APES 220 Taxation Services: the standard for tax practitioners

APES 220 *Taxation Services* is the professional and ethical standard that governs how Australian accountants provide taxation services. It is issued by the Accounting Professional & Ethical Standards Board (APESB) and is mandatory for members of the three professional accounting bodies — CPA Australia, Chartered Accountants ANZ and the Institute of Public Accountants. In short, if you are a member of one of those bodies and you prepare returns, give tax advice, or otherwise act on tax matters for a client, APES 220 sets the minimum ethical conduct you must meet.

The standard exists because tax work carries a distinctive tension: a practitioner owes duties to the client, but also owes obligations to the broader public interest and the integrity of the tax system. APES 220 codifies how to manage that tension.

What APES 220 is and who must comply

APES 220 is one of a suite of profession-wide standards built on top of APES 110 Code of Ethics. APESB describes it as specifying "the professional obligation of all members who provide taxation services in relation to a client's or employer's taxation obligations", so it covers members in business as well as members in public practice. Some requirements (for example on client monies and fees) apply only to members in public practice.

Membership of a professional body is the trigger: the standard is enforced through each body's disciplinary processes, not by a government regulator directly. That makes APES 220 a self-regulatory layer that sits alongside, rather than replaces, the statutory regime.

The current version of APES 220 was issued in January 2025 and is effective from 1 July 2025, superseding the July 2019 version. It links tax planning work to the new tax planning sections of APES 110 (Section 280 for members in business and Section 380 for members in public practice). See the APESB standard page.

Where APES 220 sits among other obligations

It helps to see APES 220 as one of several overlapping rulebooks for tax practitioners:

• APES 110 Code of Ethics — the foundational ethics framework (integrity, objectivity, professional competence, confidentiality, professional behaviour). APES 220 applies these principles specifically to tax work.
• The legislated Tax Agent Services Code — the Code of Professional Conduct in the *Tax Agent Services Act 2009*, administered by the Tax Practitioners Board (TPB). This applies to registered tax and BAS agents.
• Taxation law itself — the *Income Tax Assessment Acts*, the *Taxation Administration Act 1953* and related law, including the administrative penalty regime.

The duties overlap heavily but are not identical. A registered agent can breach the TPB Code, APES 220 and tax law with a single act, or breach one without the others. For a broader view of the regulatory landscape, see the tax practitioners topic hub.

Core obligations under the standard

APES 220 sets out professional obligations across several recurring themes. The substance, drawn from the APESB standard, covers:

• Professional competence and due care — providing tax services with the necessary skill and diligence.
• Tax planning, schemes and arrangements — complying with the APES 110 tax planning sections, and not promoting schemes whose dominant purpose is a tax benefit that is not reasonably arguable.
• Use of estimates — considering whether an estimate is reasonable, and advising the client of the risks where it may not be.
• False or misleading information — not making, or causing, statements that are false or misleading in a material manner.
• Client monies — prompt transmission of refunds and other client monies in line with APES 310.
• Professional fees — fees computed in accordance with Section 330 of APES 110.
• Documentation — working papers that appropriately document the work performed.

False or misleading statements and materiality

A central obligation is that a member "shall not knowingly or recklessly make a statement or cause another to make a statement in or in connection with a Taxation Service that, by its content or by an omission, is false or misleading in a material manner" (para 7.2). A member must also not provide a taxation service where the underlying information is false, misleading or omits material information and the client or employer will not amend it (para 7.1), and must discuss the issue with the client and explain the consequences (para 7.3).

The prohibition in para 7.2 bites where conduct is *knowing* or *reckless*. APES 220 also uses a concept of materiality: references to false and misleading information exclude information "of an immaterial or inconsequential nature" (para 7.9). Materiality is a judgement call, and practitioners should not treat it as a loophole — the safer course is to correct or decline to be associated with anything that could mislead.

This duty closely mirrors the TPB's guidance on false or misleading statements under the legislated regime, so a single misstatement can engage both standards. For the statutory dimension, see the Tax Practitioners Board.

Tax schemes and the reasonably arguable position

Para 5.6 provides that a member "shall not promote, or assist in the promotion of, or otherwise encourage any tax schemes or arrangements where the dominant purpose is to derive a tax benefit, and it is not reasonably arguable that the tax benefit is available under Taxation Law". For such a scheme, the only advice a member may give is that, in their opinion, it is not effective at law. The decision to enter any tax plan always remains the client's or employer's (para 5.1).

"Reasonably arguable" is also a concept used in the administrative penalty provisions of the *Taxation Administration Act 1953*; check the penalty consequences for a given scenario with the Australian Taxation Office.

The practical effect of this provision is to stop accountants lending professional credibility to aggressive or contrived arrangements. If a position cannot be defended on a reasonably arguable basis, the standard expects the member not to promote it.

Client monies, fees and documentation

Three more operational obligations round out the standard:

• Client monies — a member in public practice must promptly pass on client monies received from revenue authorities in line with APES 310 *Client Monies*, must not use or withhold tax refunds to settle fees unless the client agrees in writing, and must bank client funds in a designated trust account (paras 9.1–9.3).
• Professional fees — fees for taxation services must be computed in accordance with Section 330 *Fees and Other Types of Remuneration* of APES 110 (para 10.1).
• Documentation — members must prepare working papers and records that demonstrate the basis for the tax positions taken and the advice given. Good documentation is both an ethical requirement and the practitioner's first line of defence in any later dispute.

Common pitfalls and how to comply

The recurring failures under APES 220 are rarely exotic. They tend to be:

• Signing or lodging documents the practitioner suspects are inaccurate, on the basis that it is "the client's return".
• Treating materiality as permission to ignore a misstatement that is, in fact, consequential.
• Promoting structures where the tax outcome is hopeful rather than reasonably arguable.
• Thin or missing working papers, leaving no record of the reasoning behind a position.
• Confusing APES 220 with the TPB Code and assuming compliance with one guarantees the other.

To stay compliant:

1. Document your reasoning for any position that is not clearly settled, recording the authorities relied on.
2. Apply the reasonably arguable test honestly before lending your name to any arrangement.
3. Correct or withdraw from anything false or misleading rather than rationalising it as immaterial.
4. Check the operative version of APES 220 and any conforming changes flowing from APES 110.
5. Map your obligations across APES 220, the Tax Agent Services Code and tax law, since one act can engage all three.

APES 220 ultimately asks tax practitioners to be technically careful and ethically firm at the same time — to serve the client without becoming an instrument of misstatement or aggressive tax avoidance.