IESBA: Global Ethics Standards on Tax Planning

IESBA: Global Ethics Standards on Tax Planning

• 16 April 2024
• Ethics and Professionalism
• South African Accounting Academy

Moving away from a purely mechanical and legalistic approach, the goal of the IESBA's Tax Planning Standards is to provide a principles-based framework and a global ethical benchmark applicable to tax planning services and activities. This will establish a consistent point of reference for all professional accountants, as well as other tax professionals who are strongly encouraged to use the standards, when dealing with tax planning, to ensure due consideration of public interest as well as potential reputational, commercial, and wider economic consequences for their clients or employing organizations.

These standards are especially relevant in the context of rising public scrutiny of tax avoidance schemes which can harm companies’ credibility and corporate reputation, as well as risking litigation and harming the public interest. Responding to increased public interest concerns, the fundamental goal of these standards is to ensure an ethical, credible basis for advising on tax planning arrangements, thereby restoring public and institutional trust on a topic that is core to the social contract between corporations and the market which supports them.

These new standards:

• Will strengthen the ethical framework that guides professional accountants providing tax planning services; other providers strongly encouraged to follow the standards.
• Consists of a Comprehensive framework includes a new requirement and guidance on due consideration of reputational, commercial, and wider economic consequences in their tax advice.
• Aims to restore public trust on a core topic to the social contract between corporations and the market which supports them.

These new standards are also aimed at complementing and further strengthening the relevance of the existing IESBA Code addressing Tax Planning and Related Services.

The standards will become effective on 1 July 2025.

The Basis of Conclusions, which was compiled by the staff of the IESBA, can be downloaded at https://ifacweb.blob.core.windows.net/publicfiles/2024-04/Basis%20for%20Conclusions%20-%20Tax%20Planning%20and%20Related%20Services.pdf

Click here to download the Final Pronouncement:

https://ifacweb.blob.core.windows.net/publicfiles/2024-04/Final%20Pronouncement%20-%20Tax%20Planning%20and%20Related%20Services.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• As an accountant, auditor and independent reviewer, you need to be aware of and consider the information contained in publications by various professional bodies and standard-setters, e.g. IESBA, IAASB, etc. – so that you can apply this in the performance of your duties.
• As a practitioner providing tax services, you must adhere to the new global ethics standards in this regard.

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