facts or circumstances that may warrant minor reduction in remission level (generally not exceeding 10%) include where the super fund: • is reasonably expected to have fully understood their superannuation member reporting obligations (for example, where they have previously been subject to compliance activity or have previously received advice from the ATO about how those obligations apply to the transaction being considered), or • has a demonstrated history of repeated disengagement. • is reasonably expected to have fully understood their superannuation member reporting obligations (for example, where they have previously been subject to compliance activity or have previously received advice from the ATO about how those obligations apply to the transaction being considered), or • has a demonstrated history of repeated disengagement. 148. Exacerbating factors which may warrant moderate reduction in remission level (generally not exceeding 20%) include where the super fund: • has a history of not meeting superannuation member reporting obligations on other entities (for example, where a new super fund is the successor fund to a previous super fund with demonstrated poor compliance history and there is clear continuity between the 2 funds' governance, systems or process arrangements), or • demonstrates unwillingness to assist in efforts to reduce any impact to their members, or assist their members to respond to that impact, resulting from the super fund's failure to comply. • has a history of not meeting superannuation member reporting obligations on other entities (for example, where a new super fund is the successor fund to a previous super fund with demonstrated poor compliance history and there is clear continuity between the 2 funds' governance, systems or process arrangements), or • demonstrates unwillingness to assist in efforts to reduce any impact to their members, or assist their members to respond to that impact, resulting from the super fund's failure to comply. 149. Exacerbating factors which may warrant larger reduction in remission level (generally not exceeding 50%) include where the super fund took steps to: • deliberately avoid their superannuation member reporting obligations, or • prevent or obstruct us from undertaking compliance activity. This is more than just failing to respond to a letter; rather, it may be repeated failure to meet agreed timeframes to supply information without acceptable reason, or deliberately supplying irrelevant, inadequate or misleading information. • deliberately avoid their superannuation member reporting obligations, or • prevent or obstruct us from undertaking compliance activity. This is more than just failing to respond to a letter; rather, it may be repeated failure to meet agreed timeframes to supply information without acceptable reason, or deliberately supplying irrelevant, inadequate or misleading information. | Step 4 – consider whether or not the result is fair, just and proportionate in the circumstances: 150. After considering the super fund's attempt to comply, compliance history and other relevant circumstances to determine a remission level, you must also consider whether the remission level you have determined is a fair, just and proportionate outcome. 151. Where you determine that the level of remission reached by applying Steps 1, 2 and 3 of this process is not a fair, just and proportionate outcome, you must consider remitting the penalty (or penalties) further to achieve a fair, just and proportionate outcome. What is a fair, just and proportionate outcome will depend on the particular circumstances of a case. 152. Paragraphs 153 to 161 of this Practice Statement describe some situations that may not result in a fair, just and proportionate outcome. They are not exhaustive and where an unfair, unjust or disproportionate outcome arises in other situations, you must still consider further remission. | Mechanical process of the law: 153. In some instances, the mechanical process of the law could result in an unintended or unjust result. In particular, this can arise where the BPA when calculating a false or misleading statement penalty is increased because 2 or more penalties were assessed at the same time. In situations where the super fund has not been advised of a previous penalty and the behaviour is not intentional disregard of the law, it is appropriate to consider remitting the penalty to the extent of the amount of the BPA increase. | Penalty is disproportionate to the severity of the failure to comply: 154. Situations may arise where relatively small errors receive penalties which are disproportionate to the severity of the failure to comply. For example, penalties for false or misleading statements that do not result in a shortfall amount are based on a fixed number of penalty units, and this may result in penalties applying that are significantly larger than would be the case for a similar false or misleading statement that did result in a shortfall. 155. Where this occurs, it is appropriate to consider remitting the penalty in part, to an amount which is proportionate to the size of the misstatement. | Misalignment between the failure to comply and a super fund's significant global entity status: 156. A super fund (which is not an SGE at the time they fail to lodge in the approved form by the due date, or make a false or misleading statement) may be treated as an SGE on the basis of their last lodged return, default assessment or a determination by us, and have a penalty multiplier used to calculate their penalties. 157. If the super fund is able to provide sufficient evidence that they were no longer or likely not an SGE at the time of the failure to comply, remission of the additional penalty would be appropriate. 