Federal Government to delay tax code changes for small firms

Larger firms with more than 100 employees must comply with the new obligations by 1 January 2025. The code changes aimed at closing regulatory gaps include prohibitions around false and misleading statements. They also cover obligations for practitioners to disclose significant matters relating to clients such as tax offences or previous convictions.

In a letter sent to the Institute of Public Accountants and other accounting bodies, Jones encouraged all practitioners to take steps towards compliance during the transition period. And he vowed to continue working with stakeholders during the process of finalising the guidance on the determination.

“...given the importance of the TPB's (Tax Practitioners Board) guidance material, I will insert a transitional rule into the Determination that will provide firms with 100 employees or less until 1 July 2025 and larger firms with 101 employees or more until 1 January 2025 to bring themselves in compliance with these new obligations, so long as they continue to take genuine steps toward compliance during this period,” Jones said.

He said this “provides certainty that the TPB can and will work collaboratively with you to understand and implement the obligations”.

“Should it become clear to the government during the process to finalise guidance that it is critical that changes be made to the determination I will engage constructively with you and other stakeholders,” Jones said.

The announcement to push out the deadline before the changes come into effect follows consultation with the professional bodies, including IPA, over concerns about whether there was sufficient time for businesses to meet the new compliance requirements.

On 15 July 2024, the joint bodies submitted an open letter to Jones seeking the removal of the determination and for further consultation over concerns.

Jones exercised his power to make changes to the Code of Professional Conduct under the Tax Agent Services Act last month, with the Tax Agent Services (Code of Professional Conduct) Determination 2024 originally set to take effect on 1 August 2024.

IPA supports new deadline and welcomes further consultation

Tony Greco, IPA’s General Manager Technical, said: “We are pleased by the Assistant Treasurer’s amendment to the start date of the new obligations.

“We also appreciate his understanding of the critical nature of TPB guidance in ensuring these rules function well and are pragmatic for the tax practitioner community.”

He said the transitional new dates allow the Tax Practitioner Governance and Standard forum, Treasury and the TPB to undertake further consultation and develop appropriate guidance. 

Greco commended Jones for indicating a “willingness to make critical changes to the Determination, should that be considered appropriate after further consultation regarding the implementation of the new obligations”.

The new code obligation to notify the authorities of misleading statements would require further consultation, he said.

“Whilst we advocate for members on an ongoing basis, we are pleased to have made inroads towards a better outcome for our members,” Greco said.

“We now look forward to the opportunity to undertake further consultation to address the concerns raised in our open letter.”

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