AML/CTF for tax agents: obligations, scope and practical steps

The dividing line: routine tax work vs designated services

Preparing tax returns and giving tax advice are not designated services on their own. A practice becomes a reporting entity when it provides one of the professional designated services in the AML/CTF Act — and the trigger is what it actively does on a file, not its registration with the Tax Practitioners Board.

• Taking active steps that directly advance formation of a company, express trust or other legal arrangement, which can include establishing the trust component of an SMSF
• Changing the legal form of a body corporate or legal arrangement, including through a merger or demerger, or transferring a shelf company
• Providing a qualifying item 7 acting arrangement or item 8 nominee-shareholder service on behalf of a nominator
• Receiving or holding and also controlling or managing client money or property as part of directly advancing a transaction, unless a statutory boundary applies
• Taking active steps that directly advance a sale or transfer of a body corporate or legal arrangement, or a real-estate transaction; an asset-only business sale requires separate service analysis
• Providing a registered-office or principal-place-of-business address in the course of carrying on a business

If any of that sounds like your practice

Once a designated service is in your service mix, your practice is a reporting entity for that work. You needed to enrol with AUSTRAC by 29 July 2026 (enrol immediately if you have not), appoint an AML/CTF compliance officer, document your risk assessment and AML/CTF program, and apply CDD to customers receiving designated services. A qualifying pre-commencement customer can generally continue without initial CDD until an SMR obligation arises or a significant change in the relationship's nature or purpose causes medium or high risk; ongoing CDD still applies.

What customer due diligence looks like in a tax practice

Verification does not have to mean buying electronic checks. The AML/CTF framework accepts a manual, document-based verification path when it is done properly and evidenced — what matters is that you can show what you verified, from which source, and when.

• Identify the client and verify their identity (individuals) or their registration details and ownership (companies and trusts)
• For companies and trusts, identify the beneficial owners — the individuals who ultimately own or control 25% or more, or control the entity another way
• Screen the client and its beneficial owners against sanctions lists, PEP registers and adverse media
• Assess the money laundering and terrorism financing risk of the relationship and record why you rated it
• Re-verify and re-screen on a risk-based cycle, and when circumstances change

Reporting duties a tax practice cannot delegate

If you form a suspicion that a client or transaction is connected to money laundering, terrorism financing or proceeds of crime, you must lodge a suspicious matter report with AUSTRAC — generally within three business days of forming the suspicion (24 hours where it relates to terrorism financing). Do not disclose protected SMR-related information where that would or could reasonably be expected to prejudice an investigation. An individual physical-currency transaction of A$10,000 or more connected to a designated service requires a threshold transaction report within ten business days.

How the TPB regime interacts with AML/CTF

Registered tax practitioners already carry Code of Professional Conduct obligations under the TASA. The AML/CTF regime sits beside it: AUSTRAC administers the AML/CTF Act, and the TPB has published guidance on how the two regimes overlap. Meeting one does not satisfy the other — but a well-run practice can use the same client file discipline for both.