Compliance
Strengthening Integrity: New Penalties and Expanded Oversight for Tax Advisers in Australia
Australia is implementing tougher accountability measures for tax practitioners, including criminal sanctions and stronger oversight, in response to concerns about misconduct and unfair tax practices.
By NomadicTax Research Team • 5-8 min read • July 14, 2026
## Context and Rationale
Concerns about misconduct by tax advisers—highlighted by events like the PwC tax leaks scandal—have pushed the Australian government to pursue stronger regulation of those who prepare tax returns and give tax advice. The goal: encourage ethical behaviour, protect taxpayers, and improve trust in the taxation system. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## What’s Changing: Key Reforms
Effective under proposed legislation, these reforms will:
- Introduce **criminal penalties** for **unregistered tax preparers**. Unregistered individuals offering tax advice will face harsher legal consequences. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- Expand **civil penalties** for breaches of the Code of Professional Conduct (Code) for registered tax practitioners. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- **Double the maximum duration for registration termination** from existing periods to up to 10 years. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- Authorise the **Tax Practitioners Board (TPB)** to issue infringement notices, enter enforceable voluntary undertakings, and impose contingent and interim registration suspensions. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
In parallel, changes strengthening the *foreign resident Capital Gains Tax regime* are being introduced: foreign residents will have reduced ability to avoid tax or re-open settled tax affairs. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## Who Needs to Know and What to Do
This affects a range of stakeholders:
- **Current and future tax agents**: Those with registrations to prepare tax returns or provide tax advice must abide by the updated Code and be aware of expanded liabilities. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/speeches/second-reading-speech-treasury-laws-amendment-tax-reform-no-1?utm_source=openai))
- **Clients engaging tax advisers**: Verify that your adviser is registered and in good standing; unregistered preparers offer no protections and may face criminal penalties. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- **Businesses contracting adviser firms**: Ensure contracts include obligations for ethical behavior and compliance with the Code; define expectations clearly.
## Example Scenarios
- An accounting firm that is advertising tax-preparation services without registration could now face prosecution rather than just administrative penalties.
- A registered tax agent discovered to have breached the Code by advising clients to misstate income or hide assets could face civil penalties, suspension, or even removal for up to ten years.
## How to Prepare and Comply
- Check current registration status through the TPB Register before engaging or advertising tax services. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- Tax practitioners should review internal compliance protocols, including conflicts of interest, disclosure obligations, and procedures to report misconduct. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- Keep accurate records—advice given, evidence, correspondence—to be able to defend against allegations of misconduct or claims of misleading information.
- Stay tuned for guidance and resources from the TPB and Treasury, which will accompany implementation. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## Implications for Trust and Reputation
These reforms mean there’s greater risk—and responsibility—for practitioners. But for those committed to ethical practice, they offer opportunity to solidify trust with clients and differentiate through compliance and transparency.