This morning, the TPB released Practice Note TPB(PN) D38/2017, with a view to assist registered tax practitioners in understanding their obligations under the Code of Professional Conduct in relation to the use of outsourcing and offshoring.
You can read the full document here.
The draft comes as offshoring and outsourcing services within the tax profession becomes increasingly pervasive and of increasing significance in the normal course of client service provision.
The TPB is aiming to flag with tax practitioners that there are various considerations that they need to undertake when engaging in offshoring or outsourcing arrangements, in order to meet their obligations under the Professional Code of Conduct.
For example, tax practitioners should take into account if there is a clear definition of duties, obligations and responsibilities of the parties involved in the arrangement, including sufficient detail and review provisions to provide assurances for security and confidentiality.
Further, there should be consideration of how client information is being stored and accessed, how information is being transferred between various systems and whether data integrity is being maintained.
Tax practitioners should also be aware of any protections that are in place to prevent service access from being disrupted, and if there is flexibility to allow for changes or developments in technology and operations.
The draft notes that if a registered tax practitioner has inadequate procedures and policies in relation to their outsourcing or offshoring arrangements, the TPB may find that the registered tax practitioner has breached the code.
Administrative sanctions can be imposed, including but not limited to, a suspension of the practitioner’s TPB registration and termination of the practitioner’s TPB registration.
The tax practitioner may also find themselves in breach of other relevant legislation, including the Privacy Act and the Corporations Act.