Under the Tax Agent Services Act 2009 (TASA), the Australian Government has issued the Code Determination which extends the ethical obligations of tax practitioners under the Code of Professional Conduct (Code).

Recommendation 5.1, which was accepted by the Australian Government, from the 2019 independent review into the effectiveness of the Tax Practitioners Board (TPB) and the Tax Agent Services Act 2009 (TASA) recommended:

The relevant Minister be given a legislative instrument power to be able to supplement the Code of Professional Conduct to address emerging or existing behaviours and practices. The legislative instrument process would also ensure appropriate consultation with key stakeholders and parliamentary oversight.

Further, on 6 August 2023, the government announced a significant package of reforms that would crack down on misconduct and rebuild people’s confidence in the systems and structures that would keep our tax system and capital markets strong. These reforms were aimed at strengthening the integrity of the tax system, increasing the powers of our regulators and strengthening regulatory frameworks to ensure they are fit for purpose.

One element of the package was supplementing the Code – which the new Code items give effect to.

The government has an ongoing program of tax and regulatory reforms to address tax practitioner misconduct and to improve community confidence in the integrity of the system. These reforms support a level playing field for the majority of tax practitioners doing the right thing.

In December 2023, the government released a draft Tax Agent Services (Code of Professional Conduct) Determination 2023 (the draft determination) and explanatory materials for a 6-week public consultation period.  

Discussions with a range of stakeholders were also undertaken after release of the exposure draft, including with TPB Governance and Standards Forum and Consultative Forum. 

Following consideration of all feedback, the Tax Agent Services (Code of Professional Conduct) Determination 2024 (Determination) was registered on 2 July 2024, which included 8 additional obligations for tax practitioners under the Code.

On 8 October 2024, following additional stakeholder feedback, the government amended the Determination to provide greater certainty on certain Code obligations and to clarify the intent and scope of the new obligations.

The Determination is available on the Federal Register of Legislation.

The new ethical requirements address a range of professional standards, including:

• Upholding and promoting the ethical standards of the tax profession.
• Addressing false or misleading statements.
• Managing conflicts of interest when undertaking activities for government and maintaining confidentiality in dealings with government.
• Keeping proper client records.
• Ensuring competency of services provided and having quality management systems in place.
• Keeping clients informed.

The new Code obligations commence on:

• 1 July 2025 - for tax practitioners with 100 or less employees as at 31 July 2024, including new tax practitioners (with 100 or less employees) that register between 1 August 2024 and 30 June 2025 inclusive; and
• 1 January 2025 - for any other tax practitioners.

The delayed commencement date provides time for tax practitioners to develop, implement and update systems and processes necessary to meet their obligations by the relevant commencement date.

The 100-person test is limited to employees, which takes its common law meaning.

The purpose of the recent reform is to ensure there is consistency in standards across the profession and to ensure a level playing field for all registered tax practitioners. Many tax practitioners are doing the right thing. For those trying to do the right thing, these new requirements, along with our guidance, help lift processes and practices to best practice, which will help protect tax practitioners and their business.

No, the new obligations complement and do not conflict with the existing Code obligations, noting that tax practitioners can disclose a client’s information to a third party where there is a legal duty to do so.

There are a range of existing circumstances where disclosure of information to regulatory agencies takes priority over tax practitioners’ obligations to maintain client confidentiality. These circumstances are the exception, but reflect situations where tax practitioners’ duty to maintain public trust in the tax system, and tax profession, is more critical than their duty to their clients. This will also best protect you and your practice. 

We have issued the following suite of information sheets covering all the new obligations, following public consultation and working closely with our stakeholders, including professional associations and the tax practitioner community:

• Upholding and promoting the ethical standards of the tax profession (TPB(I) D44/2024)
• False or misleading statements (TPB(I) 45/2024)
• Managing conflicts of interest when undertaking activities for government and maintaining confidentiality in dealings with government (TPB(I) 46/2024)
• Obligation to keep proper client records of tax agent services provided (TPB(I) 47/2024)
• Supervision, competency and quality management system under the Tax Agent Services Act 2009 (TPB(I) 48/2024)
• Keeping your clients informed TPB(I) 49/2024).

