ATO consultation on TR 2010/DC2 and LCR 2021/DC2
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the draft Taxation Ruling TR 2010/DC2 Income tax: superannuation contributions (draft TR) and draft Law Companion Ruling LCR 2021/DC2 Non-arm's length income - expenditure incurred under a non-arm's length arrangement (draft LCR) (collectively, the draft guidance).
In the development of this submission, we have closely consulted with our National Superannuation Technical Committee to prepare a considered response that represents the views of the broader membership of The Tax Institute (TTI). Our committee members have considerable practical experience in dealing with and advising on taxation issues arising from non-arm’s length income (NALI) and non-arm's length expenditure (NALE) matters.
We have also reviewed a copy of the submission by Chartered Accountants Australia and New Zealand, CPA Australia, and other professional bodies dated 24 January 2024 (Joint Bodies’ Submission). We agree with and endorse the Joint Bodies’ Submission.
The Tax Institute and its members remain committed to seeking changes and improvements to the law and ATO guidance materials on NALI/E and our submission should not be construed as endorsing the current state of affairs. The Tax Institute and numerous other professional and industry bodies have made many submissions in recent years expressing widespread concerns that the NALI/E provisions and current ATO views reflected in its guidance materials, among other things, can result in disproportionate tax outcomes, and should provide greater discretion to the ATO to deal with honest and inadvertent oversights. Our detailed response and recommendations to further improve the draft guidance are contained in Appendix A.