Tax administration Administration Tax Practitioners Board (TPB)

Tax Agent Services (Code of Professional Conduct) Determination 2023

Published Date: 23 Jan 2024


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The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, Financial Advice Association of Australia, the Institute of Public Accountants, the Institute of Certified Bookkeepers, National Tax & Accountants’ Association, the SMSF Association, and The Tax Institute (together, the Joint Bodies) write to you as the peak professional accounting and tax practitioner bodies in Australia representing the tax profession, the superannuation sector, and financial advisers. The Joint Bodies welcome the opportunity to make this submission to the Treasury in relation to the exposure draft of the Tax Agent Services (Code of Professional Conduct) Determination 2023 (draft Instrument) and accompanying explanatory materials (draft ES).

In the development of this submission, we have consulted with members of the Joint Bodies to form a whole of industry view that represents the tax profession.

The Joint Bodies acknowledge the Government’s efforts in designing the draft Instrument to ensure that the tax profession is held to the highest ethical standard, standards which the vast majority of the profession strives to achieve. We support all measures that intend to maintain or improve the integrity of our taxation and superannuation system and those who operate within it.

The Code of Professional Conduct (the Code) contained in the Tax Agent Services Act 2009 (Cth) (TASA) is one of the key mechanisms through which confidence in the operation and administration of our taxation and superannuation system is maintained. Noting the importance of the Code to the community and the tax profession, the Joint Bodies are of the view that it is important to ensure that any amendments effectively address identified shortcomings in the existing regulatory environment. Amendments to the Code also need to be effective at improving and strengthening the integrity of the taxation and superannuation system.

To achieve this, changes to the Code need to conform with the same, effective principle-based drafting approach as the existing Code and ensure the policy intent is clearly conveyed through detailed explanation in the draft ES. This will better allow tax practitioners to understand and ensure they meet their obligations, while providing the Tax Practitioners Board (TPB) with a clear, robust and unambiguous framework from which it can develop practical guidance. Our submission intends to assist the Government achieve this through suggested amendments to the draft Instrument and draft ES.

Keeping the Code of Conduct concise, clear and capable of practical application

The Code plays an integral role in the tax profession and for the broader taxpayer community. The Code is a central set of obligations that sets the standard expected from registered tax agents and BAS agents (tax practitioners).

At their core, the obligations contained in the Code:

  • promote honesty and integrity;
  • put the client first, subject to the law;
  • manage any conflicts of interest;
  • ensure that tax agent services are provided competently;
  • ensure that the taxation legislation is correctly applied;
  • require tax practitioners to undertake their dealings with the TPB and the Australian Taxation Office (ATO) in a timely and efficient manner; and
  • holistically promote confidence in the tax profession and administration of Australia’s taxation legislation.

Effective regulatory regimes

The two aspects of an effective regulatory regime have been identified as:

  • the legal structure (the rules), which must be easily understandable; and
  • the implementation of the rules (the regulation), which must be done in a predictable and consistent manner.

The Joint Bodies consider that, without the needed clarification, the draft Instrument may diminish and weaken the current TASA regulatory regime on both counts. We have set out below areas where we consider there are opportunities for improvement of what has been proposed.

First, the rules in the draft Instrument are not easily understandable. They are mostly either prescriptive (like standards) and/or vague (unfamiliar concepts), which makes them a poor framework for a code of conduct that was designed as a model of principles and ethics for tax practitioners to embody and implement in their practices, to regulate their conduct and how they operate and interact with clients and the tax system more broadly.

Second, in terms of implementation, the move away from a principle-based Code to a partly prescriptive Code represents a risk to the breadth and generality of the existing Code. There is a degree of duplication and overlap between the existing Code obligations and the proposed Code items even though section 5 of the draft Instrument states that the proposed Code items are intended to be ‘additional’. In our view, all the proposed Code items can be categorised as falling within one of the themes of the existing Code items, being ‘Honesty and integrity’, ‘Independence’, ‘Confidentiality’, ‘Competency’, and ‘Other responsibilities’.

From a statutory interpretation perspective, the introduction of new, explicit, obligations may create difficulties in their application. This is particularly problematic where existing Code items contain implicit obligations that reflect what is intended by the proposed Code items. This raises the potential question of whether there is inconsistency. We note that, to the extent that the Minister’s proposed Code items conflict with the Code they are of no effect. For this reason, we consider that the new prescriptive approach creates uncertainty and makes the future interpretation of aspects of the existing Code items less predictable and at greater risk of being interpreted contrary to their originally intended broad scope. This is an undesirable outcome for tax practitioners and the system as a whole as it would result in the changes not being sufficiently effective to strengthen the Code.

