Who is covered under this obligation

Examples of records that must be kept

We consider that, at a minimum, you must keep and retain the following types of records: 

• client details – name, contact information, date of birth, bank and employment details
• letters of engagement (or other agreement setting out the terms and conditions of the engagement) 
• file notes relating to proof of identity or client verification checks undertaken, including relevant authorising documentation for representatives of clients (noting that we do not recommend that you keep copies of identity documents) 
• client permissions (including consent to disclose client information) 
• agreements to offshore or outsource services to clients, including confidentiality agreements
• records that explain or evidence an essential part or element of the tax agent service provided to the client, or steps taken to provide the service (for example, advice or opinions provided to the client and records of source documents sighted or reviewed to ascertain the client’s state of affairs)
• key communications and records of discussion with the client, including requests for further information and responses
• key communications with third parties in connection with the provision of the service, including the Australian Taxation Office (ATO) and other government agencies 
• copies of advice received from third party advisers or consultants (for example, any advice you may have sought from lawyers or consultants on behalf of your client) relevant to the tax agent service provided
• tax invoices issued to the client evidencing the nature of tax agent services provided
• records that a client must keep and retain under a taxation law, where the record is: 
  • essential to explaining or evidencing an essential part or element of the tax agent service provided to the client (or steps taken to provide the service); and/or
  • subject to a recordkeeping agreement between you and your client, in which you have agreed to keep and retain the record for the client
• records evidencing the receipt and handling of money or property held in trust and disbursement instructions and authorities in connection with the provision of the tax agent service
• other records that evidence compliance or non-compliance with the Code of Professional Conduct as it relates to the provision of tax agent services to clients.

We do not expect you to record every detail relating to a tax agent service. When deciding what records to keep and whether they contain adequate detail, you must exercise your professional judgement. It is not necessary for separate records to be kept and retained for different services if the same record explains more than one service (or part of a service) provided to a client. It is also not necessary to duplicate the general accounting records of a client that you obtained to provide a tax agent service.

How should records be kept

Records can be kept and retained in paper or electronic format. Electronic records must be in a form that is 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 you to retain a paper copy.

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

If you provide the service in Australia, the records should be kept in English. If the service is provided in a country outside Australia (for example, under an outsourcing or offshoring arrangement), the records can be kept in another language, provided they are readily accessible and easily translated to English.

You should have adequate procedures, policies, systems and controls in place to protect the security and confidentiality of client records, ensure client information is not compromised and mitigate the risk of identity theft, fraud, financial loss and reputational damage. Records should also be made and stored in a way that protects the record and information from being changed or damaged.

You must retain records for at least 5 years after the tax agent service has been provided. A tax agent service is considered to have been ‘provided' from the date the service is complete. When a service is considered complete will be determined based on the facts and circumstances of the engagement. 

Generally, there are no mandatory requirements to return, destroy or de-identify client records or information after a certain period or an engagement has ended. However, once the 5-year period has lapsed, you should consider whether you need to take steps to return, de-identify and/or destroy records (as appropriate), having regard to any recordkeeping arrangement with the client and relevant privacy laws.