158. For example, a change in SGE status may have occurred as a result of an Australian entity being sold to a new owner, or investment market fluctuations may have resulted in the entity's turnover dropping significantly after the period covered by their last return or default assessment. | Total penalty impact: 159. The event-based nature of superannuation member account reporting obligations through the MAAS and MATS means that super funds generally have many discrete obligations to lodge, and in the course of lodging, make many discrete statements. As a result, you may be simultaneously considering many instances of a super fund being liable to penalties for failing to lodge in the approved form by the due date, making false or misleading statements, or both. 160. In these situations, you must consider whether the total penalties overall produce a fair, just and proportionate outcome in addition to the penalties when considered individually. 161. For example, where a super fund is liable to penalties for failing to lodge in the approved form by the due date, the penalty for each individual failure may be reasonable but when totalled across multiple failures being considered simultaneously the overall penalty amount may be so high that it is disproportionate or unfair. In those circumstances, it would be appropriate to remit the penalty to a more fair, just and proportionate level. | Example 1: 162. Mini Super receives a contribution for their member, Brenda, and allocates the contribution to Brenda's account. However, Mini Super fails to lodge MATS reporting about this contribution until 21 days later. Mini Super has not been granted a deferral of the due date and does not engage the services of a registered tax or BAS agent. 163. A tax officer considering penalties follows the process set out in this Practice Statement. 164. First, they determine the type of penalty which is applicable in the circumstances. Mini Super has correctly reported the details of the contribution through the MATS, and they have done so in the approved form. However, the due date for lodging their reporting through the MATS was 10 business days after the contribution was allocated to Brenda's account, and Mini Super failed to lodge by that due date. The penalty that is applicable in the circumstances is a penalty for failing to lodge in the approved form by the due date. 165. Next, the tax officer considers whether the law protects Mini Super from this penalty. Reasonable care and grace periods do not apply, as neither protects a super fund from penalties for failure to lodge in the approved form by the due date. As Mini Super does not engage the services of a registered tax or BAS agent, there is also no safe harbour that protects them from the penalty. 166. The tax officer moves onto Step 3 and considers whether or not to apply a penalty. They consider that it is appropriate not to apply a penalty because: • Mini Super lodged their MATS reporting with only minimal delay and without intervention from the ATO. • A review of Mini Super's compliance history satisfies the tax officer that this is an isolated incident. • Mini Super lodged their MATS reporting with only minimal delay and without intervention from the ATO. • A review of Mini Super's compliance history satisfies the tax officer that this is an isolated incident. | Example 2: 167. BCD Super submits a batch of MATS reports relating to notices of intent to claim a deduction given to them by their members. However, BCD Super does not have systems in place to ensure reportable transactions are identified and, as a result, transactions are missed for 150 members over the course of the 2024–25 financial year. 168. We identify this after several individuals' tax returns are stopped for review because they have claimed a deduction but there is no corresponding MATS reporting from BCD Super. BCD Super lodges MATS reporting for all 150 members on 5 August 2025, after contact from the ATO. 169. A tax officer considering penalties follows the process set out in this Practice Statement. 170. First, they determine the type of penalty which is applicable in the circumstances. BCD Super has correctly reported the details of the acknowledged notices of intent through the MATS, and they have done so in the approved form. However, the due date for BCD Super to report acknowledgment of valid notices of intent to claim is 10 business days after the day the notice was acknowledged. In each of the 150 cases, BCD Super fails to do this. The penalty that is applicable in the circumstances is a penalty for failing to lodge in the approved form by the due date. 171. Next, the tax officer considers whether the law protects BCD Super from this penalty. Reasonable care and grace periods do not apply, as neither protects a super fund from penalties for failure to lodge in the approved form by the due date. BCD Super does not engage the services of a registered tax or BAS agent, so there is also no safe harbour that protects them from the penalty. 172. The tax officer moves onto Step 3 and considers whether or not to apply a penalty. They consider that is it appropriate to apply a penalty because: BCD Super did not lodge until contacted by the ATO. 173. It is not an isolated failure, with BCD Super failing to make 150 lodgments. 174. The information is highly relevant to the income tax affairs of affected members, and the failure to lodge has put those members to additional inconvenience when lodging their tax returns. 175. As each MATS report is a separate lodgment obligation, BCD Super is liable to an administrative penalty for failing to lodge in the approved form by the due date in relation to each of the 150 MATS reports that they failed to lodge. 