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ITAConsolidated 74

The document outlines provisions related to income tax deductions for companies, specifically regarding irrecoverable sums and contributions to superannuation funds. It details the conditions under which a company can deduct pension payments to former employees or their surviving spouses, emphasizing the need for approval from the Director-General. Certain restrictions apply, particularly concerning directors and relationships with the employer.

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2 views1 page

ITAConsolidated 74

The document outlines provisions related to income tax deductions for companies, specifically regarding irrecoverable sums and contributions to superannuation funds. It details the conditions under which a company can deduct pension payments to former employees or their surviving spouses, emphasizing the need for approval from the Director-General. Certain restrictions apply, particularly concerning directors and relationships with the employer.

Uploaded by

akash.chattoor1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MRA THE INCOME TAX ACT 1995 74

sum not received in an income year but which is deemed to be derived


in that income year and which is proved to have become irrecoverable
by the company.

(3) Any amount allowed as a deduction under subsections (1) and (2) which
is subsequently received by the company shall be deemed to be gross
income derived in the income year in which it is received.

61. Contributions to superannuation fund

The provisions of section 22 shall apply in all respects to a company as they


apply to an individual.

62. Pensions to former employees

(1) Subject to subsection (2), the Director-General may, in the case of a


company deriving gross income specified in section 10(1)(b) allow a
deduction in respect of any amount which is not deductible otherwise
than under this section and which, in the opinion of the Director-
General, is reasonable in the particular circumstances of the case, paid
by the company in that income year by way of a pension to any former
employee in the business of the company, or to the surviving spouse of
that employee, in consideration of the past services of that employee in
that business of the company, where the Director-General is satisfied
that –

(a) the pension is receivable by the recipient -

(i) by virtue of any enactment;

(ii) as of right under a written document for a fixed period


or for life;

(iii) in the case of the surviving spouse, for a fixed period or


for life or until he or she remarries; or

(iv) on grounds which the Director-General determines to be


compassionate grounds; and

(b) except in the case of the death of the employee while in the
employment of the company, the employee did not retire from his
employment before attaining the appropriate retiring age.

(2) This section shall not apply where -

(a) the employee was or is a director of the company and was not in
the full-time employment of the company; or

(b) in any other case, because of any relationship to or with the


employer or otherwise the former employee or the surviving

* Please refer to endnotes at Appendix 1 Page 74 of 467

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