The Australian taxation landscape has undergone a profound transformation over the last 18 months. For tax practitioners and taxpayers alike, the environment has shifted from one of self-regulation to one of stringent statutory compliance.
However, a critical distinction must be made between the enacted professional standards that now govern your tax agent and the proposed residency rules that may affect your tax status. This article clarifies these changes to ensure 100% accuracy and compliance with the Australian Taxation Office (ATO) and Tax Practitioners Board (TPB).
Part 1: The New Code of Professional Conduct (Enacted Law)
Following the “PwC tax leaks” scandal, the Federal Government moved swiftly to strengthen the integrity of the tax profession. The Tax Agent Services (Code of Professional Conduct) Determination 2024 was registered in July 2024 and, following significant amendments in late 2024, is now fully effective for all tax practitioners as of 1 July 2025.
At AIM S Australia, we are fully compliant with these new obligations. Here is what they mean for you as our client.
1. The “False and Misleading Statements” Obligation (Section 15)
There has been significant media coverage regarding the so-called “dob-in” provisions. It is vital to separate fact from fiction. Under the finalised Section 15 of the Determination, tax agents have a strengthened duty to ensure that statements made to the ATO or TPB are accurate.
- The Protocol: If we identify that a statement (such as a tax return or BAS) is materially false or misleading, we are legally required to advise you to correct it.
- The Consequence: If the error is due to recklessness or intentional disregard of the law, and you refuse to correct it within a reasonable time, we must withdraw from the engagement.
- The Reporting Threshold: We are legally required to report the matter to the ATO or TPB only if we have reasonable grounds to believe your actions have caused (or will cause) substantial harm to the interests of others (which includes the public revenue), or where otherwise required by law.
Our Promise: This rules out the fear of automatic reporting for minor errors or genuine mistakes. AIM S Australia maintains strict client confidentiality within the bounds of the law. We work with you to ensure your returns are accurate, protecting you from the “substantial harm” thresholds that trigger these mandatory reporting measures.
2. Mandatory Disclosures (Section 45)
Transparency is the new standard. Under Section 45, all tax practitioners must now disclose specific “relevant matters” to current and prospective clients. This includes any convictions for serious tax offences, fraud, or dishonesty, as well as any sanctions imposed by the TPB or insolvency events.
This obligation applies to events that have occurred on or after 1 July 2022.
- Compliance Status: AIM S Australia and its partners have no such adverse matters to disclose. We stand on a record of integrity and professional excellence, recently recognised at the 2025 Corporate Accountant Awards.
Part 2: Individual Tax Residency – The “Unfinished” Swap
While the rules for tax agents have been locked in, the rules for taxpayers—specifically regarding tax residency—remain in a state of transition.
It is a common misconception that the government’s “Modernising Individual Tax Residency” framework is already in force for the 2025 financial year. This is incorrect. As of November 2025, the proposed “Bright Line” tests have not yet received Royal Assent and have not replaced the existing common law tests for current lodgements.
The Current Law (2024–2025 Income Year)
For your 2024 and 2025 tax returns, Australian tax residency is still determined by the four existing tests under the Income Tax Assessment Act 1936:
- The Resides Test: The primary test based on your intention, physical presence, family, and business ties.
- The Domicile Test: You are a resident if your domicile is in Australia, unless your “permanent place of abode” is overseas.
- The 183-Day Test: A statutory test that can be rebutted if your usual place of abode is outside Australia.
- The Commonwealth Superannuation Test.
The Proposed “Bright Line” Future
The Government has announced an intention to move to a “Bright Line” test (where 183 days of physical presence automatically triggers residency) and a “45-Day Rule” for complex cases. These changes are slated for future implementation (likely affecting income years commencing 1 July 2026, subject to final legislation).
Risk Warning: Taxpayers must not “jump the gun”. Relying on the proposed 45-day rule to determine your residency status for the current year could lead to significant incorrect assessments. Until the new legislation is enacted, the “Resides Test” remains the law of the land.
Conclusion: Certainty in an Uncertain World
Australia has indeed swapped uncertainty for strict rules in the realm of professional conduct. Your tax agent is now held to a higher statutory standard than ever before—a change we at AIM S Australia welcome as it professionalises the industry and protects compliant taxpayers.
However, regarding tax residency, the uncertainty persists until the new legislation is finalised. Navigating this gap requires expert advice that distinguishes between what is proposed and what is law.
At AIM S Australia, we navigate you through the current laws while monitoring the legislative pipeline to future-proof your strategy. This approach includes rectifying historical compliance issues before they escalate. Whether you require assistance with Multiple Overdue Tax Returns or Complex Late Tax Filing for Expats and Non-residents, our team ensures your tax history is brought up to date, mitigating risk and establishing a clean slate for the future.
Contact AIM S Australia Tax Accountants today to bring your tax affairs up to date.
About the Author
Nika Widanage FCPA is the Managing Partner of AIM S Australia Tax Accountants. A Registered Tax Agent holding a Master’s degree from Monash University, she specialises in high-net-worth expatriates on individual tax residency and cross-border taxation. Her practice focuses on risk mitigation, ATO compliance, and the voluntary disclosure process.
Nika’s industry leadership was recognised as the winner of Financial Controller of the Year at the 2025 Corporate Accountant Awards and as a dual finalist for both Partner of the Year (Boutique Firm) and Public Accountant of the Year in the 2024 Australian Accounting Awards.
General Professional Disclaimer: This publication contains general information and commentary for guidance purposes only. It is intended to provide a high-level overview of complex taxation issues and does not constitute personalised tax, financial, investment, or legal advice. Specifically, this guide does not constitute advice regarding the suitability or timing of asset purchases, investments (including SMSF-related assets or property gearing), or the determination of specific claimable quantum for your unique financial position. The information, including references to statutory rates, penalties, ATO policy, and legislation (such as the General Interest Charge or Failure to Lodge penalties), is based on current prevailing law at the time of publication and is inherently subject to change without notice. No reader should act, or refrain from acting, on the basis of this material without seeking specific, tailored professional advice concerning their individual circumstances. We strongly advise that you consult a registered tax agent for a formal assessment of your unique tax and financial position. The use of this content does not create an accountant-client relationship with Nika Widanage or AIM S Australia Pty Ltd.
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