176. The tax officer calculates the amount of the penalties to be applied: • First, they calculate the BPA: – 18 MATS reports were between 29 and 56 days overdue; the BPA for each is 2 penalty units ($660) – 12 MATS reports were between 57 and 84 days overdue; the BPA for each is 3 penalty units ($990) – 15 MATS reports were between 85 and 112 days overdue; the BPA for each is 4 penalty units ($1,320) – 57 MATS reports were 113 or more days overdue and the failure to lodge occurred on or after 7 November 2024 [38] ; the BPA for each is 5 penalty units ($1,650) – the remaining 48 MATS reports were 113 or more days overdue and the failure to lodge occurred before 7 November 2024; the BPA for each is 5 penalty units ($1,565). • Next, they determine whether the BPA is increased. BCD Super is a medium withholder with assessable income between $1 million and $20 million for the whole of the 2024–-25 year. The BPA for each penalty is multiplied by 2. • First, they calculate the BPA: – 18 MATS reports were between 29 and 56 days overdue; the BPA for each is 2 penalty units ($660) – 12 MATS reports were between 57 and 84 days overdue; the BPA for each is 3 penalty units ($990) – 15 MATS reports were between 85 and 112 days overdue; the BPA for each is 4 penalty units ($1,320) – 57 MATS reports were 113 or more days overdue and the failure to lodge occurred on or after 7 November 2024 [38] ; the BPA for each is 5 penalty units ($1,650) – the remaining 48 MATS reports were 113 or more days overdue and the failure to lodge occurred before 7 November 2024; the BPA for each is 5 penalty units ($1,565). • Next, they determine whether the BPA is increased. BCD Super is a medium withholder with assessable income between $1 million and $20 million for the whole of the 2024–-25 year. The BPA for each penalty is multiplied by 2. – 18 MATS reports were between 29 and 56 days overdue; the BPA for each is 2 penalty units ($660) – 12 MATS reports were between 57 and 84 days overdue; the BPA for each is 3 penalty units ($990) – 15 MATS reports were between 85 and 112 days overdue; the BPA for each is 4 penalty units ($1,320) – 57 MATS reports were 113 or more days overdue and the failure to lodge occurred on or after 7 November 2024 [38] ; the BPA for each is 5 penalty units ($1,650) – the remaining 48 MATS reports were 113 or more days overdue and the failure to lodge occurred before 7 November 2024; the BPA for each is 5 penalty units ($1,565). 177. This means that, in total, BCD Super is liable to penalties for failure to lodge in the approved form by the due date as shown in Table 6 of this Practice Statement. Table 6: Example 2 – calculation of penalties to which BCD Super is liable MATS reports that were overdue BPA for each penalty Increase to BPA Amount of each penalty Total amount of penalties 18 MATS reports between 29 and 56 days overdue $660 multiplied by 2 $1,320 $23,760 12 MATS reports between 57 and 84 days overdue $990 multiplied by 2 $1,980 $23,760 15 MATS reports between 85 and 112 days overdue $1,320 multiplied by 2 $2,640 $39,600 57 MATS reports 113 or more days overdue and failure to lodge occurred on or after 7 November 2024 $1,650 multiplied by 2 $3,300 $188,100 48 MATS reports 113 or more days overdue and failure to lodge occurred before 7 November 2024 $1,565 multiplied by 2 $3,130 $150,240 178. When applying the penalties, totalling $425,460, the tax officer considers remission. They do this by following the 4-step penalty remission process in Appendix C to this Practice Statement: • First, they consider initial remission based on BCD Super's attempt to comply with their obligations. As BCD Super lodged their MATS reporting after initial contact from us but before compliance action, the initial remission level is 40%. • Second, they consider increasing or reducing the level of remission based on BCD Super's compliance history. The tax officer considers that BCD Super's compliance history is neither good nor poor, with a seemingly good history in relation to their income tax affairs balanced out by a mixed history in relation to their MAAS and MATS reporting obligations. There is no change to remission level. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to the remission level is warranted. They determine that further minor remission of 5% is warranted. – On one hand, BCD Super has interacted with the ATO in relation to their MAAS and MATS reporting enough previously that it is reasonably expected that they fully understood their obligations. – On the other hand, BCD Super has supplied supporting evidence which satisfies the tax officer that BCD Super has now put systems in place to prevent recurrence of this failure. • Finally, the tax officer considers whether the outcome ($234,003 after the 45% remission) is fair, just and proportionate in the circumstances. They consider that, while several penalties are being applied at the same time, the final level of penalty is not so high as to be unfair, nor disproportionate to the severity of BCD Super's sustained failure to comply with obligations over an extended period, which ultimately affected some of their members. They decide it is appropriate to provide no further remission. • First, they consider initial remission based on BCD Super's attempt to comply with their obligations. As BCD Super lodged their MATS reporting after initial contact from us but before compliance action, the initial remission level is 40%. • Second, they consider increasing or reducing the level of remission based on BCD Super's compliance history. The tax officer considers that BCD Super's compliance history is neither good nor poor, with a seemingly good history in relation to their income tax affairs balanced out by a mixed history in relation to their MAAS and MATS reporting obligations. There is no change to remission level. