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On 1 July, Minister Stephen Jones signed a new legislative instrument that will expand the code of ethics applicable to registered tax and BAS agents. The Tax Agent Services (Code of Professional Conduct) Determination 2024 is the latest in a string of changes to the Tax Agent Services regime, impacting registered tax and BAS agents.
This Determination sets out additional professional and ethical obligations for registered tax agents. These broadly include obligations:
- To uphold and promote the Code and to not engage in conduct that may undermine public trust and confidence in the integrity of the tax profession or tax system
- In relation to false or misleading statements to be made to the TPB or to the Commissioner of Taxation
- Requiring tax practitioners to take reasonable steps to identify, document, disclose, manage, mitigate, and, as appropriate, avoid material conflicts of interest related to their dealings with Australian government agencies
- Requiring tax practitioners to keep correct records of all tax agent services they provide, or which are provided on their behalf, to each of their clients, including former clients
- To ensure tax agents services provided, are provided competently.
This means that the code will now reside in both the Tax Agent Services Act 2009 (Cth) and this new Determination.
In December 2023, Treasury released an exposure draft of the proposed changes for consultation. The SMSF Association was one of nine associations in a Joint Bodies working group, representing members across the accounting, bookkeeping, financial planning, superannuation, and taxation professions. Together the Joint Bodies actively participated in discussions and consultations with Treasury and the TPB, culminating in a joint submission to Treasury.
The Joint Bodies were united in their concerns regarding the exposure draft Determination.
The SMSF Association firmly opposes this new Determination in its current form and urges a renewed consultation on these additional code obligations.
We are deeply concerned with the extremely short lead time from registration to commencement on 1 August 2024. This timeline is unrealistic and impractical, failing to provide sufficient time for the TPB to adequately prepare and consult on its guidance.
TPB guidance will be an essential tool in supporting tax agents understanding, implementation and compliance with these amendments. Noting that TPB guidance will be vital given the challenges in the statutory interpretation, broad drafting and conflicts arising from the language used in the Determination.
It is crucial to note that tax agents also need sufficient time to incorporate these changes in their practices.
With urgency, practitioners should immediately review their quality control manuals, procedures, and work papers to ensure you are compliant with existing obligations of the TPB, APES 110, and any additional obligations required by the Joint Accounting Bodies with whom you hold membership. Additionally, it is imperative you integrate the new obligations set out in the Determination without delay.
The TPB will commence consultations on draft guidance in the coming weeks. We will share the details of the TPB consultation when they are available and look forward to participating in the consultation process.
In the interim we will continue collaborating with the Joint Bodies to advocate for a workable solution and maintain our ongoing engagement with the TPB.
Written by Tracey Scotchbrook, Head of Policy and Advocacy