APES 110 for Tax Practices: What Applies to You

APES 110 governs how professional body members accept clients, handle ethical threats and give tax advice. For a tax practice, Parts 1 and 3 are the starting point. Registered tax agents must also meet the TPB Code, whether they hold professional membership or not.

What APES 110 is and Who It Binds

APES 110 is the Code of Ethics for Professional Accountants (including Independence Standards), issued by the Accounting Professional & Ethical Standards Board (APESB). Members of CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ) and the Institute of Public Accountants (IPA) must comply.

A registered tax agent who belongs to none of those bodies still answers to the Tax Practitioners Board (TPB) Code of Professional Conduct. Professional membership adds obligations to registration. It does not replace them.

The compiled APES 110 has the following parts.

Part	What it covers	Application in a tax practice
Part 1	Fundamental principles and the conceptual framework	Applies to every member’s professional activities
Part 2	Members in business, including employment relationships of members in public practice	Applies to your work as an employee, contractor or owner within the practice
Part 3	Members in public practice	Applies when you provide professional services to clients
Part 4A	Independence for audit and review engagements	Applies if you perform audits or reviews, including self-managed super fund audits
Part 4B	Independence for other assurance engagements within its scope	Applies if you provide those assurance services
Part 5	Sustainability ethics and independence	Has its own sustainability assurance scope

You can usually set aside the detailed audit independence rules for a practice providing only tax services. If your practice also audits a client, tax services can affect independence. Check the applicable assurance provisions before accepting both jobs.

An R-prefixed paragraph is a requirement. Application material marked A explains how to apply requirements. Read both together, without turning every suggested safeguard into a universal duty.

The Five Fundamental Principles in Tax Work

The five APES 110 fundamental principles govern everyday tax decisions under Section 110. These hypothetical examples show how each principle affects work on a client file.

Principle	Tax practice example
Integrity	Refuse to associate yourself with a return you know omits material income
Objectivity	Assess a proposed deduction on its facts even when a client who supplies much of your revenue insists it is allowed
Professional competence and due care	Obtain specialist help before advising on a foreign tax issue outside your expertise
Confidentiality	Keep a company’s tax affairs from a shareholder who lacks authority to receive them
Professional behaviour	Meet applicable laws and avoid misleading claims about the results your practice can obtain

Section 120 requires you to identify threats, evaluate their level and address those that are unacceptable. The test asks what a reasonable and informed third party would conclude. Your confidence that you can remain fair is insufficient by itself.

The Code names five threat categories. Each can arise without an audit engagement.

Threat	Hypothetical tax example
Self-interest	An objection fee depends on the tax saving, giving you a financial stake in the outcome
Self-review	You assess a tax position that you previously advised the client to adopt
Advocacy	Your representation of a client’s position becomes so partisan that your objectivity suffers
Familiarity	A longstanding personal relationship causes you to accept unsupported expense claims
Intimidation	A client threatens to move all group work unless you approve an unsupported deduction

Under R120.10, remove the circumstance creating the threat, apply effective safeguards or decline or end the activity. An independent review can be a safeguard. A review that leaves the reviewer exposed to the same pressure cannot solve the threat.

Accepting a New Tax Client Under APES 110

Section 320 requires an ethical assessment when you accept a client or change an engagement. Consider the client’s integrity alongside your ability to perform the work. Look at the owners and management, the activities involved and the resources the job needs.

A client with an unresolved reporting problem is not automatically unacceptable. Their willingness to correct it affects your assessment. A client who demands that you continue concealing income presents a different decision.

When replacing another accountant, R320.4 requires you to determine whether there are reasons to refuse the appointment. The Australian provisions also cover replacing an accountant who is not a professional body member.

Contact with the existing accountant can reveal missing facts or earlier disagreements. Usually obtain the client’s permission first, preferably in writing, under 320.5 A1. If communication is unavailable, R320.6 requires other reasonable steps to obtain information about possible threats.

A clearance response does not give the previous accountant a veto. You make the acceptance decision from the evidence. Use the professional clearance request guide for the request itself.

Keep an acceptance record that shows what you considered and who approved the decision. Useful records contain:

• Identity, ownership and authority details for the client and its representatives.
• A map of the entities, trustees and directors, including relationships that can create conflicts.
• The previous accountant’s details, permission to communicate and the information obtained.
• The work’s scope, competence assessment and any safeguards.
• The engagement letter and the client’s acceptance, with written acceptance preferable.