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to the remission level is warranted. They determine that further minor remission of 5% is warranted. – On one hand, BCD Super has interacted with the ATO in relation to their MAAS and MATS reporting enough previously that it is reasonably expected that they fully understood their obligations. – On the other hand, BCD Super has supplied supporting evidence which satisfies the tax officer that BCD Super has now put systems in place to prevent recurrence of this failure. • Finally, the tax officer considers whether the outcome ($234,003 after the 45% remission) is fair, just and proportionate in the circumstances. They consider that, while several penalties are being applied at the same time, the final level of penalty is not so high as to be unfair, nor disproportionate to the severity of BCD Super's sustained failure to comply with obligations over an extended period, which ultimately affected some of their members. They decide it is appropriate to provide no further remission. – On one hand, BCD Super has interacted with the ATO in relation to their MAAS and MATS reporting enough previously that it is reasonably expected that they fully understood their obligations. – On the other hand, BCD Super has supplied supporting evidence which satisfies the tax officer that BCD Super has now put systems in place to prevent recurrence of this failure. 179. The tax officer issues a penalty notice to BCD Super which includes their liability to pay penalties totalling $234,003 in respect of 150 MATS reports, the reasons BCD Super is liable to the penalty, and the reasons it was not remitted in full. | Example 3: 180. BigFund is a super fund that is an SGE. They do not engage the services of a registered tax or BAS agent. 181. By 31 October 2025, BigFund is required to report member contribution balance amounts for each of its members through the MATS. 182. BigFund fails to report these amounts for 1,000 members until 5 December 2025. 183. A tax officer considering penalties follows the process set out in this Practice Statement. 184. First, they determine the type of penalty which is applicable in the circumstances. BigFund has correctly reported the member contribution balance amounts for each of their members, and they have done so in the approved form. However, BigFund has not done this by the due date in respect of 1,000 members. The penalty that is applicable in the circumstances is a penalty for failing to lodge in the approved form by the due date. 185. Next, the tax officer considers whether the law protects BigFund from this penalty. Reasonable care and grace periods do not apply, as neither protects a super fund from penalties for failure to lodge in the approved form by the due date. As BigFund does not engage the services of a registered tax or BAS agent, there is also no safe harbour that protects them from the penalty. 186. The tax officer moves onto Step 3 and considers whether or not to apply a penalty. 187. The tax officer considers that it is appropriate to apply a penalty because the failure is to a significant scale, comprising 1,000 failures to meet lodgment obligations, and the account balance information is of high significance to individuals in managing their own tax affairs. The tax officer also considers that this is not outweighed by the fact BigFund lodged without intervention from us, or by BigFund's good compliance history. The tax officer considers that the scale of BigFund's failure to meet their obligations means it is appropriate to apply penalties in relation to all 1,000 failures (and to consider remission) rather than choosing not to apply a penalty. 188. As each MATS report is a separate lodgment obligation, BigFund is liable to an administrative penalty for failing to lodge in the approved form by the due date in relation to each of the 1,000 MATS reports that they failed to lodge. 189. The tax officer calculates the amount of the penalties to be applied: • The BPA is 2 penalty units ($660), as BigFund's MATS reporting was overdue by more than 28 days but less than 56 days. • As BigFund is an SGE, the BPA is multiplied by 500. • The BPA is 2 penalty units ($660), as BigFund's MATS reporting was overdue by more than 28 days but less than 56 days. • As BigFund is an SGE, the BPA is multiplied by 500. 190. Each penalty amount is $330,000, meaning BigFund is liable to administrative penalties totalling $330 million. 191. When applying the penalties, the tax officer must consider remission and they do this by following the 4-step penalty remission process in Appendix C to this Practice Statement: • First, they consider initial remission based on BigFund's attempt to comply with their obligations. As BigFund lodged their MATS reporting before contact from us and less than 3 months after their initial failure to lodge, the initial remission level is 90%. • Second, they consider increasing or reducing the level of remission based on BigFund's compliance history. The tax officer considers that BigFund's compliance history is good, with generally good compliance with all their obligations over the last 3 years but some significant failures in relation to their MAAS or MATS reporting. The tax officer decides further remission of 7.5% is appropriate. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to remission level is warranted. They determine that no change to remission level is appropriate. – On one hand, BigFund provided supporting evidence to satisfy the tax officer that the failure was an unintentional error. – On the other hand, BigFund is reasonably expected to be fully aware of their obligation to report member contributions balance amounts annually and have sufficient controls to ensure their obligation is met. • Finally, the tax officer considers whether the outcome ($8.25 million after the 97.5% remission) is fair, just and proportionate in the circumstances. The tax officer considers that penalties of that magnitude produce a disproportionate and unjust result and that further remission to $3.3 million (representing overall remission of 99%) is a fair and just outcome that is proportionate to the scale of BigFund's failure to comply with their obligations. • First, they consider initial remission based on BigFund's attempt to comply with their obligations. As BigFund lodged their MATS reporting before contact from us and less than 3 months after their initial failure to lodge, the initial remission level is 90%. • Second, they consider increasing or reducing the level of remission based on BigFund's compliance history. The tax officer considers that BigFund's compliance history is good, with generally good compliance with all their obligations over the last 3 years but some significant failures in relation to their MAAS or MATS reporting. The tax officer decides further remission of 7.5% is appropriate. