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Enhancing the Tax Practitioners Board’s sanctions regime and extending the Code of Professional Conduct

The Law Council of Australia is aware of the views expressed in the joint Submission by professional bodies in their response to the Consultation paper ‘Enhancing the Tax Practitioners Board’s sanctions regime’ (the Consultation paper), released on 10 December 2023, and is grateful to those professional bodies for sharing these views.

The Exposure Draft Tax Agent Services (Code of Professional Conduct) Determination 2023 proposes to elaborate or supplement the existing Code of Professional Conduct in Division 30 of the Tax Agent Services Act 2009.

This submission has been prepared from the particular perspective of the Australian legal profession and the approaches to professional disciplinary matters in legal profession regulation. In doing so, it is necessary to also comment on the proposed additions to the Code of Professional Conduct in Division 30 of the Tax Agent Services Act contained in the Exposure Draft of the Tax Agent Services (Code of Professional Conduct) Determination 2023.

Tax agent services and BAS agent services (tax practitioner services) provided by legal practitioners as a legal service are generally not subject to regulation under the Tax Agent Services Act.

Part 5 of the Tax Agent Services Act contains prohibitions on providing or advertising tax practitioner services by an individual or body corporate who is not a registered tax agent. Sections 50-5 and 50-10 of the Tax Agent Services Act exclude from these prohibitions, tax practitioner services that are provided as a legal service under the authority of a state or territory law regulating legal practice and the provision of legal services. However, the exclusion does not apply to preparation of returns or return-like statements such as income tax returns, BAS returns, PAYG withholding statements and the like, except where they are prepared as a legal service in the course of acting for a trust or deceased estate as a trustee or personal legal representative.

The policy reason for excluding tax practitioner services provided as a legal service from the prohibitions in the Tax Agent Services Act is to avoid dual regulation of a service (and hence the service provider) as both a legal service (under authority of State and Territory laws) and as a tax agent service (under Commonwealth laws).

The Law Council acknowledges that avoiding dual regulation is a policy decision of the Commonwealth. It is not a matter of the Commonwealth lacking legislative power over taxation matters. It is important therefore that Commonwealth proposals to strengthen the tax agents sanctions regime and supplement the Code of Professional Conduct have equivalence in State and Territory laws that regulate legal practitioners and the provision of legal services.

Further, to the extent that a small proportion of legal practitioners are also registered tax practitioners, because they provide tax agent and BAS agent services not excluded from the Tax Agent Services Act, dual regulation remains an area of focus for the Law Council.

The Law Council has a wider public interest, beyond the legal profession per se, in advocating for laws that are fair, reasonable and an appropriate and proportionate response to the matters being dealt with. Matters relating to professional conduct and regulatory responses to breaches of professional obligations are a significant issue for all professions, including those regulated by the Tax Agent Services Act.

Read the full submission below.

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