Issued: 13 November 2023

Last modified: 21 November 2023

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View the resources for our webinar, Ethics. Practising ethical decision making can help maintain a compliant, honest, transparent and client focussed experience. During this webinar you will see how ethical practice can assist you to meet your Code of Professional Conduct obligations and help support quality advice outcomes and processes.


Webinar recording

Ethics webinar recording

Questions and answers

We have compiled some of the questions we received during our webinar.

Reporting unethical behaviour

Yes, you can make an anonymous compliant. But be sure to provide as much information as possible. Find out more about making a complaint.


There are several issues here. First, how do tax practitioners support and educate clients about their tax law entitlements and obligations.

Second, if a client continues to press a claim which is unlawful, explain the consequences, including audits, investigations, penalties and in the worst cases, prosecutions.

Third, if the client is still pushing tax fraud, you need to consider your own obligations. Acting legally and ethically and in the client’s best interests means you can’t follow these instructions. The downside for tax practitioners is obvious – your own standards, your reputation and good will in the marketplace, your registration and even penalties on prosecutions.

A further question arises under the whistleblower provisions. If you know the client is acting illegally (from a tax perspective), you may wish to 'blow the whistle' to an eligible recipient, such as the Australian Taxation Office (ATO), under the whistleblower laws. These disclosures can be made lawfully, consistent with confidentiality requirements.


If you suspect or are aware of tax evasion or money laundering occurring, you should report the behaviour or activities to the ATO. The ATO has a tip-off form that you can complete. More information is available on their website


This is a tricky situation, where you may suspect other tax practitioners are doing the wrong thing. It is important that you, as a registered tax practitioner, do what you can to educate the client and if they still do not wish to comply with the tax laws, you should decline to act for them. If other practitioners then take on those clients and act unlawfully, they risk losing their tax practitioner registration.


Yes, you can remain anonymous if you wish. It is best to contact the ATO to discuss the process, including any obligations to report.


Yes, under Code item 6 tax practitioners must not disclose information relating to a client’s (or former client’s) affairs to a third party unless you have:

  • obtained your client’s permission; or
  • a legal duty to do so.

Find out more about your obligations under Code item 6 – confidentiality.


Yes, a ‘third party’ is any entity other than you and your client and could, for example, include:

  • entities to which you outsource your tax or BAS agent services 
  • entities within the same service trust structure, unless the client is defined (for example, in the engagement letter) as the whole structure
  • a related entity of your practice or the client
  • maintaining offsite data storage systems (including ‘cloud storage’).


Yes, before sharing any client information to a third party you must seek and gain your client’s permission. This may be by way of an engagement letter or other written consent.

We recognise tax practitioners are increasingly engaging in outsourcing.

Find out more about how to comply with your Code of Professional Conduct (Code) obligations under these types of arrangements by reviewing our Practice note on outsourcing.

Personal tax obligations

Yes, in addition to your obligations under the taxation laws generally, the Code requires you to comply with the taxation laws in the conduct of your personal affairs (Code item 2). You must make sure your personal tax affairs, including those of related entities, are in order, such as:

  • lodging your personal income tax returns on time
  • lodging your instalment or business activity statements on time
  • paying your tax bill or coming to an arrangement with the ATO to pay amounts owing.

Client money

Yes, it is required that the funds be refunded to an account held in trust first before applying them to an invoice.


You will find that the requirements should be consistent with the requirements under the legislation for trust accounting. Find out more about holding client money or other property on trust.


For TPB purposes, a trust account may be a separate bank account as long as this account is exclusively used only for handling client monies as instructed by respective clients. However, tax practitioners who are members of relevant professional bodies that have adopted the standards of Accounting Professional and Ethical Standards Board (APESB), should also consider the APESB’s guidance APES 310


Yes, a trustee can be one of the beneficiaries of a trust. For example, an individual could set up a trust, appoint themselves as trustee and distribute income to their business. 

However, a trustee cannot be the sole beneficiary of a trust. This is because they would be legally owning property for the benefit of themselves, which is problematic from a legal perspective.


A trust should have its own tax file number (TFN). A trust is also entitled to an Australian business number (ABN) if the trust is carrying on an enterprise.