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to remission level is warranted. They determine that no change to remission level is appropriate. – On one hand, BigFund provided supporting evidence to satisfy the tax officer that the failure was an unintentional error. – On the other hand, BigFund is reasonably expected to be fully aware of their obligation to report member contributions balance amounts annually and have sufficient controls to ensure their obligation is met. • Finally, the tax officer considers whether the outcome ($8.25 million after the 97.5% remission) is fair, just and proportionate in the circumstances. The tax officer considers that penalties of that magnitude produce a disproportionate and unjust result and that further remission to $3.3 million (representing overall remission of 99%) is a fair and just outcome that is proportionate to the scale of BigFund's failure to comply with their obligations. – On one hand, BigFund provided supporting evidence to satisfy the tax officer that the failure was an unintentional error. – On the other hand, BigFund is reasonably expected to be fully aware of their obligation to report member contributions balance amounts annually and have sufficient controls to ensure their obligation is met. 192. The tax officer issues a penalty notice to BigFund which includes their liability to pay penalties totalling $3.3 million in respect of 1,000 MATS reports, the reasons BigFund is liable to the penalty, and the reasons it was not remitted in full. | Example 4: 193. Dooper Super lodges MAAS reporting that mis-identifies member accounts as capped defined benefit income streams when they are in fact transition to retirement income streams (TRIS). 194. The issue with Dooper Super's reporting is brought to our attention when the misreporting causes difficulty for Dooper Super's members in managing their own tax affairs. We make Dooper Super aware of the issue in December 2024. 195. However, as TRIS only comprise a small portion of benefits paid by Dooper Super, they decide that the cost of implementing measures to resolve the issue outweighs the scale of the problem. They choose not to invest in a solution and knowingly continue to report incorrectly on 350 occasions throughout 2025. 196. A tax officer considering penalties follows the process set out in this Practice Statement. 197. First, they determine the type of penalty which is applicable in the circumstances. Dooper Super has reported the account status by the due date, and they have done so in the approved form. However, Dooper Super has reported an account status which is false. The penalty that is applicable in the circumstances is a false or misleading statement penalty. 198. Next, the tax officer considers whether the law protects Dooper Super from this penalty. Grace periods do not apply, as there are no grace periods applicable. As Dooper Super does not engage the services of a registered tax or BAS agent, no safe harbour protects them from the penalty. Dooper Super would be protected from the false or misleading statement penalty if they took reasonable care; however, intentionally reporting information that is false is not taking reasonable care. 199. The tax officer moves onto Step 3 and considers whether or not to assess a penalty. 200. The tax officer considers that the significance of the information to the tax and superannuation systems and the intentional reporting of false information means it is appropriate to assess a penalty. 201. As each occasion that Dooper Super reports a member account as being a capped defined benefit income stream when it is a TRIS is a separate statement, Dooper Super is liable to a false or misleading statement penalty in relation to each of the 350 false statements they made. 202. The tax officer calculates the amount of the penalties to be applied: • With Dooper Super having made a deliberate choice to continue reporting incorrectly, the tax officer assessing the penalty consults MT 2008/1 and determines that Dooper Super's conduct amounts to intentional disregard of a taxation law, meaning the BPA is 60 penalty units. • The BPA is increased by 20% in relation to the last 349 false or misleading statements, as Dooper Super has had a BPA worked out for the first incorrect report. • With Dooper Super having made a deliberate choice to continue reporting incorrectly, the tax officer assessing the penalty consults MT 2008/1 and determines that Dooper Super's conduct amounts to intentional disregard of a taxation law, meaning the BPA is 60 penalty units. • The BPA is increased by 20% in relation to the last 349 false or misleading statements, as Dooper Super has had a BPA worked out for the first incorrect report. 203. The penalty amount for the first false or misleading statement is $19,800. For each subsequent false or misleading statement, the penalty amount is $23,760. In total, Dooper Super is liable to administrative penalties totalling $8,312,040. 204. When assessing the penalties, the tax officer must consider remission and they do this by following the 4-step penalty remission process in Appendix C to this Practice Statement: • First, they consider initial remission based on Dooper Super's attempt to comply with their obligations. As Dooper Super's making of false or misleading statements was deliberate, the initial remission level is 0%. • Second, they consider increasing or reducing the level of remission based on Dooper Super's compliance history. The tax officer considers that Dooper Super's compliance history is neither good nor poor, with a mixed history of failing to meet various obligations over the last 3 years. The tax officer decides it is appropriate to maintain the remission level with no change. