APES 220 Taxation Services sets out mandatory requirements and guidance for members who provide taxation services.
Scope and application
APES 220 took effect on 1 January 2020 and was last revised in July 2019.
The revised standard requires members in Australia to adhere to its mandatory requirements when they provide a taxation service. For members outside of Australia, the scope of the Standard must be followed as long as local laws and regulations are not contravened.
Fundamental responsibilities of members
APES 220 requires members to observe and comply with their public interest obligations when they provide taxation services. The Standard also reminds members of their professional obligations established in accordance with APES 110 Code of Ethics for Professional Accountants (including independence standards) (the Code) in respect of:
- Section 112: Objectivity
- Section 113: Professional Competence and Due Care
- Section 114: Confidentiality
Consistent with the fundamental principles of integrity and professional behaviour, APES 220 mandates that members providing taxation services must ensure that their personal tax obligations and those of the member's associated entities are properly discharged.
Members must advise their clients or employers of their rights, obligations and options available under the taxation law. Members must also advise their clients or employers on the application of the taxation law, including any possible penalties and other legal tax consequences. Please read paragraph 3.17 and 3.18 of APES 220 for further details.
Preparation and lodgment of returns to revenue authorities
APES 220 stipulates that a member must prepare and lodge returns and other relevant documentation with a revenue authority in accordance with the information provided by a client or employer, their instructions and applicable taxation law.
Tax schemes and arrangements
APES 220 requires a member, where appropriate and having regard to the member's scope of work, to provide a client or employer with sufficient information to enable them to be fully informed of the details of any proposed tax scheme or arrangement and its current and future ramifications. Members must not knowingly or recklessly be associated with documents or accounting entries that misrepresent transactions. Members must also not promote tax schemes and arrangements in circumstances where it is not reasonably arguable that the applicable tax benefit is available under Taxation Law.
The use of estimates is prohibited by APES 220 unless their use is reasonable, and it is generally accepted or where exact data cannot be obtained. Where estimates are not reasonable, the member must advise the client or employer of the risks and consequences of using estimates.
False or misleading information
In accordance with APES 220, members must not provide a taxation service to a client or employer if it is based on false or materially misleading information. Further, a member must not knowingly or recklessly make a statement or cause others to make a statement that is false or misleading by its content or omission in a material manner.
Members who encounter or become aware of instances of non-compliance or suspected non-compliance with laws and regulations when providing taxation services must comply with section 260 (for members in business) or section 360 (for members in public practice) Responding to Non-Compliance with Laws and Regulations of the Code.
Professional engagement matters
Terms of engagement must be documented and communicated by members in public practice according to APES 305 Terms of Engagement. Members in public practice must also comply with Section 320 Professional Appointments of the Code.
Refer to the standard for information concerning:
- professional competence and due care
- preparation and lodgment of returns to revenue authorities
- tax schemes and arrangements
- false and misleading information
- professional engagement matters
- client monies
- professional fees
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