Professional firms profit allocation guideline finalised

The ATO has finalised Practical Compliance Guideline PCG 2021/4 Allocation of professional firm profits – ATO compliance approach that sets out the ATO’s compliance approach to the allocation of profits by individual professional practitioners (IPPs) within professional firms. The Guideline also provides a risk assessment framework that assists IPPs to self-assess their risk.

This Guideline replaces the ATO’s Assessing the Risk: Allocation of profits within professional firms guidelines and Everett Assignment web materials, which were suspended in December 2017. Transitional arrangements apply for IPPs whose arrangements were low risk under the suspended guidelines but are moderate or high risk under this Guideline.