Public Groups Adviser Strategy

About the program

The 'Public Groups Adviser Strategy' operates under the Tax Avoidance Taskforce, which is focused on preventing, detecting, and addressing tax avoidance and obstructive behaviours. Its goal is to ensure that Australia’s largest and wealthiest taxpayers pay the correct amount of tax, as the community expects.

We recognise the significant influence tax advisers have on taxpayer compliance as they play a key role in helping public and multinational businesses meet their tax and superannuation obligations.

Given the complexity of tax laws, we encourage taxpayers to seek high-quality tax advice to support accurate and compliant reporting.

Our focus areas

We actively engage with the tax profession to raise concerns early and support advisers in delivering accurate, compliant advice to their clients and maintain strong relationships across the industry to shape and refine our approach.

Our focus areas on the role of advisers include the following:

• structuring tax avoidance or high-risk arrangements for large business
• obstructing investigations, such as making baseless legal professional privilege (LPP) claims or giving false or misleading statements in response to formal notices.

We monitor adviser behaviour in the large market through various channels, including the Foreign Investment Review Program, the Rulings Program and compliance and risk functions. When we identify an arrangement of concern, we may also issue a taxpayer alert.

Where we identify that a particular firm may have been involved in designing, marketing or promoting an arrangement of concern, we will request information about its role and any relevant clients.

We aim to improve compliance and transparency among advisers through key initiatives such as the LPP Protocol and support for the development of the Large Market Tax Adviser Principles. These initiatives are already helping to shape and improve adviser behaviour.

Legal professional privilege

We recognise that Legal professional privilege (LPP) is a fundamental common law right and support taxpayers making claims where the communications are privileged.

We have seen some cases where excessive LPP claims are used to defer, delay or defeat the assessment process. This includes blanket claims over large volumes of documents without the necessary review to validate the claims. We are also concerned by contrived arrangements or relationships which purport to attract LPP but are used for the purpose of improperly concealing communications from us.

We introduced the LPP Protocol to support taxpayers and their advisers when making LPP claims. Following the protocol gives all parties confidence that a reasonable standard has been taken in the processes applied to establish and test communications as being privileged. In most cases, it results in sufficient information for the ATO to assess whether to accept or challenge LPP claims.

Public and multinational businesses that don’t follow the protocol or fail to justify their LPP claims may face further enquiries from us.

For more information, see Compliance with formal notices – claiming legal professional privilege in response to formal notices – LPP protocol.

Large Market Tax Adviser Principles

The Large Market Tax Adviser Principles (published August 2022) are a voluntary framework developed by the 4 largest tax advisory firms with input from the ATO and Tax Practitioners BoardExternal Link (TPB). All firms offering tax advisory services may choose to adopt the principles.

The 4 firms have each published the Principles and explanatory information on their websites, see:

• Deloitte Australia Large Market Tax Adviser PrinciplesExternal Link
• EY Australia Tax ServicesExternal Link
• KPMG's adoption of Large Market Tax Adviser PrinciplesExternal Link
• PwC Australia Tax ServicesExternal Link (scroll to the bottom of the main body to find the Principles).

The Principles complement the existing regulatory framework and commit firms to have in place a documented system of quality management which ensures the firm:

• has processes and procedures in place to prevent them from not knowingly or recklessly advising on certain arrangements (proscribed engagements) – such engagements include those which rely on or involve a lack of disclosure to the ATO for their effectiveness
• has protocols to identify and govern how they deal with higher risk engagements – 7 non-exhaustive triggers of higher risk engagements are detailed and includes positions that may pose systemic risks to government revenue
• bases their tax advice on a comprehensive review of facts and assumptions which meets or exceeds the reasonably arguable standard, and which is documented
• has consequences in place for partners that fail to adhere to the Principles
• works openly and honestly with the Commissioner.

Firms that adopt and follow the principles provide added confidence to their clients, the community and to us about the quality of their tax advice.

Behaviour that causes us concern

We'll act quickly when tax advisers act in ways that compromise the integrity of the tax system or facilitate non-compliance. In addition to the regulatory role of the TPB, we work with professional bodies to uphold the standards and reputation of the tax profession. In serious cases, advisers who promote tax avoidance schemes may face penalties under promoter laws.

The types of behaviour that cause us concern include:

• deliberately obstructing our ability to collect information or administer tax laws effectively
• promoting or facilitating schemes designed to avoid paying the correct amount of tax.

We are committed to ensuring advisers support a fair and transparent tax system.