Clear, broad, flexible, and actionable principles are required

The obligations contained in the existing Code:

  • are generally underpinned by clear, broad, flexible, and actionable principles, and are supported by a framework that imposes sanctions on tax practitioners who do not meet their obligations; and
  • have been developed after extensive consideration through consultation with stakeholders (for the most part) during the Parliamentary process, with follow-up consultation with the TPB, and have been thoroughly tested in courts and tribunals.

The Joint Bodies are of the view that any modifications or additions to the Code should reflect best practice regulation, embody clear, broad, flexible and actionable principles, and should be supported by detailed guidance in the draft ES. We consider that the draft Instrument should be amended to ensure that it meets this standard.

Coherence of the Code is impaired

In the Joint Bodies’ review of the draft Instrument, we have identified some concerns in the drafting and interaction between the new and existing Code items that have the potential to substantially impair the coherency of the Code overall. These concerns include that there are duplications, incongruency and a level of prescription that ostensibly alters the Code from being one of broad principles (how to conduct yourself) to a detailed rule book of activities that must/must not be undertaken (what actions to take and by when, or what actions not to take). We also observe that the existing Code comprises primarily positive duties, whereas the new Code items are predominantly negative duties (prohibitions).

There appears to be no discernible policy reason for altering the legislative scheme in these significant ways for a part of the Code. The Code’s core purpose seems to be dislocated and undermined by this approach. This results in an impairment of the coherence of the Code, which makes it very difficult to read and reconcile as a whole.

Government’s regulatory reform agenda

The amendments should also meet the objectives of the Government’s regulatory reform agenda to ‘boost Australia’s productivity and lower the cost of living by ensuring a fit for purpose regulatory environment.’

The Government states that its goal to boost productivity across the economy can be achieved ‘through reducing unnecessary or duplicative regulatory costs’, and ‘identifying opportunities to improve the quality of regulation’. The Joint Bodies consider that the draft Instrument, as currently proposed, is unlikely to advance or achieve these objectives.

As the tax profession predominantly consists of small and micro businesses, they are sensitive to the burdens of highly prescriptive rather than flexible regulation, especially where those prescriptive requirements are tied to very serious consequences flowing from breaches of the Code, which can include termination of registration. We also note that the Government’s regulatory reform agenda concerns ‘building trust in government and its institutions’ and ‘putting business and community at the centre of policy and services.’ We consider that amendments to the draft Instrument should be made to enable efficiencies and better balance the impact on tax practitioners to promote productivity.

Amendments to the draft Instrument

We consider that some of the proposed obligations in the draft Instrument need clarification, particularly in respect of obligations that propose to:

  • collectively promote confidence in the tax profession;
  • promote the Code;
  • keep proper client records;
  • ensure tax practitioners’ staff maintain their skills and knowledge relevant to the tax agent services they are providing; and
  • ensure there are internal quality assurance processes relating to the Code.

Duplication of obligations

The draft Instrument proposes to effectively duplicate the obligation for tax practitioners to not make false or misleading statements to the TPB or ATO. The taxation legislation already contains a robust and extensive framework for tax practitioners who make false or misleading statements. The proposed additional obligation may result in tax practitioners being liable for multiple categories of sanctions in respect of the same act, potentially resulting in a duplication of punishments.

A similar concern exists for the breach reporting (‘dob-in’) provisions and the proposed additional obligation for tax practitioners to hold each other accountable. We consider that these proposed obligations are not needed given the existing framework.

Notifications to clients

We also consider that the proposed obligation contained in subsection 45(a) — relating to tax practitioners notifying clients of matters that would impact their decision to engage that practitioner for tax agent services — requires amendment. The wording in the draft Instrument appears to extend the requirement to provide notice to a wider range of matters than factors relating to the fitness and propriety of the practitioner to provide tax agent services, as described in the draft ES. Its application to ‘prospective clients’ is also overly broad, particularly as this may lead to premature disclosures.

Further, this proposed obligation will apply retrospectively if the draft Instrument is registered as drafted. We consider that the reporting obligations should commence after the date of registration for the instrument and apply to matters occurring on or after that date. Consideration should be given to whether a brief delay in start time would be appropriate to allow tax practitioners time to better understand this obligation.

Our detailed response is contained in Appendix A.


  • Published On:23 Jan 2024

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Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

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Tax administration Administration Tax Practitioners Board (TPB)

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