The Tax Institute Submission | Reform of Non-Arm's Length Income and Expense Rules

Author: The Tax Institute

Published Date: 3 Feb 2022


Sorry, this is subscriber only content.

If you're not yet a subscriber, to gain access to this material and much more - Subscribe Now.

Already a Subscriber? Login now

Already a Subscriber? Login now

Further to recent correspondence, meetings and discussions with Senator Hume's office, Treasury and the Australian Taxation Office (ATO), we write to request Treasury urgently support the need to amend the existing non-arm's length income (NALI) and non-arm's length expenditure (NALE) rules in section 295-550 (the provision) of the Income Tax Assessment Act 1997 (ITAA 1997).

Following the release of the ATO's recent Law Companion Ruling LCR 2021/2 (LCR) and Practical Compliance Guideline PCG 2020/5 (PCG), it has become evident that the administration of the provision is broader than the original policy intent.

On this basis, the Professional Bodies (Bodies), as noted in Appendix A, either separately or together, have engaged with Senator Hume's office, Treasury and the ATO on numerous occasions to raise concerns with the ATO's interpretation and broad implications of the provision.

We refer to various previous meetings and correspondence with the Treasury and the ATO for background. The Bodies' technical concerns with the operation and administration of the provision and the detailed background are most clearly set out in a joint letter dated 3 September 2021 from the Bodies to Senator Hume.


  • Published By:The Tax Institute
  • Published On:3 Feb 2022

The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.



Share this page