Table of contents
- Introduction
- Proper client records
- Types of records
- Security and confidentiality
- Interaction with client obligations
- Looking ahead: broader compliance is coming under AML/CTF Tranche 2
- How CCH iFirm can help
Introduction
Tax practitioners (registered tax agents and BAS agents) must comply with new record-keeping requirements, among other additional obligations under the Tax Agent Services (Code of Professional Conduct) Determination 2024.
These additional requirements apply from:
- 1 July 2025 – for registered tax practitioners with 100 or less employees as at 31 July 2024
- 1 January 2025 – for any other registered tax practitioners.
Various aspects of the new requirements for record-keeping are highlighted below.
1. Proper client records:
- Language: Records must be in English or easily convertible to English.
- Retention period: Records must be retained for at least 5 years after the service has been provided.
- Content: Records should show the nature, scope, and outcome of the tax agent service provided, reference information considered, and include all advice received from the client and provided to the client, as well as underlying reference information or reasoning and bases of advice for complex matters.
2. Types of records:
Examples of records to be kept at a minimum are noted below, according to guidance from the Tax Practitioners Board, who regulates the registration of tax agents and BAS agents:
- Client details: Name, contact information, date of birth, bank and employment details.
- Engagement agreements: Letters of engagement or other agreements setting out terms and conditions.
- Proof of identity: File notes relating to proof of identity or client verification checks undertaken, although it is not recommended that copies of identity documents themselves be kept.
- Client permissions: Consent to disclose client information.
- Service documentation: Records explaining or evidencing the tax agent service provided, including advice received and provided, steps taken, and communications with the client and third parties.
3. Security and confidentiality:
- Protection: Adequate procedures, policies, systems, and controls must be in place to protect the security and confidentiality of client records.
- Compliance: Ensure compliance with privacy laws, including the Privacy Act and the Privacy (Tax File Number) Rule 2015.
4. Interaction with client obligations:
- Client Records: Clients must still comply with their own record-keeping obligations under taxation laws.
- Coordination: Accountants should have a clear understanding with clients about what records each party must keep to avoid duplication.
The record-keeping requirements are part of broader ongoing requirements in relation to maintaining a tax agent registration with the Tax Practitioners Board, including that the registered tax practitioner is a “fit and proper” person.
Looking ahead: broader compliance is coming under AML/CTF Tranche 2
The introduction of Tranche 2 reforms marks a significant shift in Australia's anti-money laundering and counter-terrorism financing (AML/CTF) landscape. These reforms extend AML/CTF obligations to new entities, including accounting firms, which are now classified as "Tranche 2 entities." As of 1 July 2026, AML/CTF obligations will apply to certain services provided by accounting firms.
These will include obligations such as:
- Undertaking more comprehensive client identity checks
- Client due diligence including ongoing monitoring and reporting of suspicious client activities, and
- Maintaining comprehensive records of all transactions, client information, and AML/CTF activities. These records must be kept for at least 7 years to provide evidence of compliance with AML/CTF obligations.
Firms that take steps now to establish clear, repeatable workflows will be far better positioned to meet both current and future obligations.
How CCH iFirm can help
To support compliance and make the process more efficient, we recommend implementing digital tools that streamline the record-keeping process:
- Document Vault: Securely stores client identity records, verification documents, and compliance history ensuring traceability and easy audit access.
- Client Portal: Offers a secure channel for clients to submit ID documents, update personal information, and track engagement history.
- Digital Signatures: Provide a fast, legally recognised way to authorise identity declarations, engagement letters, and other required documents, all without printing or scanning.
Using these tools together creates a seamless and secure experience for your clients, while ensuring your practice remains compliant, efficient, and audit-ready.
