TPB releases draft guidance on code of conduct changes

This article was current at the time of publication.

The Tax Practitioners Board (TPB) has released draft policy guidance for public consultation. This will help tax practitioners understand their additional obligations under the final version of the Tax Agents Services (Code of Professional Conduct) Determination 2024.

The Determination is part of the package of reforms announced by the Federal Government in August 2023 when it said it would “crack down on misconduct and rebuild people’s confidence in the systems and structures that keep our tax system and capital markets strong”.

The new Code Determination extends the ethical obligations of tax practitioners under the Code.

These obligations extend the TPB’s Code sections on Honesty and integrity, Independence, Confidentiality, Competence, and Other responsibilities.

TPB takes pragmatic approach

“Our practical guidance supports the majority of tax practitioners doing the right thing,” says TPB Chair Peter de Cure. 

“At the same time, improved tax practitioner standards will help address false or misleading tax statements associated with tax avoidance and fraud.”

De Cure says the draft guidance supports trust in the tax profession, covering a range of practical issues to ensure competent services, supported by quality management systems and improved client transparency.

The TPB says it will be taking a pragmatic approach to implementing the requirements once the new Code obligations commence.

This includes providing practitioners, including BAS agents, with a reasonable time to understand their obligations and to assess their own practice and implement changes, if required, to comply with the new obligations.

How small firms differ

The TPB says its priority is to “educate and support practitioners, with investigations and sanctions reserved for the higher risk and serious cases of non-compliance”.

Just how tax practitioners meet their obligations will be determined on a case-by-case basis, considering individual circumstances.

The TPB recognises that 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 provide.”

Starting dates

The starting dates have been staggered, but once operational they will apply to all practices, regardless of size.

1 July 2025 is the starting date for firms with 100 employees or less (as of 31 July 2024). This includes new tax practitioners - with 100 or less employees - that register between 1 August 2024 and 30 June 2025 inclusive. For firms with 101 employees or more, the red-letter day is 1 January 2025.

Expanding industry consultation

“In developing the draft guidance, we held two roundtable discussions with professional bodies and consumer groups, seeking their initial views,” De Cure says.

“Recognising the key role professional associations have in the co-regulation of tax practitioners, their engagement and practical insights have been invaluable in informing and improving our draft guidance. 

“We look forward to expanding our consultation processes and continuing to work closely with all stakeholders and the tax profession. This will ensure the final guidance is practical and supports tax practitioners.”

CPA Australia’s input

CPA Australia reviewed the draft information sheets (see below) and provided input, prior to public release.

“We will continue to review the draft guidance during the public consultation period and make submissions on relevant matters,” says Neville Birthisel, CPA Australia’s Adviser, Regulation and Standards.

“During the consultation period, we also welcome feedback from CPA Australia members on the proposed guidance.

“As noted by TPB chair Peter de Cure, most tax practitioners are doing the right thing. This is something we have been at pains to emphasise throughout the development of the Determination, so we are pleased to see the guidance is being produced in this context.

“We look forward to working with the TPB to ensure the guidance reflects the mutual understanding of the Assistant Treasurer’s office and the professional bodies.”

Practitioner support

Draft information sheets

1. Upholding and promoting the ethical standards of the tax profession (TPB(I) D56/2024)
2. False or misleading statements (TPB(I) D57/2024)
3. Managing conflicts of interest when undertaking activities for government and maintaining confidentiality in dealings with government (TPB(I) D58/2024)
4. Obligation to keep proper client records of tax agent services provided (TPB(I) D59/2024)
5. Supervision, competency and quality management under the Tax Agent Services Act 2009 (TPB(I) D60/2024)
6. Keeping your clients informed (TPB(I) D61/2024).

With the aim of finalising guidance in December 2024, the TPB will also be issuing complementary material, such as factsheets and website content, to assist tax practitioners understand the new requirements.

The TPB also has updated the Frequently asked questions on the new Code obligations, published on its website, to address some common queries about the Determination.

It is also running a series of webinars to explain the obligations on practitioners detailed in the Determination.