The ATO recently released Draft Practical Compliance Guideline PCG 2021/D2 (Draft PCG) which explains the compliance approach the ATO intends to apply when considering the allocation of profits by professional firms, and the inclusion of income in the assessable income of individual professional practitioners (IPP). These guidelines apply to IPPs in professional practices including accountants, lawyers, engineers, doctors and architects etc.
The ATO is seeking comments on the draft PCG including the ATO’s ‘risk-based’ approach to IPPs and the risk assessment framework. In response, BDO National Tax has prepared a BDO submission.
This submission relates to a previous technical update regarding the allocation of professional firm profits.