Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

ATO reveals approach to NALE under NALI provisions

The Australian Taxation Office has announced how it will apply the non-arm’s length income provisions to “non-arm’s length expenditure” in its latest practical compliance guideline.

SMSF Adrian Flores 02 June 2020
— 1 minute read

In PCG2020/5 released yesterday, the ATO sets out a transitional compliance approach for a complying superannuation entity concerning the application of the amendments to section 295-550 of the Income Tax Assessment Act 1997, where a superannuation entity incurs certain non-arm’s length expenditure (or where expenditure is not incurred) in gaining or producing ordinary or statutory income.


The regulator said PCG2020/5 should be read in conjunction with draft Law Companion Ruling LCR 2019/D3 Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement.

In the guide, the ATO defined a complying superannuation entity as a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust.

“The ATO will not allocate compliance resources to determine whether the NALI provisions apply to a complying superannuation fund for the 2018–19, 2019–20 and 2020–21 income years where the fund incurred non-arm’s length expenditure of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in those respective income years (for example, non-arm’s length expenditure on accounting services),” the regulator said.

“This transitional compliance approach does not apply where the fund incurred non-arm’s length expenditure that directly related to the fund deriving particular ordinary or statutory income.”

ATO reveals approach to NALE under NALI provisions
image intro
accountantsdaily logo

The Accountants Daily 30 Under 30 Awards
This prestigious awards ceremony is the benchmark for excellence, recognising the industry’s most distinguished professionals, aged 30 and under across Australia, highlighting their outstanding achievements and dedication within the industry. Register to the waitlist today to be first in line for updates on when tickets to attend become available, visit accountantsdaily30under30.com.au to join the waitlist.