On 27 November 2023, the government made changes to the Tax Agent Services Act 2009 (TASA) through Treasury Laws Amendment (2023 Measures No. 1) Act 2023. Today, we are releasing the following draft guidance explaining the operation of 2 new items in the Code of Professional Conduct that apply to all registered tax practitioners from 1 January 2024:

• TPB(I) D51/2023: Code of Professional Conduct – Employing or using a disqualified entity in the provision of tax agent services without approval
• TPB(1) D52/2023: Code of Professional Conduct – Prohibition on providing tax agent services in connection with an arrangement with a disqualified entity

New Code items 15 and 16 prohibit tax practitioners from employing or using a ‘disqualified entity' without our approval or entering into certain arrangements with a ‘disqualified entity’.

These two Code items have arisen from concerns about insufficient internal governance practices leading to tax practitioners employing or using people who are unsuitable to provide tax services on their behalf. This increases the risk of sub-standard tax advice and tax fraud by, or on behalf of, taxpayers which diminishes the integrity of the tax system. These new Code items ensure that individuals and entities employed or used by tax practitioners in the provision of tax services, have the appropriate ethical and professional attributes to be employed in the tax profession. 

While the new Code items commence on 1 January 2024 there are a number of transitional provisions that apply over the next 12 months, from 1 January 2024 to 31 December 2024. These allow a reasonable time for tax practitioners to comply with the new requirements. 

For those tax practitioners that need to seek our approval, we have created a simple approval form which can be accessed by logging into My Profile from 1 January 2024. In seeking approval, tax practitioners will need to provide further explanation, including: 

• the reasons why the entity is a disqualified entity
• the circumstances of the entity that led to the entity becoming disqualified
• the role the entity would perform (or is performing) in your practice
• the reasons why the entity’s ability to perform their role (or proposed role) to an appropriate standard of professional and ethical conduct would not be affected

We recognise that our guidance on these new applications will not be finalised until after 1 January 2024. While we will consider all matters on a case-by-case basis, we will be pragmatic in addressing any compliance concerns. 

Our usual consultation period has been extended and closes on 16 February 2024. We welcome comments and feedback from interested stakeholders via email to tpbsubmissions@tpb.gov.au