New Global Ethical Standards for Tax Advisers Launched by International Ethics Board

The International Ethics Standards Board for Accountants (IESBA) has introduced a comprehensive set of global ethical standards for tax advisers in response to recent tax scandals and controversies within the accounting profession. These standards mark the first of their kind and are aimed at guiding professional accountants and other tax professionals in ethical considerations related to tax planning and associated services. Scheduled to take effect from July 1, 2025, these standards will be incorporated into IESBA's existing code of ethics.

The framework includes provisions requiring tax advisers to carefully consider the reputational, commercial, and broader economic implications of their advice. According to IESBA, these standards are intended to establish a consistent ethical reference point for all professional accountants and tax professionals worldwide. The development of these standards involved extensive consultation with over 150 industry representatives from various jurisdictions between 2021 and 2023.

Gabriela Figueiredo, Chair of IESBA, emphasized the importance of maintaining the public interest while fulfilling obligations to clients, particularly in light of recent scandals that have highlighted ethical concerns in tax practices. She stated, "Professional accountants have an important duty to their clients but must not lose sight of their fundamental duty to the public interest." Figueiredo underscored the need for a robust framework to guide ethical decision-making in the complex realm of tax advising.

The newly established standards represent a departure from a purely mechanical and legalistic approach to tax advising. They aim to provide guidance for navigating ethical dilemmas and fostering trust in the integrity of the tax system. This announcement comes amid allegations against PwC Australia regarding the disclosure of confidential government information on tax legislation for commercial purposes. Additionally, recent inquiries in Australia revealed significant income-splitting practices among equity partners at major accounting firms, raising further concerns about tax avoidance strategies.

The launch of these global ethical standards reflects a broader trend towards accountability and transparency in the accounting profession, signaling a commitment to upholding ethical standards in tax advising worldwide.

By fLEXI tEAM