We will complement the information sheets (which includes practical case studies), with webinars and factsheet summaries, to ensure tax practitioners can review and update their systems and process, as necessary.  

We ran a series of webinars to explain the new obligations and you can access the recordings of these webinars from our Webinar resources hub page.  We will run more webinars in the new year to further support tax practitioners.

How a tax practitioner meets the existing and new obligations has always and will always need to be determined on a case-by-case basis, having regard to individual circumstances. We recognise small practices operate differently to large firms. Consistent with our approach to our other guidance, we will set requirements that apply to all tax practitioners, however, how a tax practitioner meets those requirements will need to be assessed against a number of factors, including the tax practitioner’s business model, the nature and size of your client base and the type of tax services provided.

Our guidance provides additional information in the context of small practices.

The 8 additional obligations build on the existing principles of the Code, including honesty and integrity, independence, confidentiality and competence. Most tax practitioners, acting professionally and ethically, will readily comply with the new Code obligations. 

We have issued information sheets, which provide detailed information about how the new Code obligations operate and will also help you improve your services to clients and systems to comply with the law. To complement the information sheets, we have published a summary of these obligations on our website as web content which can be accessed via tpb.gov.au/code. A suite of factsheets on the new obligations will also be available on our website early in the new year. 

The additional obligations also leverage material from the work of other existing bodies, such as the Accounting Professional & Ethical Standards Board, which has developed and released substantial guidance material. Other elements of the Code build on well-known and understood tax and corporate law concepts that tax practitioners will be regularly advising clients on.

The government introduced a rule to delay the commencement of the new obligations to provide time for you to develop, implement and update systems and processes necessary to meet your obligations by the relevant commencement date.

Our priority is to educate tax practitioners so you understand what is required of you prior to commencement of the new obligations.

Upon commencement of the new obligations, we will continue to educate and support tax practitioners, with investigations and sanctions reserved for the higher risk and serious cases of non-compliance.

Without limiting the scope of the obligation, depending on the size and structure of your practice, it could include:

• providing training and resources on complying with the Code
• introducing and actively undertaking processes to manage underperformance in relation to breaches of the Code
• instituting mechanisms for staff to report and address concerns about conduct that may breach the Code
• providing appropriate and adequate protection for staff that report conduct that may breach the Code
• providing directions to staff not to engage in specific conduct where that conduct may result in a breach of the Code
• maintaining appropriate records relating to potential breaches of the Code
• processes for amending or correcting false or misleading statements in documents or conversations
• having recruitment processes that include police checks, checks of the TPB’s register and checks to test whether someone is a disqualified entity
• encouraging compliance with the Code when considering remuneration, including promotions and bonuses, as well as in other human resource policies
• developing a culture of transparency, accountability, ethical conduct, and compliance with the Code and with the tax laws. 

See our guidance for more information.

Some examples of conduct we would consider to be likely evidence of a breach are:

• not removing staff from a project or work area where there are reasonable concerns about potential unethical conduct relating to the project or work area
• asking not to be informed of, or for appropriate records to be made of, information relating to potential breaches of the Code
• destroying evidence relating to any potential breach of the Code
• taking or threatening any adverse action against an individual who raises concerns about potentially unethical conduct
• rewarding or encouraging an individual in relation to conduct that is unethical or not discouraging such unethical behaviour
• misuse of legal professional privilege (LPP).

