The government has agreed to further changes to the code of professional conduct for tax agents following ongoing industry advocacy and will table a finalised version in parliament in the coming days.
Chartered Accountants Australia and New Zealand group executive – advocacy Simon Grant said the efforts of joint professional bodies had led to changes in section 12(2) and section 45 of the Tax Agent Services (Code of Professional Conduct) Amendment (Measures No.2) Determination 2024 which were of concern to the bodies.
“We are pleased to see that after significant negotiation, section 45 is now completely revised. It lists specific matters for disclosure and is more closely aligned to the policy intent of the provisions and, importantly, investigations and mental health will not have to be disclosed,” Grant noted.
If implemented without change section 45 would have required tax professionals to advise all current and prospective clients of ‘any matter’ dating back to 1 July 2022 that could ‘significantly influence’ a decision of that individual to engage with them.
The finalised section 45 is now limited to matters related to bankruptcy, tax, fraud or dishonesty offences, a prison sentence, or the registration of a tax agent being suspended or terminated by the Tax Practitioners Board (TPB).
Grant added significant revisions to section 15(2), which required tax practitioners to report clients which refused to correct a material false, misleading or incorrect statement, were now more consistent with other obligations required of practitioners.
“We believe the amended version – which raises the threshold to serious matters and is aligned to members’ existing obligations under the non-compliance with laws and regulations requirements in APES 110 (the Code of Ethics) issued by the Accounting Professional and Ethical Standards Board – is a pragmatic outcome,” he recognised.
The Institute of Financial Professional Australia (IFPA) stated as a result of the changes a planned disallowance motion in the Senate had been withdrawn but the determination was still excessive and an over-reaction.
“The eight additional Code of Conduct obligations imposed on practitioners by the determination made by the minister on 1 July are, in our view, somewhat of an over-reaction to a once-off brain fade that happened at a Big 4 firm,” IFPA stated in a statement to members.
“Yet the political forces this isolated episode have unleashed are going to have an unwarranted and disproportionate impact on smaller practitioners.
“While the consultation process has resulted in significant improvements to the original determination, the “dob-in” requirement in relation to clients who refuse to rectify a false or misleading statement remains – albeit with a much higher threshold.
“The law has also grown a lot more complex, which can often be an unavoidable trade-off when the consultation process identifies areas that need to be more precisely targeted. Hopefully the TPB can produce guidance material that makes it easier rather than more difficult to comply with the new regime.”
The joint bodies are made up of the Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, Financial Advice Association of Australia, Institute of Certified Bookkeepers, Institute of Financial Professionals Australia, Institute of Public Accountants, National Tax and Accountants’ Association, SMSF Association and The Tax Institute.
