Date posted: 04/03/2024

Joint Submission on Draft guidance on new Code items 15 and 16 – Disqualified entities

Chartered Accountants ANZ and CPA Australia have lodged a joint submission to the Tax Practitioners Board (TPB)

CA ANZ, together with CPA Australia, have lodged a joint submission to the Tax Practitioners Board (TPB) on the Draft guidance on items 15 and 16 of the Code of Professional Conduct (the Code):

  1. TPB(I) D51/2023: Code of Professional Conduct – Employing or using a disqualified entity in the provision of tax agent services without approval
  2. TPB(I) 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 approval by the TPB, or
  • entering into certain arrangements with a ‘disqualified entity’.

Overall, we commend the TPB on the structure, clarity and practicality of the Draft guidance as a tool to help tax practitioners to understand and implement the required steps and procedures in their tax practices to comply with the law.

In particular, we welcome the TPB developing practical online forms and processes to facilitate and streamline compliance with the new Code obligations for tax practitioners, such as:

  • a Disqualifying events declaration and consent form for tax practitioners to request all new staff to complete during the recruitment and on-boarding process as part of their employment/engagement, and
  • a simple approval form for tax practitioners to seek TPB approval by logging into My Profile from 1 January 2024.

One of our key concerns is the guidance on the information to be published on the Register, and the need to give tax practitioners greater transparency on the information that is anticipated to be published on the Register (once the proposed changes are implemented) to help them to comply with the Disqualified entities regime.

Regarding the Transitional rules, we have identified a number of errors and issues with the accuracy and consistency of the Draft guidance.  We also have some concerns about how the transitional rules will apply in practice given the interplay in timing between the disqualified entities notification obligation and the tax practitioner’s obligation to make reasonable enquiries and apply for approval. We consider that it is more likely that existing disqualified entities will notify tax practitioners outside of the 12-month transitional period, rather than early in 2024 as assumed in the scenarios in the Draft guidance.