The obligations under section 15 will only apply if you have been involved in making or preparing, or directing someone else to make or prepare the statement for the new client. Further, before you have to notify the ATO or TPB of your concerns with a client and the making of a false or misleading statement, there are a number of tests that must first be satisfied, including:

• has the statement been given to the ATO or TPB
• are there reasonable grounds to believe the statement was false or misleading in a material particular
• have you advised your client the statement must be corrected and the possible consequences of not taking corrective action 
• are you reasonably satisfied the client has not corrected the statement or explained the basis for the statement
• do you have reasonable grounds to believe the statement resulted from recklessness or intentional disregard of a taxation law
• do you have reasonable grounds to believe your client’s actions have caused, are causing, or may still cause, substantial harm to the interests of others (including investors, creditors, employees, or the public)?

Our guidance contains a flow chart that has more information on the steps you must take in different situations.

Ultimately the responsibility will sit with the registered tax practitioner entity that is engaged by, and receiving the fees from, the client. We address this in our Information sheet. 

However, the company will need to have appropriate controls and procedures in place to ensure false or misleading statements are appropriately identified, managed and actioned. 

It will depend on the circumstances, however a registered tax practitioner should consider: 

• the nature of the statement 
• the circumstances of the client 
• the details that were false or misleading 
• how long ago the statement was made 
• the relevant period of review
• any timeframe set out in a taxation law for the lodgement of the statement or a correction to the statement; and
• any other relevant matter.

 Our guidance provides further information to assist you. 

When considering if substantial harm has been caused to the interests of others (including investors, creditors, employees, or the public), you should consider all relevant matters including:

• whether the client’s actions have resulted, are resulting, or may result, in serious adverse consequences to others in either financial or non-financial terms
• any of the rights and obligations under the taxation laws (as are relevant)
• the appropriateness and timeliness of the client’s response to the registered tax practitioner’s advice that the statement should be corrected (including any information that would lead the registered tax practitioner to conclude that the client lacks integrity)  
• the urgency of the situation. 

Our guidance provides additional matters that might assist in determining if a client’s actions have caused, are causing or may still cause, substantial harm to the interests of others.

What is in the ‘public interest’ requires consideration of matters that are relevant to supporting the public trust and confidence in the integrity of the tax profession and of the tax system. Refer to our guidance for further information.

To have ‘reasonable grounds to believe’ about a matter, you do not have to have conclusive proof. It is sufficient if a reasonable person, possessing the required knowledge, skill and experience of a registered tax practitioner would, when objectively considered, form the belief on the same grounds in the same circumstances.

To make a decision you will need to analyse the circumstances and consider a number of factors, including but not limited to:

• the source of the information forming the basis of the belief and the credibility and reliability of that source/information
• whether there is independent evidence, verification or corroboration to support the belief 
• the circumstances in which you became aware of the possibility the statement is false or misleading and/or that the false or misleading nature of the statement resulted from recklessness or an intentional disregard of a taxation law 
• whether, and to what extent, the registered tax practitioner made reasonable enquiries or sought advice to confirm the belief
• whether there are any reasonable alternative explanations that could counter the belief.

It can relate to both. Our guidance addresses this in more detail, but at a high level it will generally come down to whether it will be relevant to a decision maker making a decision about the matter to which the particular relates. A good place to start would be to ask, 'would the ATO or TPB consider this particular when making a decision about the matter at hand?'. 

If you are not reasonably satisfied that they have corrected the statement within a reasonable period, or otherwise explained the false or misleading statement, you will need to, depending on the circumstances, withdraw from the engagement, notify the ATO and/or TPB and take any additional action in the public interest. The action required will depend on the circumstances. 

That assessment will be made by the registered tax practitioner in the first instance. If the matter comes up in a compliance setting, we will consider all the relevant facts and circumstances to ascertain whether the false or misleading statement is material (as well as all of the elements of section 15) and whether there has been a breach by the tax practitioner in question. 

The phrase ‘knows or ought reasonably to know’ includes actual and constructive knowledge. The nature of constructive knowledge is that the registered tax practitioner will be taken to have the knowledge of matters that, a reasonable and honest tax practitioner in their position will have in the circumstances. We explain this more in our guidance. 

