The Tax Practitioners board (TPB) has released for comment a draft practice note which aims to assist registered tax practitioners understand obligations under the Code of Professional Conduct in relation to the use of outsourcing and offshoring.
The TPB has developed this practice note to assist tax practitioners to understand their obligations under the Code, raising awareness of relevant considerations when entering into arrangements involving outsourcing and offshoring and providing a consolidated listing of further reference information.
The TPB suggests that registered tax practitioners may wish to consider the following general factors:
- 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;
- the details of any limitation of liability and indemnity insurance arrangements for the parties (for example, clauses contained in the terms and conditions of outsourced provider agreement(s) or terms of use);
- if the outsourced provider is allowed to unilaterally change relevant terms of the agreement (that is, without input from the registered tax practitioner), including in relation to change in business and/or ownership structure, how or where data is stored or managed, and review processes;
- if there is flexibility to allow for changes / developments in technology and operations;
- how information is being transferred between various systems and whether data integrity is being maintained;
- how information is being stored and accessed;
- the processes in place in relation to the backup and archiving of information (such as multiple backup servers);
- if there are any relevant legislative and regulatory requirements associated with having any information held offshore (that is, information stored or processed in equipment not located in Australia).
The Board notes that while the Code does not specifically deal with outsourcing and/or offshoring, a number of its obligations are relevant eg Code item 6 (disclosure by a tax practitioner), Code item 7 (provision by practitioner of service competently), Code item 9 (taking reasonable care in ascertaining a client’s affairs) and Code item 10 (taking reasonable care to ensure tax laws are applied correctly to the circumstances in relation to which they are providing advice to a client).
Comments
Comments on the draft are due by 12 October 2017