Ref: AMK:lg
14 February 2025
Virginia Gogan Australian Taxation Office
By Email: Virginia.Gogan@ato.gov.au Dear Virginia PCG 2024/D4 - CAPITAL RAISED FOR THE PURPOSE OF FUNDING FRANKED DISTRIBUTIONS 1.
Thank you for the opportunity to provide comments on Draft Practical Compliance Guideline PCG 2024/D4 (“Draft PCG”) about its compliance approach in respect of section 207-159 of the Income Tax Assessment Act 19971.
2.
We highlight that for the purposes of Division 30 of the Tax Agent Services Act 2009 and, in particular, the amendments made to the Code of Conduct by the Determination, all of the comments made in this submission are directly relevant to us as a firm and our clients. While this may result in a conflict of interest for the purposes of section 20 of the Determination, we highlight that we have tried to ensure that our comments and suggestions contained in this submission are balanced and consistent with the policy principles and intention of the rules as we understand them.
3.
Pitcher Partners specialises in advising taxpayers in what is commonly referred to as the middle market. Accordingly, we advise many taxpayers that would need to consider and apply the Draft PCG and the Commissioner’s interpretation as contained in the Draft PCG (i.e. as the guideline will require consideration on the payment of each and every dividend paid by a private company).
4.
We highlight paragraph 4 of the Draft PCG which explains that section 207-159 is an integrity measure addressing the concerns raised in Taxpayer Alert 2015/2, which arose out of arrangements involving listed public companies, particularly those with substantial shareholdings held by large institutional superannuation funds. In particular, we highlight that these factual circumstances are not relevant to private companies seeking to pay a dividend to shareholders in the ordinary course of their operations.
1
All legislative references in this document are to this Act unless otherwise stated.
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