In the context of section 20 (conflicts of interest in activities undertaken for government) a conflict of interest is where a tax practitioner has a personal interest or has a duty to another person which is in conflict with the duty owed to the Australian government agency.

A conflict of interest may be direct or indirect, and real or apparent (or perceived). Also, it can arise before you accept an engagement or at any time during the engagement. 

A real conflict of interest arises where a tax practitioner has multiple competing interests and cannot objectively and impartially act in one of the interests. 

An apparent conflict of interest arises where a tax practitioner has multiple interests, and the nature of those interests give rise to a reasonable perception by the public that one interest could possibly impact the motivation to act impartially for another interest. Put another way, an apparent conflict of interest arises if a fair-minded lay observer might reasonably conclude the tax practitioner might not bring an impartial mind to the activities they are engaged to undertake.

For further information on conflicts of interest, refer to our guidance.

You should notify the Australian government agency of any conflict of interest as soon as it arises. In circumstances where you identify and disclose a material conflict of interest to an Australian government agency, the continued engagement by the agency will be at the discretion of the agency having regard to the nature of the conflict and any steps taken to manage or mitigate the conflict. This recognises that government agencies should be able to engage appropriate expertise who act independently and with integrity in undertaking activities to assist in shaping the Australian taxation and superannuation system.

The test of whether a conflict of interest is ‘material’ will depend on the facts and circumstances and whether a reasonable person, having the knowledge, skill and experience of a registered tax practitioner, would expect it to be of substantial import, effect or consequence to the other entity.

This requires you to exercise your professional judgement, considering the facts and circumstances surrounding the activities you are undertaking for the government agency, including the:

• information known to you about the activities, and 
• consequences for the government agency if your personal interest is such that it could give rise to a real or apparent conflict of interest that could affect your ability to discharge your duties and/or obligations to the government agency.

See our guidance for more information on when a material conflict of interest may arise.

Whether you have taken reasonable steps to identify and document a material conflict of interest will be a question of fact having regard to the particular circumstances. Relevant factors we may consider include:

• the size of your entity
• the type of work undertaken 
• your client base 
• the likelihood of conflicts of interest arising 
• the sensitive nature of the activities undertaken for the government 
• any possible adverse consequences for the government agency 
• whether you have provided relevant training to staff and have established procedures for the disclosure and record-keeping of potential conflicts of interest
• whether you have established procedures for identifying and documenting conflicts of interest.

Our view is that a tax practitioner, much like a director, other officer or employee of a corporation, is in a position of trust and confidence when engaging with a government agency. Any confidential information obtained from the agency in connection with activities you undertake with the agency in your professional capacity, that is used for a purpose other than the purpose for which it was intended, would be considered to have been used for your personal interests or advantage.

There does not have to be a guaranteed personal advantage – the mere possibility the information has the potential to result in a personal advantage is enough to trigger the obligation. Further, it is not necessary that the advantage or benefit gained be characterised in financial terms.

To reasonably manage and mitigate a conflict of interest you should ensure you:

• assess and evaluate the conflict of interest
• implement appropriate mechanisms to manage or control the impact of the conflict of interest on your advice or decisions, or the decisions of the government agency
• implement appropriate mechanisms to mitigate the conflict of interest.

For example, you could:

• enforce procedures for managing, mitigating, and avoiding conflicts of interest
• allocate staff to projects in a way that manages or avoids potential conflicts of interest, for example, by not allocating staff with conflicts to certain projects or tasks
• have internal governance policies in relation to conflicts of interest that include consequences for failing to comply with those procedures
• maintain a conflict of interest register and information handling procedures that utilise technology to limit information access to those with a legitimate need to know.

