17 January 2024 the Australian Taxation Office published the final version of its Practical Compliance Guideline PCG 2024/1 Intangibles migration arrangements.
The PCG has previously been released in drafts as PCG 2021/D4 and PCG 2023/D2 Intangibles arrangements.
The final version sets out ATO’s compliance approach to the tax risks associated with certain cross-border related party intangibles arrangements involving:
- restructures or changes to arrangements involving intangible assets (referred to as ‘migrations’ in the PCG)
- the mischaracterisation or non-recognition of Australian activities connected with intangible assets.
Changes and additions included in the final version:
- further clarification of the arrangements in scope
- exclusion of certain arrangements (‘Excluded Intangibles Arrangement’) from the scope
- inclusion of a ‘white zone’ for arrangements that have been subject to previous ATO audit or reviews
- further explaining our compliance approach, including the engagement taxpayers can expect based on the compliance risks associated with an arrangement
- expanding the guidance allowing taxpayers to group intangible assets or arrangements to make it easier for taxpayers apply the PCG
- providing more information on the reporting requirements taxpayers can expect to complete the reportable tax position schedule.