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  • Open for consultation – draft Practical Compliance Guideline and Law Companion Guideline for the diverted profits tax

    Following the recent release of the draft Law Companion Guideline LCG 2017/D7 Diverted profits tax, we are now seeking your feedback on the draft Practical Compliance Guideline PCG 2018/D2 Diverted profits tax.

    The diverted profits tax (DPT) was introduced by the government to complement Australia’s anti-avoidance rules and to strengthen the Australian tax framework. It seeks to ensure significant global entities cannot avoid Australian tax by diverting profits offshore through transactions or arrangements involving related parties.

    The draft PCG builds upon the earlier draft guidance by setting out the ATO’s client engagement framework for the DPT. It also outlines our approach to risk assessment and compliance activity when the DPT risk is a concern.  We have provided guidance across a range of industries, on what we consider to be high and low risk scenarios in relation to the SES test, which provides an exception to the application of the DPT. This reflects feedback that taxpayers are likely to assess their DPT risk by considering the SES test before considering other aspects of the DPT.

    We invite your comments on the draft PCG. The consultation period is open until March 9 2018. Submit your feedback by email to melissa.crothers@ato.gov.au

    Note: There is still time to provide feedback on the draft LCG, which explains how the new law will apply and clarifies new concepts introduced by the measure. The consultation period is open until 16 February 2018. Submit your feedback by email to carolyn.billett@ato.gov.au

    See also:

      Last modified: 09 Feb 2018QC 54532