Australian Assistant Treasurer Stephen Jones has retreated from the original deadline for the implementation of new ethical rules following significant lobbying from ten professional associations.
Initially, the new ethical obligations were set to take effect on August 1, but this decision prompted an outcry from professional associations, arguing that it was unreasonable to expect tax advisers to comprehend and comply with the new obligations within such a short timeframe.
Previously reported on the criticism from ten Australian tax associations regarding the new regulation, which, among other requirements, mandates advisers to inform clients of any relevant matters that might impact their relationship. Over the past 24 hours, Jones engaged in detailed discussions with the associations, leading to an agreement that firms with 101 or more employees would have to ensure compliance with the new guidance from January 1, 2025. Meanwhile, practices with fewer than 100 employees will have almost a year, until July 1, 2025, to achieve full compliance with the rules.
These staggered deadlines will allow Australia’s Tax Practitioners Board (TPB) to thoroughly establish guidance for tax advisers on the eight new ethical obligations, alleviating practitioners' concerns about potential legal breaches. In a letter sent today to the professional bodies, Jones expressed his commitment to collaborating with the profession to enhance integrity and accountability in the tax system.
Jones referenced the 2019 James Review, which called for reforms to the Tax Agent Services Act 2009 to address various cultural issues within the profession. “The PwC tax leaks scandal exposed the consequences of the weaknesses this review identified,” Jones stated in his letter. “It also reinforced the need to close the regulatory gaps in the profession, which could be exploited by firms of all sizes. Misconduct has serious impacts for consumers and causes them to lose trust in the tax profession and tax system. It also impacts compliant practitioners who are forced to compete with dishonest practitioners.”
The Tax Institute (TTI), one of Australia’s tax professional associations, communicated its support for the revised deadlines to its members, expressing relief at the assistant treasurer's decision. Todd Want, TTI president, said, “We are pleased by the assistant treasurer's understanding of the critical nature of TPB guidance in ensuring these rules function well for the tax system and all those who work with it. The new dates provided allow for important consultation and guidance.”
Want also appreciated Jones’ willingness to make necessary changes after further consultation. “We also appreciate that the assistant treasurer has indicated a willingness to make critical changes to the determination, should that be considered appropriate after further consultation regarding the implementation of the new obligations,” he added.
Jones’ decision to extend the deadlines comes after recent concerns raised by the associations during a meeting with the TPB and Treasury last week.
By fLEXI tEAM
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