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to remission level is warranted. They determine that it is appropriate to maintain the level of remission with no change. – On one hand, Dooper Super has met a significant proportion of their other MAAS and MATS reporting obligations. – On the other hand, Dooper Super has not willingly corrected their false statements, nor demonstrated that steps are being taken to prevent the issue recurring in future. On the contrary, Dooper Super has stated that they are not willing to invest in fixing the issue that causes their repeated false statements. • Finally, the tax officer considers whether the outcome ($8,312,040 with no remission) is fair, just and proportionate in the circumstances. While of a significant magnitude, the tax officer considers that the outcome is a fair, just and proportionate outcome in the context of a super fund that has deliberately made false statements to us and demonstrated unwillingness to correct their behaviour in the future. However, the tax officer also acknowledges that multiple penalties were assessed at the same time and determines it would be appropriate to remit the 20% increase in BPA in relation to the latter 349 false statements. • First, they consider initial remission based on Dooper Super's attempt to comply with their obligations. As Dooper Super's making of false or misleading statements was deliberate, the initial remission level is 0%. • Second, they consider increasing or reducing the level of remission based on Dooper Super's compliance history. The tax officer considers that Dooper Super's compliance history is neither good nor poor, with a mixed history of failing to meet various obligations over the last 3 years. The tax officer decides it is appropriate to maintain the remission level with no change. • Third, the tax officer considers all other relevant facts and circumstances to determine whether further change to remission level is warranted. They determine that it is appropriate to maintain the level of remission with no change. – On one hand, Dooper Super has met a significant proportion of their other MAAS and MATS reporting obligations. – On the other hand, Dooper Super has not willingly corrected their false statements, nor demonstrated that steps are being taken to prevent the issue recurring in future. On the contrary, Dooper Super has stated that they are not willing to invest in fixing the issue that causes their repeated false statements. • Finally, the tax officer considers whether the outcome ($8,312,040 with no remission) is fair, just and proportionate in the circumstances. While of a significant magnitude, the tax officer considers that the outcome is a fair, just and proportionate outcome in the context of a super fund that has deliberately made false statements to us and demonstrated unwillingness to correct their behaviour in the future. However, the tax officer also acknowledges that multiple penalties were assessed at the same time and determines it would be appropriate to remit the 20% increase in BPA in relation to the latter 349 false statements. – On one hand, Dooper Super has met a significant proportion of their other MAAS and MATS reporting obligations. – On the other hand, Dooper Super has not willingly corrected their false statements, nor demonstrated that steps are being taken to prevent the issue recurring in future. On the contrary, Dooper Super has stated that they are not willing to invest in fixing the issue that causes their repeated false statements. 205. The tax officer issues a penalty notice to Dooper Super which includes their liability to pay penalties totalling $6,930,000 in respect of 350 false or misleading statements, the reasons Dooper Super is liable to the penalty, and the reasons it was not remitted in full. | Example 5: 206. MediumFund undertakes restructuring of its administrative systems and processes. As an unintended consequence of these changes, on 23 June 2025, MediumFund's IT systems generates and sends 200,000 MATS reports in relation to received employer contributions that are duplicates of MATS reporting previously lodged. This duplication causes several individuals to receive incorrect excess contributions determinations. 207. Soon after, MediumFund discovers the error, voluntarily discloses the error, and corrects their reporting. Additionally, Medium Fund has not identified any errors in their previous MAAS or MATS reporting in the last 3 years. 208. A tax officer considering penalties follows the process set out in this Practice Statement. 209. First, they determine the type of penalty which is applicable in the circumstances. As MediumFund did not actually receive a contribution, there was no due date for reporting or a requirement to do so in the approved form. However, by reporting that they received a new contribution when in fact they did not, MediumFund has made a false statement. The penalty that is applicable in the circumstances is a false or misleading statement penalty. 210. Next, the tax officer considers whether the law protects MediumFund from this penalty. Grace periods do not apply, as there are no grace periods applicable. As MediumFund does not engage the services of a registered tax or BAS agent, no safe harbour protects them from the penalty. MediumFund would be protected from the false or misleading statement penalty if they took reasonable care; however, the tax officer consults MT 2008/1 and determines that MediumFund did not take reasonable care, as a reasonable person would foresee a risk when undertaking work affecting reporting systems that incorrect reporting might be generated and take steps to prevent it occurring. 