Backended Contracts

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SweetFA

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I had a good think about this on Friday.
If there are any Chartered Accountants, Auditors, Tax Law specialists:-
Correct me if I’m incorrect but backended contracts over 3-5 years are a form of tax evasion/avoidance & in breach superannuation regulations?
In year 1 although you’re worth say $600k we’ll give $350k, in year2 $500k year 3 $800k & $850k just for example
If this is the case & the NRL registered the contracts, are they not complicit in this breach?
Thoughts?
 

Precise

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Tax bracket is the same regardless of how much and when they get paid taxman doesn't lose any money in the course. They're deciding and accepting their own wage and self worth when they sign the contract with clauses accepting they'll be worth more each year.
 

Hot Dog

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I had a good think about this on Friday.
If there are any Chartered Accountants, Auditors, Tax Law specialists:-
Correct me if I’m incorrect but backended contracts over 3-5 years are a form of tax evasion/avoidance & in breach superannuation regulations?
In year 1 although you’re worth say $600k we’ll give $350k, in year2 $500k year 3 $800k & $850k just for example
If this is the case & the NRL registered the contracts, are they not complicit in this breach?
Thoughts?
No. Superannuation is set at 9.25% so they will contribute the same amount regardless over the end period.

Taxation laws are not being breaches either as the tax rate will be maxed regardless as the salary is over the top tax bracket for all years. Not that I believe this would matter anyways.
 

Oatley Dog

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It's irrelevant no matter what. Sports star contracts are taxed under a different method. Because their careers are limited to 10 years they are able to spread it out over a longer period to replicate the career of a normal worker. When you also consider their managers use creative investment methods to go with it their tax liabilities are heavily reduced.
 
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