The term ‘Australian government agency’ is defined in the Income Tax Assessment Act 1997 as the Commonwealth, a State or a Territory, or an authority of the Commonwealth, or of a State or a Territory. Examples include the Department of the Treasury, TPB, ATO, Australian Securities and Investments Commission, Australian Competition and Consumer Commission, Department of Education and Training Victoria, and NSW Health. 

Unless you have the government agency’s authorisation (express or implied) to share the information with your employees, you cannot disclose information received in connection with activities you undertake with the agency with your employees. 

In addition, the information you receive cannot be used for the personal advantage of your employees unless the agency authorised the information to be used in a way that would provide for such an advantage. This ensures that any potential indirect benefits do not flow to you through the unauthorised disclosure of such information for the personal advantage of others. It’s important to understand that if you were found to have breached the Determination for making unauthorised disclosures of the confidential information, it is possible you may also be found to have breached other Code items (such as acting with honesty and integrity and the fit and proper person requirements). 

It would be reasonable to conclude that further disclosure is authorised in each of the following circumstances:

• where there are no communications from the government agency indicating the information has been supplied in confidence 
• where there are no communications from the Australian government agency indicating the reproduction or disclosure is somehow qualified 
• the information is not protected under law from disclosure
• it is not generally accepted that information of this type or nature would be held in confidence. 

See our guidance for some practical case study examples.

To comply with section 30 of the Determination, you are required to keep records that correctly record the tax agent services you have provided, or that are provided on your behalf, to each of your clients, including former clients. The records must: 

• be in English, or readily accessible and easily convertible into English 
• be retained for at least 5 years after the service has been provided
• show the nature, scope and outcome of the tax agent services provided
• reference information reasonably considered in the provision of the tax agent service
• include all advice received from the client
• include all advice provided to the client, and for more complex matters:
  • the relevant facts
  • assumptions and reasoning underpinning any advice provided (including the basis on which, and the method by which, any calculations, determinations, or estimates used, have been made).

We do not require, or recommend, you keep and retain originals or copies of any identification documents of clients and/or their representatives due to the risks of physical and cyber identity theft. 

However, we require records of proof of identity checks undertaken in relation to each client (for example, by way of a checklist) for a minimum of 5 years after the engagement has ceased. See more information on client verification process for tax practitioners.

The records can be kept and retained in paper or electronic format.

Electronic records must be readily accessible and able to be retrieved as required. It is generally not necessary to retain a hard copy of the information contained in an electronic record unless a particular law or regulation requires it.

If you make copies of paper or electronic records, they must be a true and clear copy of the original record.

Importantly, you should have adequate procedures, policies, systems and controls in place to:

• protect the security and confidentiality of client records; and
• ensure client information is not comprised and mitigate the risk of identity theft, fraud, financial loss and reputational damage. 

Our guidance contains more information. 

We do not prescribe any types of software or formats for keeping appropriate records. You can choose your preferred method for record keeping, provided it complies with the requirements under section 30 of the Code Determination.

Have a look at our guidance about record keeping for more information.

No, not necessarily.  The new obligations do not specify any particular method for how relevant knowledge and skills are to be maintained by those that provide tax agent services on your behalf.  Formal training and on-the-job training will continue to be something you will need to consider in relation to each employee and in relation to each service an employee is authorised to perform.

No, there is no legislative requirement for tax practitioners to undertake policy checks on current or potential staff.

 However, you should consider our guidance in respect of disqualified entities, which sets out some minimum checks for certain individuals and entities involved in the provision of tax agent and BAS services.

The level of supervision required will depend on the circumstances, for example, the experience and skills of the staff member, the complexity of the work they are completing, the risk involved in the services provided, the circumstances of the client concerned, and so on. For more information see our guidance.

