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Allocation of professional firm profits: part 1
Published on 01 Apr 22 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The Commissioner of Taxation issued PCG 2021/4 on 16 December 2021. The guideline is concerned with inappropriate tax outcomes arising from the allocation of profits from professional firms. It is essentially a targeting system, setting out a risk assessment framework by which the Commissioner will judge who within the applicable industries will likely be subject to further analysis and possibly audit, and who will not. Part 1 of this article starts with a brief background on the history of the tax technical matters underlying PCG 2021/4. It then covers the qualifying criteria that must be satisfied in order to rely on the guideline’s risk assessment framework, and what happens when they are not satisfied. Part 2 will cover PCG 2021/4’s risk assessment framework, the scoring system, and the transitional arrangements with suspended guidelines from 2015.
Author profile
David Montani CTA
David Montani, CTA, is National Head of Technical Tax – Private Enterprise at Grant Thornton. He has over 30 years’ experience, with over 20 of those in specialist tax advisory. In his role with GT, David delivers practical tax training, mentors staff, provides tax technical support on significant client engagements, and assists with quality and excellence protocols. - Current at 13 November 2025
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