From www.rsm.global: The ATO released Practical Compliance Guideline (PCG) 2021/4 to offer a compliance framework for individual professional practitioners regarding profit allocation.

The guideline requires IPPs to pass two gateway tests—commercial rationale and absence of high-risk features—to rely on a risk assessment framework that helps evaluate the risk level of their profit allocation arrangements.

Non-compliance with PCG 2021/4 may lead to increased scrutiny from the ATO, potential tax audits, and penalties.