APES 220 Taxation Services: Duties for Tax Agents

APES 220 Taxation Services sets professional duties for members doing tax work. The Accounting Professional and Ethical Standards Board (APESB) issues it. It binds Australian members of CPA Australia, CA ANZ and the Institute of Public Accountants (IPA) who provide taxation services.

What APES 220 Asks of a Member Doing Tax Work

APES 220 requires integrity and objectivity in tax advice, competence, confidentiality, care with client information, working papers and clear engagement terms. It builds on the APES 110 Code of Ethics.

The 2025 APES 220 standard separates mandatory requirements from supporting guidance. Its bold requirements are obligations. Practical advice elsewhere helps you apply them, without making every suggested step compulsory.

If you are also a registered tax agent, the TPB Code applies alongside APES 220. Meeting one does not discharge the other. Your client remains responsible for supplying accurate information, while you remain responsible for the professional work you perform.

Taxation Services the Standard Covers

APES 220 covers professional work on a client’s tax liabilities, entitlements and obligations. Its definition includes the following services.

• Preparing tax returns, statements and other documents for revenue authorities.
• Responding to ATO requests for client information.
• Calculating tax amounts for financial statements.
• Giving tax advice and planning recommendations.
• Helping resolve tax disputes and representing clients in dealings with the ATO.

BAS work falls within this definition when a member prepares statements or advises on obligations under taxation law. The definition covers indirect taxes, including GST. It is not confined to income tax returns.

Compliance work reports transactions and meets existing obligations. Tax planning advises on arrangements the client is considering. Planning requires an assessment of the arrangement’s legal basis and risks before you recommend it.

Relying on What the Client Tells You

You can accept client information where appropriate, but doubtful figures need enquiries before you use them. The TPB’s reasonable-care guidance also requires attention to incomplete, inconsistent or apparently incorrect information.

For example, a rental expense total that doubles while the property remains unchanged calls for an explanation and supporting records. Compare the answer with prior-year records and documents relevant to the work. Record the discrepancy, your enquiry and the client’s response. An estimate needs a reasonable basis and must not imply more accuracy than it has.

When information is materially false, misleading or missing, discuss it with the client and explain the consequences. APES 220 prohibits providing a tax service based on that information if the client refuses an appropriate correction.

If a lodged return contains a material error, advise the client of their responsibilities and recommend the appropriate disclosure or amendment. Obtain authority if you will make the disclosure. When the client refuses to correct a material understatement, apply your practice’s acceptance and continuance policies to decide whether to continue acting.

The related NOCLAR provisions for non-compliance with laws and regulations are in APES 110, including section 360 for members in public practice. Registered agents must also apply the TPB’s false-or-misleading-statement duties, including the conditions for correction and any further disclosure.

Tax Planning Advice and the File Note Behind It

Tax planning advice needs a credible legal basis and working papers that show how you reached it. The standard directs members in public practice to the tax-planning requirements in section 380 of the Code.

Assess the facts, purpose and legal treatment of the proposed arrangement. Explain uncertainty and possible consequences to the client. The ATO’s Part IVA guidance describes the general anti-avoidance rules and their dominant-purpose test. Assess the proposed tax benefit and purpose against the applicable law before you recommend the arrangement.

Record the advice and its legal reasoning. Keep the facts and assumptions beside any calculations. Include the client’s instructions, alternatives considered and agreed limits on the work. Record why an uncertainty changes your recommendation, including whether specialist advice or a private ruling is needed.

A Fictional Trust File Note

In this fictional example, an Australian tax practice advises a family trust’s corporate trustee about a proposed distribution. The note records the following information.

• The trustee supplies the executed deed, amendments and draft accounts. The adviser records which deed clauses and beneficiary provisions were examined.
• The adviser checks the proposed beneficiary’s eligibility and examines who will receive and retain the economic benefit.
• Advice explains the proposed treatment and the facts supporting it. It records any section 100A or Part IVA issue requiring further assessment.
• The trustee confirms its instructions. The note records that the trustee makes the distribution decision and must complete the required resolution within the applicable time limit.
• The agreed work excludes preparing the beneficiary’s return. Any missing information prevents final advice until the stated assumption is resolved.

