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The TPB has assured tax practitioners that it will take a transitional approach with the breach reporting requirements with many feeling uncertain about the upcoming obligations.
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Practitioners ‘taken by surprise’ by breach reporting requirements, says CPA
03 June 2024
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Tax Practitioners Board chair Peter de Cure said the breach reporting obligations that will soon apply to registered tax practitioners from 1 July have already raised a multitude of questions from practitioners.
De Cure said practitioners want to know what would constitute a ‘significant breach’ and the circumstances around when they would be required to report either themselves or other practitioners to the TPB and their professional associations.
In an address at CPA Australia’s Public Practice Retreat in Lorne, Victoria, de Cure said the TPB will take a “risk-based approach when deciding to commence a formal investigation, and that a preliminary analysis will be undertaken on all reports in the same way current complaints are investigated”.
He also warned against practitioners making frivolous, vexatious or malicious claims against other practitioners, noting that such behaviour may breach the code.
The TPB chair also explained that the board would be taking a transitional approach to enforcing compliance, focusing first on consultation, education, building awareness and improving compliance, supervisory and regulatory systems.
CPA Australia members at the event noted the challenges they’re facing, including the uncertainty around when and what to report, how the TPB will handle a report and whistleblower protections.
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CPA spokesperson Gavan Ord said practitioners have been “taken by surprise” by the last-minute insertions into the legislation and have genuine concerns about how they are supposed to adopt these changes, particularly when there are such serious consequences for non-compliance.
“CPA Australia members already comply with the Australian Professional and Ethical Standards (APES) which include standards on ethical obligations, non-compliance with laws and regulations (NoCLAR) and quality control for firms,” Ord said.
“These standards provide a solid foundation for tax practitioners to ensure strong governance and processes, with clear instructions on dealing with evidence of non-compliance.”
Tax Institute senior advocate Robyn Jacobson said the amendments relating to the breach reporting obligations were tabled without any consultation with key stakeholders in the accounting or tax profession.
She also noted that there is no explanatory memorandum accompanying the legislation that would provide further guidance on these significant changes.
“We have an overarching concern that registered tax practitioners will be left wondering how to apply the new law and when their actions or that of another registered agent constitute a transgression that meets the threshold beyond which they have a reporting obligation,” Jacobson told Accountants Daily.
“Practitioners should be rightfully asking what their role actually is under the legislative provisions, and what it should be in an ideal world, in regulating each other in view of the TPB’s core role as regulator of the profession.”
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