Tax rules for personal services income

The tax legislation contains special rules about personal services income (PSI). The PSI rules are aimed at ensuring individuals cannot reduce or defer their income tax by alienating or splitting their PSI through the use of interposed companies, partnerships or trusts. An interposed entity is called a personal services entity (PSE). The ATO recently released a new taxation ruling (TR 2022/3) which considers how to identify PSI and how the PSI rules apply to an individual or entity. Talk to us about whether the PSI rules may apply to you.