Ref: AMK
7 November 2024
Mr Stephen Dodshon Assistant Commissioner (a/g) New Measures | Public Groups Australian Taxation Office
By Email: stephen.dodshon@ato.gov.au Dear Stephen SUBMISSION: DRAFT PRACTICAL COMPLIANCE GUIDELINE PCG 2024/D3 1.
Thank you for the opportunity to provide comments on the Draft Practical Compliance Guideline PCG 2024/D3 “Restructures and the new thin capitalisation and debt deduction creation rules - ATO compliance approach” (“PCG”).
2.
Pitcher Partners specialises in advising taxpayers in what is commonly referred to as the middle market. Accordingly, we provide accounting and advisory services to taxpayers that would be impacted by the proposed changes to the debt deduction creation rules contained in Division 820 of the Income Tax Assessment Act 1997 (“ITAA97”).
3.
We highlight that for the purposes of Division 30 of the Tax Agent Services Act 2009 (“TASA”), and in particular the amendments made by Tax Agent Services (Code of Professional Conduct) Determination 2024 (“the Determination”), many of the recommendations and suggestions contained in this submission will likely assist taxpayers in the middle market in complying with the debt deduction creation rules (“DDCR”) contained in Subdivision 820-EAA and reducing the potential exposure that such taxpayers will have in relation to the DDCR. 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 DDCR provisions as we understand them.
4.
We understand that the ATO is in a difficult position that requires appropriate guidance to be provided in relation to the operation of the DDCR provisions, being a set of very complex provisions to interpret and apply in practice. We also understand that these provisions can also be interpreted in an extremely broad manner and that ascertaining
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