The trustee registers for the trust's TFN and ABN in their capacity as trustee.

All trusts will automatically have 'The Trustee for...' added to the name of the trust when the ABN is registered, as the trustee is responsible for the tax obligations of the trust.


If a client gives money to you for a specific purpose, you must keep this money separate from your own money as you are holding this money on trust for them. You must use this money for the specific purpose as directed by the client and account to them for this money.


Yes, tax agent and BAS services can be provided for a fee or other reward. The phrase ‘or other reward’ recognises situations where services are provided for a reward other than a financial reward. For example, when bartering tax agent or BAS services for goods or other services. See our Information sheet for more detail on what constitutes a fee or other reward

Conflicts of interest

In this situation a conflict of interest may arise, Importantly, this could be an actual or a potential conflict. As a tax practitioner you have a duty to manage both actual and potential conflicts of interest. When managing conflicts of interest, you should use your professional judgment to determine the most appropriate method to identify and manage a particular conflict. A number of mechanisms could be used to manage conflicts of interest including:

  • disclosing the conflict
  • controlling the conflict
  • avoiding the conflict.

Find out more on managing conflicts of interest.


Yes, a tax practitioner may provide services to a client on a pro bono basis. 

Client permission

Yes, via email is perfectly fine. Just ensure that you have provided the client with all the information they need to make an informed decision about providing their authorisation.


Engagement letters are not required under the Tax Agent Services Act 2009, but we highly recommend using them for any services provided by tax practitioners to clients. Some of the benefits of using engagement letters is that it clarifies what work is to be done, how it will be done and how much the work will cost. In this situation, your employer may have an engagement letter in place with the client.


This arrangement would be ok if you have your client’s consent in writing. We recommend however that arrangements are reconfirmed or reviewed with clients regularly (preferably annually).


The BAS agent would be considered a third party, so you should obtain the client's permission first before discussing further with the other BAS agent.


That would suffice providing, this is included in your engagement letter and the client has adequate information about the offshore third party arrangements you may utilise in order for them to make an informed decision.


Only if there is a legal requirement to do so. The ATO can issue a notice under section 353-10 in Schedule 1 to the Taxation Administration Act 1953 concerning taxation laws (subject to that material being properly withheld under legal professional privilege). See our other examples of when you may have a legal duty to disclose client information.


When obtaining client permission, it is recommended you inform them about the proposed disclosure, including noting to whom and where the proposed disclosure will be. It is also recognised that a general consent relating to disclosure to third parties may also be acceptable having regard to particular circumstances. It’s important to note that a tax practitioner is not excused from taking necessary steps to protect information just because it would be inconvenient, time-consuming or costly to do so.

Even when using a general disclosure, such as this, you should require a positive step from your client to authorise the disclosure. This may include an appropriate ‘opt-in’ type approach.


If there are changes to the disclosures in an engagement letter, it is best to prepare a new engagement letter. Something published on your website may be missed by the client and you need to ensure the client is not only aware of the changes, but there has been a positive step taken by the client to authorise the relevant changes made to the disclosures.


Generally, if there is no change in circumstances you would not need to issue a new engagement letter. However, in relation to recurring or ongoing engagements, we recommend annual review because this ensures that the terms of your engagement are reconfirmed or reviewed with the client. 


The employment of staff located overseas to provide tax agent or BAS services on your behalf is an example of offshoring. The staff may also be considered a third party in certain circumstances, such as if they are employed through a service trust arrangement, or if they maintain offsite data storage (including ‘cloud storage’). If this is the case, you must ensure you obtain your client’s permission to disclose information relating to their affairs to a third party. 

When employing staff overseas you must also ensure any tax agent or BAS services provided to clients in Australia are provided competently, just as must occur within Australia. It’s also important to recognise that while supervisory arrangements are an important factor in ensuring services are provided to a competent standard, it won’t ensure competency. Read our Information sheet on supervisory arrangements for more information.  


Yes, you can be a director and supervising agent for a tax agent company. If you are acting as supervising agent for the other tax agent company, you will need to ensure you have appropriate checks and quality controls in place to ensure you are fulfilling your duties as supervising agent and can ensure the services you are supervising are provided to a competent standard.