Draft PCG 2023/D2 on ‘Intangibles Arrangements’

On 17 May 2023, the Australian Taxation Office (ATO) released a revised Draft Practical Compliance Guideline PCG 2023/D2 setting out its proposed compliance approach and risk assessment framework for arrangements involving intangible assets and international related parties. While the overall position of this draft has not changed from the original Draft PCG 2021/4, this draft outlines the ATO’s compliance approach with respect to:

  1. Arrangements involving the migration of intangible assets
  2. Arrangements involving mischaracterisation of Australian activities related to the development, enhancement, maintenance, protection, and exploitation (DEMPE) of intangible assets.

In response, BDO has prepared a submission outlining the issues of concern in Draft PCG 2023/D2, including clarifying the number of prior years the ATO expects taxpayers to complete the risk assessment framework for intangibles migrated in earlier years and consideration of an ‘appropriate materiality threshold’ for application of the Draft PCG.


Should have any questions regarding the content of this submission, please contact your BDO tax adviser for further guidance.