211. The tax officer moves onto Step 3 and considers whether or not to assess a penalty. 212. The tax officer considers that the significance of the information to the tax and superannuation systems and the impact to individuals that has resulted means it is appropriate to assess a penalty. 213. As each occasion that MediumFund reported receiving a contribution that did not exist is a separate statement, MediumFund is liable to a false or misleading statement penalty in relation to each of the 200,000 false statements they made. 214. The tax officer calculates the amount of the penalties to be applied: • The tax officer assessing the penalty determines that MediumFund's conduct amounts to a failure to take reasonable care, meaning the BPA is 20 penalty units. • The BPA is increased by 20% in relation to the last 199,999 false or misleading statements, as MediumFund has had a BPA worked out for the first incorrect report. • The BPA is reduced to nil as a result of MediumFund voluntarily disclosing their false statements without intervention from the ATO, and as there are no previous occasions on which the fund has made errors in their MAAS or MATS reporting in the last 3 years. • The tax officer assessing the penalty determines that MediumFund's conduct amounts to a failure to take reasonable care, meaning the BPA is 20 penalty units. • The BPA is increased by 20% in relation to the last 199,999 false or misleading statements, as MediumFund has had a BPA worked out for the first incorrect report. • The BPA is reduced to nil as a result of MediumFund voluntarily disclosing their false statements without intervention from the ATO, and as there are no previous occasions on which the fund has made errors in their MAAS or MATS reporting in the last 3 years. 215. As the BPA is reduced to nil, MediumFund will not be required to pay a penalty. | Example 6: 216. RegCorp is a super fund administrator. They look after member reporting for several funds including ZZZ Super. RegCorp is not a registered tax or BAS agent. 217. RegCorp makes updates to their registry systems which causes errors in ZZZ Super's MATS reporting. Insufficient staffing of RegCorp's reporting compliance team results in these errors not being identified before the MATS reporting is lodged. This combination of circumstances means ZZZ Super's MATS reporting contains some false and misleading statements. 218. A tax officer considering penalties follows the process set out in this Practice Statement. 219. First, they determine the type of penalty which is applicable in the circumstances. ZZZ Super's MATS reporting was lodged by the due date and in the approved form. However, where the errors in ZZZ Super's MATS reporting result in the information provided being false or misleading, ZZZ Super has made a false or misleading statement. The penalty that is applicable in the circumstances is a false or misleading statement penalty. 220. Next, the tax officer considers whether the law protects ZZZ Super from this penalty. Grace periods do not apply, as there are no grace periods applicable. As RegCorp is not a registered tax or BAS agent, ZZZ Super is not protected from the penalty by a safe harbour. The tax officer considering penalties needs to consider whether ZZZ Super took reasonable care in ensuring the accuracy of their reporting. If it is determined that ZZZ Super did not take reasonable care, the tax officer would continue to follow the process set out in this Practice Statement, and potentially assess a false or misleading statement penalty against ZZZ Super, notwithstanding that the false or misleading statements in their reporting were the result of RegCorp's error. 221. You are invited to provide comments on this draft Practice Statement. Forward your comments to the contact officer by the due date. 222. When providing comments, we invite you to consider the following specific questions: (a) Does the step-by-step approach of the draft Practice Statement strike an appropriate balance between clarity of outcomes and maintaining flexibility to take account of a super fund's individual circumstances? (b) Are the mitigating and exacerbating factors outlined at Step 3 in Appendix C to this draft Practice Statement representative of circumstances that may reasonably arise? Are there any additional mitigating and exacerbating factors that should be considered? Does the guidance on increasing or reducing the remission level appropriately reflect the impact or severity of those circumstances? (c) Where a super fund becomes liable to penalties because of the actions of a third-party service provider, to what extent should the ATO take this into account when considering imposition and remission of penalties? Should it instead be treated as a matter to be resolved privately between the super fund and their service provider? (a) Does the step-by-step approach of the draft Practice Statement strike an appropriate balance between clarity of outcomes and maintaining flexibility to take account of a super fund's individual circumstances? (b) Are the mitigating and exacerbating factors outlined at Step 3 in Appendix C to this draft Practice Statement representative of circumstances that may reasonably arise? Are there any additional mitigating and exacerbating factors that should be considered? Does the guidance on increasing or reducing the remission level appropriately reflect the impact or severity of those circumstances? (c) Where a super fund becomes liable to penalties because of the actions of a third-party service provider, to what extent should the ATO take this into account when considering imposition and remission of penalties? Should it instead be treated as a matter to be resolved privately between the super fund and their service provider? 