These are practical ways to evidence acceptance. APES 110 does not prescribe one onboarding form or demand a signed letter for every engagement. APES 305 engagement requirements govern documenting and communicating the terms. A practice can adopt signing before work as its own acceptance policy.

Decline or end work when threats cannot be reduced to an acceptable level. For example, refuse a service that depends on information the client knows is materially misleading and will not correct.

Conflicts of Interest, Fees and Confidentiality

Section 310 requires you to identify and address conflicts before and during an engagement. Acting for both spouses during a separation can put their tax interests against each other. Two shareholders disputing a buyout, or a trust and a beneficiary contesting a distribution, create similar risks.

Consider the particular matter and the confidential information each client has supplied. Separate teams and restricted access can help where they work in practice. Consent cannot make an unacceptable threat acceptable.

Under R310.9, use professional judgement to decide what disclosure and consent the circumstances require. If necessary explicit consent is refused, R310.10 requires you to end or decline conflicting services, or eliminate the relevant relationship or interest. Disclosure itself must respect confidentiality.

Fees and Referral Benefits

Section 330 covers professional fees, contingent fees and referral benefits. A low fee can threaten competence and due care if it leaves insufficient resources for the job. Agree a scope and fee that allow the required work to be done.

A contingent fee for non-assurance tax work creates a self-interest threat. It is not automatically prohibited by Section 330. Assess its basis, the range of outcomes and any effective safeguards. For a tax objection, a fee tied to the amount recovered can pressure the adviser to overstate the position.

In an Australian engagement, AUST R330.5.1 requires written disclosure when you receive a referral fee or commission. Tell the client that the arrangement exists, identify the other parties and explain how your benefit is calculated. Paying a referral fee also creates a threat requiring assessment, with disclosure identified as a possible safeguard.

Client Gifts and Hospitality

Section 340 covers inducements, including client gifts and hospitality. Under R340.8, decline a gift you conclude is intended to influence behaviour improperly. Decline it too when a reasonable and informed third party would likely reach that conclusion.

For example, expensive hospitality offered while you assess a disputed deduction can put pressure on your judgement. Consider its value and frequency, the timing and how openly it is offered. A gift’s label as a thank-you does not decide the result.

Where there is no improper intent, trivial and inconsequential inducements create threats at an acceptable level under 340.11 A2. Other gifts still require assessment. Recording offers, refusals and reasons in a gifts register is a useful practice policy. Section 340 does not impose a universal register requirement for every gift.

Keeping Client Information Confidential

Subsection 114 protects information throughout the relationship and after it ends. AUST R114.3 permits disclosure where a legal or professional duty or right exists. It also permits authorised disclosure where law or regulation does not prohibit it.

A regulator’s lawful information request and a client’s authorised transfer are different grounds for disclosure. Check the ground and limit the information to what the disclosure requires. The Australian application material advises obtaining legal advice before disclosure without client consent.

Tax Planning and Second Opinions

Section 380 governs tax planning services in public practice, including related services within its scope. APESB adopted these provisions from the International Ethics Standards Board for Accountants’ tax-planning amendments. The tax-planning amendments operate under the boundaries in APESB’s current pronouncements.

R380.12 permits recommending or advising on an arrangement only when you determine that it has a credible basis in law and regulation. For Australian tax law, AUST 380.12 A1.1 identifies that basis as a reasonably arguable position under section 284-15 of the Taxation Administration Act 1953.

A tax saving alone does not settle the ethical assessment. R380.14 requires consideration of reputational, commercial and wider economic consequences. Discuss uncertainty with the client under R380.18 and explain your advice’s basis under R380.20. AUST R380.26 requires timely documentation under APES 220.

In a hypothetical ordinary-advice case, you assess whether expenditure meets a deduction’s requirements and explain the evidence needed. In an aggressive arrangement, artificial steps aim to create a deduction while concealing who receives the benefit. Examine substance and the legal basis before giving advice. Decline to recommend an arrangement that lacks that basis.

Section 321 applies when a client asks for a second opinion on another adviser’s position. Obtain the relevant facts and, with permission, seek information from that adviser. Explain any limitations that affect your conclusion.