This note records an advice task, not a model distribution to copy. Keep the actual advice sent to the trustee with the supporting documents and calculations.

Engagement Terms and Fees for Tax Clients

APES 220 requires a written statement of relevant engagement terms in accordance with APES 305. An engagement letter is a practical way to communicate them. APES 305 treats communicating terms before work begins as preferable, rather than imposing a universal signed-letter prerequisite.

For tax work, state which entities and services the engagement covers. Set out the client’s responsibility for accurate, complete information and proper records. Explain that advice depends on the client’s circumstances. State who keeps the records needed to prepare returns and respond to ATO reviews.

Agree whether a later ATO review or audit falls within the work. If it is separate, explain how you will agree its scope and fees. Cover responsibility for answering requests, supplying records and approving responses. A tax-client engagement letter can carry these terms without replacing the advice file.

APES 220 directs fee arrangements to section 330 of the Code. Contingent fees are not universally prohibited for non-assurance tax work, but they create an objectivity threat that requires assessment. Specific engagement restrictions and assurance independence rules can prohibit them.

For an Australian engagement, a member receiving a referral fee or commission must tell the client in writing. Disclose the arrangement, the other party’s identity and how the benefit is calculated. A fee so low that you cannot perform the agreed work competently also creates a professional threat.

Meeting APES 220 When a New Tax Client Comes on Board

Collect enough information to understand the new client and support the first service. Tailor the document request to the agreed work.

1. Obtain relevant prior-year returns and notices of assessment. Record the client’s ATO account position, outstanding obligations and any open review.
2. Ask for earlier advice affecting the current work and details of entities the client controls. Identify the client entity separately from its trustee and representatives.
3. Compare the ABN with the Australian Business Register. Check the entity type against its supporting records and confirm trustee type from the deed and amendments.
4. Check TFN format through a secure collection method. A format check does not establish identity or authority to act.
5. Record the agreed scope, document suppliers and unresolved questions when you engage the client. Allocate responsibility for resolving each gap before you rely on the information.

Tax Genie’s guided form keeps the client’s answers with a record of changes and follow-up. Rules check register matches, formats and missing documents, then AI reviews common mistakes. Tax Genie asks the client to correct the affected sections and records who changed what and when. That gives you a dated record for the file alongside your professional enquiries and advice.

APES 220 Beside the TPB Code

APES 220 and the TPB Code overlap, but they have different enforcement routes. The statutory Code is in section 30-10 of the Tax Agent Services Act 2009. Additional obligations arise under the Code Determination.

Duty	APES 220 application	Matching TPB obligation
Honesty	Keep advice and statements free of material falsehoods or omissions.	Code item 1 requires honesty and integrity.
Reasonable care	Maintain competence and investigate doubtful information relevant to the work.	Items 9 and 10 cover reasonable care with client affairs and applying tax law.
Confidentiality	Obtain permission to disclose unless a relevant duty or right permits disclosure.	Item 6 requires client permission unless a legal duty requires disclosure.
False or misleading statements to the ATO	Avoid materially misleading work and address material errors.	Section 15 of the Code Determination adds duties when making or preparing statements.

A professional-body breach can lead to discipline separately from a TPB sanction. The TPB Code guide explains those statutory obligations in more detail.

Professional bodies also examine practice systems and records. CA ANZ’s quality review programme checks quality management and selected engagement files. CPA Australia’s practice assessments have identified tax-service documentation and client-communication gaps. IPA’s Quality Review Program expressly includes APES 220 in its compliance questions.

When a review queries your file, identify the missing evidence before changing your template. Add the client enquiry, advice basis or written engagement communication the file needs, then change the practice procedure that allowed the omission.