223. A compendium of comments is prepared as part of the finalisation of this Practice Statement. An edited version of the compendium (with names and identifying information removed) is published to the ATO Legal database on ato.gov.au. 224. Advise the contact officer if you do not wish for your comments to be included in the edited compendium. Due date: 24 April 2026 Contact officer details have been removed as the comments period has ended. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Date of Issue: 12 March 2026 Date of Effect: When finalised, this Practice Statement will apply from the date of publication. [1] References in this draft Practice Statement to a super fund include all entities that are required to report information about member accounts using the MAAS and MATS. [2] For readability, all further references to 'this Practice Statement' refer to the Practice Statement as it will read when finalised. Note that this Practice Statement will not take effect until finalised. [3] Section 286-75. [4] Section 388-50. [5] Section 388-75. [6] See section 284-75. [7] Subsection 284-75(5). [8] Paragraph 28 of MT 2008/1. [9] Under section 390-7. [10] Subsection 286-75(1A). [11] Subsection 286-75(1B). [12] Subsection 284-75(6). [13] Section 298-20. [14] Sections 298-10 and 298-20. [15] Sections 298-10 and 298-15. [16] Subsection 286-80(6). [17] At paragraph 5. [18] Subsection 286-80(1). [19] The value of a penalty unit is contained in section 4AA of the Crimes Act 1914 and is indexed regularly. The dollar amount of a penalty unit is available at Penalties . [20] Subsection 286-80(2). [21] Taxation Administration Member Account Attribute Service – the Reporting of Information relating to Superannuation Account Phases and Attributes 2018 . [22] Taxation Administration Member Account Transaction Service – the Reporting of Information Relating to Superannuation Account Transactions 2018 . [23] Subsection 286-80(3). [24] Section 16-100. [25] Subsection 286-80(4). [26] Section 16-95. [27] Subsection 286-80(4A). [28] See paragraph 8 of PS LA 2011/19. [29] The value of a penalty unit is contained in section 4AA of the Crimes Act 1914 and is indexed regularly. The dollar amount of a penalty unit is available at Penalties . [30] Section 284-220. [31] Ebner and Commissioner of Taxation [2006] AATA 525 at [19]; Ciprian and Ors and Commissioner of Taxation [2002] AATA 746. [32] Guidance on our approach to dealing with claims for LPP can be found in Compliance with formal notices – claiming legal professional privilege in response to formal notices . [33] Section 284-225. [34] Unlike shortfall penalties where the reduction rates are 20%, 80% and to nil, this false or misleading statement penalty is reduced to nil for pre-notification disclosures, and either by 20% or to nil (if the discretion is exercised) after being told of an examination. [35] Kdouh and Commissioner of Taxation [2005] AATA 6. [36] For example, by making a voluntary disclosure in circumstances where it reduces the BPA to nil. [37] Taxation law is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 to mean an Act or part of an Act of which the Commissioner has the general administration, and legislative instruments made under such an Act or part of an Act. [38] The value of a Commonwealth penalty unit increased on 7 November 2024. File 1-1462AABE Related Rulings/Determinations: MT 2008/1 MT 2012/3 Related Practice Statements: PS LA 2008/3 PS LA 2011/19 PS LA 2012/4 PS LA 2012/5 Other References: Compliance with formal notices – claiming legal professional privilege in response to formal notices How to make a voluntary disclosure Penalties Taxation Administration Member Account Attribute Service – the Reporting of Information relating to Superannuation Account Phases and Attributes 2018 Taxation Administration Member Account Transaction Service – the Reporting of Information Relating to Superannuation Account Transactions 2018

Related practice statements: PS LA 2008/3 PS LA 2011/19 PS LA 2012/4 PS LA 2012/5
Legislative references: Crimes Act 1914 4AA | ITAA 1997 995-1(1) | TAA 1953 Sch 1 16-95 | TAA 1953 Sch 1 16-100 | TAA 1953 Sch 1 284-75 | TAA 1953 Sch 1 284-75(5) | TAA 1953 Sch 1 284-75(6) | TAA 1953 Sch 1 284-75(9) | TAA 1953 Sch 1 284-90(1) | TAA 1953 Sch 1 284-220 | TAA 1953 Sch 1 284-225 | TAA 1953 Sch 1 286-75 | TAA 1953 Sch 1 286-75(1A) | TAA 1953 Sch 1 286-75(1B) | TAA 1953 Sch 1 286-80(1) | TAA 1953 Sch 1 286-80(2) | TAA 1953 Sch 1 286-80(3) | TAA 1953 Sch 1 286-80(4) | TAA 1953 Sch 1 286-80(4A) | TAA 1953 Sch 1 286-80(6) | TAA 1953 Sch 1 298-10 | TAA 1953 Sch 1 298-15 | TAA 1953 Sch 1 298-20 | TAA 1953 Sch 1 388-50 | TAA 1953 Sch 1 388-75 | TAA 1953 Sch 1 390-5 | TAA 1953 Sch 1 390-7 | TAA 1953 Sch 1 390-20
Other references: Compliance with formal notices – claiming legal professional privilege in response to formal notices How to make a voluntary disclosure Penalties Taxation Administration Member Account Attribute Service – the Reporting of Information relating to Superannuation Account Phases and Attributes 2018 Taxation Administration Member Account Transaction Service – the Reporting of Information Relating to Superannuation Account Transactions 2018

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For information about the status of this draft Practice Statement, see item [4200] on our Advice under development program | Appendix A – Applying penalties for failure to lodge in the approved form by the due date | Appendix B – Assessing penalties for false or misleading statements | Appendix C – 4-step penalty remission process | Appendix E – Your comments | This Practice Statement is a draft for consultation purposes only. When the final Pratice Statement issues, it will have the following preamble: | Ciprian and Ors and Commissioner of Taxation [2002] AATA 746 2002 ATC 2099 50 ATR 1257 | Ebner and Commissioner of Taxation [2006] AATA 525 2006 ATC 2263 63 ATR 1073 [2007] ALMD 2241 | Kdouh and Commissioner of Taxation [2005] AATA 6 58 ATR 1198 2005 ATC 2001 [2005] ALMD 7887