PCG 2017/9EC: Compendium
Document type: Compendium
Status: Draft

Generally, arrangements of the type referred to in the PCG are unlikely to be implemented by employers. To satisfy the requirements of the PCG, the trustee must have an absolute discretion to determine when the dividend equivalents payments are made. This results in the PCG having limited practical application. An example of the circumstance in which this PCG will be satisfied, in particular one that satisfies the second condition in paragraph 9 of PCG 2017/D9 should be provided. The Commissioner should consider issuing a safe harbour guideline (or amending the requirements in paragraph 9 of PCG 2017/D9) within which a trustee of an employee share trust (EST) can make dividend equivalent payments which are not taxable as remuneration or otherwise to employees and without breaching the sole activities test in subsection 130-85(4) of the Income Tax Assessment Act 1997. Such a safe harbour would provide greater practical utility than that currently provided. The safe harbour guideline should allow trustees of ESTs to make dividend equivalent payments to employees that are not assessable as remuneration where: Refer to the compendium of responses to the issues raised by external parties to Draft Taxation Determination TD 2017/D2 [1] .






Compendium: This is a compendium of responses to the issues raised by external parties to Draft Practical Compliance Guideline PCG 2017/D9 Dividend equivalent payments made by a trustee under an employee share scheme. This compendium of comments has been edited to maintain the anonymity of entities that have commented.

ATO Response/Action taken

Related rulings and determinations: TD 2017/26