If the client refuses permission to communicate, R321.4 requires you to determine whether you can provide the opinion. The refusal does not automatically prohibit it. An opinion based on incomplete facts can be misleading even when the legal analysis is correct.

Responding to Non-Compliance With Laws and Regulations

NOCLAR means non-compliance with laws and regulations. Section 360 covers actual or suspected breaches within its scope, including tax laws. For non-audit tax services, apply the requirements beginning at R360.29.

Consider a hypothetical case where bank receipts suggest a client has omitted business income from earlier returns. The client says the receipts were private transfers, but supplies no evidence.

1. Obtain an understanding under R360.29. Reconcile the receipts and ask for evidence before concluding that they are undeclared income.
2. Discuss the matter with appropriate management under R360.30. Involve those charged with governance where you have access and doing so is appropriate.
3. Advise on correcting any understatement. APES 220 addresses misleading information and the response where a client refuses correction. Do not prepare a new return on a materially misleading basis.
4. Apply the auditor communication rules in R360.31 to R360.33 where relevant. The required action differs between your practice’s audit client, a network audit client and a client audited elsewhere.
5. Consider further public-interest action under R360.36. Assess management’s response, urgency and potential harm. This can include lawful withdrawal or disclosure to an appropriate authority.
6. Keep the facts, discussions and decision on file. The non-audit documentation guidance is at 360.40 A1, alongside APES 220’s working-paper requirements.

Disclosure under R360.37 requires good faith and caution. Consider whether informing the client before disclosure is appropriate. For an imminent breach causing substantial harm, R360.38 requires a separate immediate-disclosure assessment. Confidential legal advice can help you assess the disclosure ground and any restrictions.

Registered Tax Agent Breach Reporting

A client’s undeclared income is not automatically a reportable breach by a tax practitioner. Separately assess whether your conduct or another registered practitioner’s conduct breaches the TPB Code and meets the significant-breach threshold.

Sections 30-35 and 30-40 of the Tax Agent Services Act address self-reporting and reporting another registered practitioner. Notify the TPB within 30 days after you first have, or ought to have, reasonable grounds to believe there is a significant Code breach. When reporting another agent, notify their recognised professional association where the statutory membership and awareness conditions apply.

The TPB breach reporting guidance explains the commencement boundary, including ongoing breaches. Significance can arise from dishonesty offences, likely material loss or damage, repeated breaches or inadequate compliance arrangements. You need a factual basis for the belief, without waiting for conclusive proof.

NOCLAR judgement does not displace a mandatory reporting duty. Nor does ending the client engagement remove an existing reporting obligation.

APES 110 Beside the TPB Code and APES 220

APES 110, the TPB Code and APES 220 can apply to the same tax engagement. They come from different authorities and impose overlapping duties.

APES 110 principle	Overlapping TPB Code duties
Integrity	Item 1 requires honesty and integrity. Item 2 requires compliance with tax laws in personal affairs
Objectivity	Item 4 requires lawful best-interest conduct. Item 5 requires adequate arrangements for conflicts
Professional competence and due care	Items 7 and 8 cover competence and knowledge. Items 9 and 10 require reasonable care over client facts and tax-law application
Confidentiality	Item 6 restricts disclosure without permission unless there is a legal duty
Professional behaviour	Item 11 prohibits knowingly obstructing proper administration of tax laws. Other statutory and determined duties also apply

The table shows overlaps, not identical wording. In particular, APES 110’s professional disclosure permissions do not themselves establish a legal duty under TPB item 6. Assess both before disclosing client information. The TPB Code guide covers registration duties in detail.

APES 220 Taxation Services applies the ethical principles to tax work. Its 2025 revision aligns tax planning with APES 110. The standard adds duties over returns, estimates, misleading information and engagement matters. It also addresses client monies, professional fees and documentation.

For example, APES 220 restricts estimates to accepted uses or circumstances where exact data is impracticable. Estimates must not imply greater accuracy than they have. Paragraph 7.1 prohibits a service based on materially misleading information where the client refuses correction. Paragraph 11.1 requires working papers supporting the work and calculations.

Your professional body handles APES breaches through its disciplinary procedures. The TPB handles breaches of the statutory Code. The same conduct can engage both. APESB issues standards and does not replace either enforcement body.

For each new client, record which obligations apply and who approves acceptance. Use APES 320 quality management to put that decision into the practice’s wider acceptance and continuance arrangements.