Last updated: 29 Apr 2024 02:00 Posted in:
The first comprehensive suite of global standards for accountants who provide tax planning services has been introduced by the International Ethics Standards Board (IESBA).
The updated code of ethics includes a new requirement for accountants in business and practice giving tax advice to consider the reputational, commercial and wider economic consequences of that advice. Guidance is provided on a number of areas, including:
• the accountant’s responsibilities in giving tax advice.
• identifying and addressing areas of uncertainty.
• documenting the advice given.
The IESBA said that the standards establish a clear framework of expected behaviours and ethics provisions for use by all professional accountants, and respond to public interest concerns about tax avoidance and the role played by consultants in light of revelations in recent years such as the Paradise and Pandora Papers.
It said the standards are especially relevant in the context of rising public scrutiny of tax avoidance schemes which can harm companies’ credibility and corporate reputation, as well as risking litigation and harming the public interest. Responding to increased public interest concerns, the fundamental goal of these standards is to ensure an ethical, credible basis for advising on tax planning arrangements, thereby restoring public and institutional trust on a topic that is core to the social contract between corporations and the market which supports them.
Gabriela Figueiredo Dias, Chair of the IESBA, said: “Professional accountants have an important duty to their clients but must not lose sight of their fundamental duty to the public interest. As scandals in recent years have shown, though some behaviours may be legal under the letter of the law in certain jurisdictions, the ‘grey area’ of tax is not always the ethical way forward.
“These standards provide a robust framework to help professional accountants, as well as all other tax advisers whom we strongly encourage to adopt or use the standards, navigate the ethical decisions in this complex area that are central to trust in the entire system.”
The changes take effect for tax planning services beginning after 30 June 2025. The IESBA has confirmed that early adoption of the provisions is permitted.
"As scandals in recent years have shown, though some behaviours may be legal under the letter of the law in certain jurisdictions, the ‘grey area’ of tax is not always the ethical way forward."
Gabriela Figueiredo Dias, Chair, IESBA