In terms of supervision, you need to ensure:

• there are adequate supervisory and review arrangements
• internal procedures are used to satisfy supervisory and control requirements, which may include activities such as: 
  • training for offshore staff in Australian tax
  • tax practitioners or other experts being onsite overseas
  • rotation for overseas staff to gain experience
  • appropriate quality assurance and review systems
  • tax practitioners are involved so that the work being completed overseas is considered competent for Australian tax law purposes
  • tax practitioners are meeting their requirements for maintaining knowledge and skills relevant to the services they’re providing
  • tax practitioners are maintaining competence by continuing awareness, understanding and up-to-date knowledge of relevant technical, legal and business developments.
     

No, not necessarily. The obligations do not specify any particular method for how relevant knowledge and skills are to be maintained by those that provide tax agent services on your behalf. Formal training and on-the-job training is one factor to consider, depending on your circumstances.

No, not necessarily. We understand that quality control systems for a sole trader will be different to those for mid to large size firms. This is reflected in our guidance. 

A system of quality management includes policies and procedures relating to:

• governance and leadership
• monitoring of performance
• adherence to the Code of Professional Conduct
• client engagement
• proper keeping of records
• protecting confidentiality of information
• the management of conflicts of interest; and 
• the recruitment, training and management of employees.

We have more information in our guidance. 

No.

Section 45 of the Code Determination prescribes the specific matters you must inform your clients about and this does not include information relating to your physical or mental health. 

Section 45 of the Determination ensures clients are provided with all the information that is reasonably relevant to them to make informed decisions as to whether to engage (or continue to engage) a registered tax practitioner, and to ensure the tax practitioner they engage to act on their behalf is the right professional. The obligation requires registered tax practitioners to advise all current and prospective clients of:

1.  the TPB’s register of tax agents and BAS agents and how clients can access and search the register
2. how clients can make a complaint about a tax agent service provided by a registered tax practitioner, including the complaints process of the TPB
3. general information about:
   • the registered tax practitioner’s rights, responsibilities and obligations as a registered tax practitioner, including to their client, under the taxation laws 
   • what obligations clients have to their registered tax practitioner
4. if any prescribed events have occurred within the last 5 years
5. if the registration of the registered tax practitioner is subject to conditions.

For more information, including information about prescribed events, refer to our guidance. 
 

You must notify to all current and prospective clients in writing in a prominent, clear and unambiguous way. This requirement is intended to provide flexibility, allowing you to choose your preferred way to advise clients.

While not limiting the ways in which you can satisfy the requirement to keep clients informed, we will consider the requirement to have been met if you:

1. publish the information on a publicly accessible website that you use to promote the tax agent services you offer (if any), 
2.  include the information in letters of engagement or re-engagement (as the case requires), given to each client, and
3. provide clients, upon engagement or re-engagement (as the case requires), with a copy of our factsheet on general information for clients.

If you do not have a publicly accessible website that you use to promote tax agent services you offer, we will consider the requirement under s45 to have been met if you undertake steps 2 and 3 above.

No, this is not required under the new Code obligations. Have a look at our guidance that lists the specific matters, events and circumstances that you must disclose to your clients.

Prospective clients include individuals and entities that have directly contacted you about seeking an engagement for the provision of tax agent or BAS services, but are yet to engage you. This contact could include, for example, by email, phone or website form. 

A prospective client also includes an individual or entity that has received a tax agent service previously from a registered tax practitioner, but it remains unclear whether the individual or entity intends to re-engage the tax practitioner.

Yes, the new Code obligations apply to all registered tax practitioners, including BAS agents.

No, the requirement is limited to events impacting on the registered tax practitioners. 

When determining what events have occurred within the last 5 years, the look back period is to be calculated by reference to the time an inquiry to engage or re-engage is received by the registered tax practitioner from the client. 
However, the 5-year look back period does not apply to events which occurred before 1 July 2022.

You must notify your clients of a prescribed event at the time a client makes inquiries to engage or re-engage you.

For an existing client not previously advised of the information, you must advise the client within 30 days of the event. The 30 days will commence on 1 January 2025 or 1 July 2025, depending on when the obligation applies to you.

For more information, including information about the application date, refer to our guidance on keeping your clients informed.