The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the issues currently being considered by the ATO professional Firms Working Group and in particular, the withdrawal of the Assessing the Risk: Allocation of profits within professional firms guidelines (Guidelines) on 14 December 2017. In The Tax Institute's view:
- The Guidelines have operated well in the majority of cases where the core issue was the allocation of profits;
- The reasons given for the withdrawal of the Guidelines is due to what we submit are issues not core to the matters the benchmarks in the Guidelines are intended to apply to;
- These non-core issues can either be resolved by applying other relevant tax provisions already in the law or should be the subject of a separate piece of guidance.
Furthermore, uncertainty for taxpayers persists while the Guidelines remain withdrawn without replacement. Therefore, it is key that this uncertainty be resolved as soon as possible and preferably by 30 June 2018.