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The 1 July 2024 start date does not provide sufficient time for the TPB’s guidance to be finalised and communicated to the tax profession, the professional body says.
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IPA calls for 6-month delay to dob-in obligations
04 June 2024
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The Institute of Public Accountants said it is critical the TPB sets the right goalposts around reporting for the upcoming breach reporting obligations, with the legislation vaguely expressed and open to varied interpretation.
IPA general manager of technical policy, Tony Greco, said the key criteria for determining whether a tax practitioner needs to report a breach under the new laws are based on undefined terms that turn on their ordinary meaning.
Greco noted that the TPB did not design the law but had now been landed with the arduous job of trying to make the law practical.
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“Not having an explanatory memorandum as part of the law changes makes their job extremely difficult. Good policy objectives do not always translate into good law particularly when the law does not go through a proper consultation process,” Greco said.
“It’s important that the TPB set the right goal post for reporting purposes otherwise there will be a lot of uneasiness in the tax practitioner community as everyone will be looking over each other’s shoulder.”
Greco said there is a huge disconnect between the reasonable care and obligations under TASA and the way the breach reporting obligations have been written into law, which has created a lot of uncertainty.
The TPB released draft guidance on the breach reporting obligations in late April, which aimed to assist registered tax agents and BAS agents in understanding their new obligations. Consultation for the draft guidance closed last week.
Greco said that the joint bodies have collectively responded to this draft, and are now awaiting a finalised version of the guidance document.
“Given that the start date is 1 July 2024 there is insufficient time for the finalised guidance to be communicated to the tax profession in time for them to adapt to and prepare for what is a significant change in the regulatory environment,” he said.
A six-month delay for reform implementation would not be unreasonable, he said.
“This is particularly important given that the appropriate whistleblower protections for unrelated practitioners are not already in place. We need this addressed before mandatory reporting commences.”
The joint bodies noted in their submission that the draft guidance did not address the application of the whistleblower protection rules in Part IVD of the Taxation Administration Act 1953 (Cth) (TAA) concerning the breach reporting rules.
The major accounting bodies, along with other associations and organisations, said TPB’s guidance needs to explain the relation between the whistleblower protection rules and the breach reporting rules.
It should also explain whether the two sets of rules function independently of one another, or in circumstances in which a reporting practitioner under the breach reporting rules can be considered an ‘eligible whistleblower’ under the definition in section 14ZZU of the TAA.
“Feedback from practitioners indicates that there is a widespread perception that when a practitioner reports another practitioner under the breach reporting rules, the reporting practitioner will be shielded under the whistleblower protection rules,” the submission said.
“In our view, this may be a misconception, based on the meaning of ‘eligible whistleblower’ in section 14ZZU of the TAA.”
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