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The long-awaited guidance addresses industry concerns over the changes before the regime starts in January.
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TPB finalises TASA determination guidance
24 December 2024
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The TPB has finalised guidance on how it will administer new rules affecting tax practitioners under the TASA code determination, just over a week before the regime takes effect for larger firms.
The long-awaited guidance, issued on Monday by the regulator, includes more detail to quell concerns around the determination’s most controversial provisions, notably section 15’s “dob-in” obligation and section 45’s client disclosure obligation.
The TPB said the guidance took a “pragmatic approach” and was shaped by “extensive” stakeholder consultation and feedback, coming in two months after draft versions were released in October.
“Tax practitioners, professional associations and community representative organisations worked with the TPB to clarify issues and provide practical case studies,” chairman Peter de Cure said.
“We thank these stakeholders for their participation in multiple roundtable discussions and 24 written submissions that were received during public consultation.”
The TASA code of conduct determination was made in July by Assistant Treasurer Stephen Jones, mandating additional ethical requirements in wake of the PwC tax leaks scandal.
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The determination, made without industry consultation or notice, triggered a wave of backlash around the wording of its broad provisions and burden on smaller practices.
Its most controversial provisions were amended in September, and the TPB said it would address remaining practitioner concerns through “pragmatic and practical” guidance.
The finalised guidance for section 15 included more examples about what was a false or misleading statement that would require agents to take action, including withdrawing from a client or “dobbing in” the client to authorities.
It clarified that “innocent or genuine errors” did not require further action.
Examples cited included information reported at incorrect labels in a statement or return that resulted in minimal or no change to the overall tax position of the client, typos and genuine mistakes that occurred due to minor misunderstandings of a client’s situation or the application of tax law.
It also omitted a statement in the draft guidance that “a statement is misleading if it creates a false impression, even if it is literally true”.
The finalised version addressed concerns from the Tax Institute about how the obligation to withdraw from clients applied to multi-disciplinary partnerships, clarifying that it applied to the entity engaged to provide the services.
It also included an example involving group representations. For engagements involving multiple taxpayers or entities, it said the “client” was the specific entity related to the false or misleading statement.
Meanwhile the finalised guidance for section 45 clarified when practitioners’ obligation to keep clients informed applied to partnerships and companies.
“Where a partnership or company registered tax practitioner (the entity) provides tax agent services to its clients, the obligation under section 45 of the determination is to be met by the entity,” it said.
It also added exceptions clarifying that if a practitioner also provided tax agent services in their personal capacity, they would be “separately required to comply with the obligation under section 45 with respect to that personal capacity”.
The code obligations are set to take effect on 1 January for firms with 100 or more employees, and on 1 July for practitioners with less than 100 employees.
De Cure said the TPB’s support for practitioners and the implementation of the changes would be ongoing.
“Most tax practitioners do the right thing and will readily comply with these reforms,” he said.
“The new obligations build on the principles in the existing code, and strengthen professional standards such as honesty and integrity, competence and reasonable care, confidentiality and client engagement.”
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