Issued: 11 December 2023
Last modified: 4 January 2024
The government has made changes to the Tax Agent Services Act 2009 (TASA) through Treasury Laws Amendment (2023 Measures No. 1) Act 2023 to implement a number of recommendations arising from a 2019 independent review into the effectiveness of the Tax Practitioners Board (TPB) and the TASA. Some of these changes are also responsive to other reforms announced by government.
These changes, which commence in 2024, are summarised below:
| Law change | Start date | Explanation | |
|---|---|---|---|
| 1 | Expanding the Code of Professional Conduct (Code) to prevent the engagement of disqualified entities | 1 January 2024 | The new Code items 15 and 16 prevent tax practitioners from employing or using a ‘disqualified entity' without TPB approval or entering into certain arrangements with a ‘disqualified entity’. The TPB will shortly be issuing draft guidance for public consultation on how the new Code items operate. |
| 2 | Giving the Minister the ability to expand the Code | 1 January 2024 | The Minister will have the ability to expand the Code to include additional obligations that tax practitioners must comply with, to address emerging or existing behaviours and practices. |
| 3 | Move to annual registration period | 1 July 2024 | The registration period for tax practitioners will change from at least every 3 years to at least every year. |
| 4 | Breach reporting – self reporting | 1 July 2024 | A tax practitioner must notify the TPB in writing if the tax practitioner has reasonable grounds to believe that they have breached the Code and that the breach is a significant breach. The TPB will be issuing draft guidance for public consultation on the operation of these new laws. |
| 5 | Breach reporting – another tax practitioner | 1 July 2024 | A tax practitioner must notify the TPB and TPB recognised professional association in writing if the tax practitioner has reasonable grounds to believe that another tax practitioner has breached the Code and that the breach is a significant breach. The TPB will be issuing draft guidance for public consultation on the operation of these new laws. |
| 6 | Updating of the objects clause in the legislation | 1 January 2024 | The objects clause in the TASA has been updated to modernise the object of the TASA to recognise its role in supporting public trust and confidence in the integrity of the tax profession and the tax system. |
| 7 | Enhance the TPB’s financial independence | 1 July 2024 | The TPB’s financial independence from the Australian Taxation Office will be enhanced by establishing a ‘special account’ for the TPB, allowing separate funding for the TPB for specified purposes. |
| 8 | Board member appointments | 1 October 2024 | Ensure that individuals appointed to the TPB as Board members meet the definition of ‘community representatives’. |
The TPB welcomes these changes and the government’s ongoing commitment to ensuring that the regulation of the tax profession continues to be fit for purpose, and the TASA sets appropriate standards of professional and ethical conduct for the provision of tax practitioner services to protect consumers.
The TPB will be providing further guidance, including website information and webinars, to tax practitioners on how the new laws will operate. In particular, the TPB will soon be releasing draft guidance to explain the two new disqualified entity Code items (Item 1 in the above table) for public consultation. This will be followed by draft guidance on the new breach reporting requirements (Items 4 and 5 in the above table).
In addition to these changes, the government has opened consultations on the next tranche of reforms to strengthen integrity and accountability in our tax system. The first consultation is a proposal to strengthen the TPB’s sanctions regime, which would improve deterrence and increase discipline for those who do the wrong thing. The government is also consulting on new obligations for tax practitioners, through a legislative instrument to expand the Code of Professional Conduct.
The government is seeking stakeholder feedback on both proposals and you can submit responses to this consultation up until 21 January 2024.