For tax agents
AML/CTF for tax agents and BAS agents: obligations, scope and practical steps
Most registered tax agents and BAS agents are now reporting entities — not because of their tax work, but because of the structures, transactions and client-money arrangements that sit beside it. This guide separates the work that is captured from the work that is not, and sets out what a tax practice must do.
The dividing line: routine tax work vs designated services
Preparing tax returns, lodging BAS, giving tax advice and general bookkeeping 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 you do on a file, not your registration with the Tax Practitioners Board.
- Forming a company, trust or other legal arrangement for a client (including SMSF establishments)
- Restructuring a company or trust, or transferring a shelf company
- Acting as, or arranging, a nominee director, secretary or shareholder
- Receiving, holding or managing client money or property for a transaction
- Assisting with the sale or purchase of a business, company or real estate
- Providing a registered office or business address for a client
If any of that sounds like your practice
Once a single designated service is in your service mix, your practice is a reporting entity. 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 run customer due diligence on every client you provide a designated service to — including longstanding clients when the captured work starts.
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). You must not tell the client: tipping off is a criminal offence. Cash transactions of A$10,000 or more connected to a designated service require 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.
Frequently asked questions
Do all tax agents need to comply with Tranche 2?
No — only tax agents who provide designated services. Routine tax return preparation, BAS lodgement and tax advice are not designated services. A tax agent who also forms companies or trusts, holds client money for transactions, or assists with business or property sales is captured. Most full-service practices will find at least one designated service in their mix.
Do I need to re-verify existing clients?
Customer due diligence applies when you provide a designated service to a client. For longstanding clients, the obligation bites when the captured work is provided — you cannot assume a ten-year relationship replaces verification. A risk-based approach lets you sequence the work, but the file must show verified identity, screening and a recorded risk decision.
Is an SMSF establishment a designated service?
Establishing an SMSF involves creating a trust, which is a designated service. Routine SMSF administration on its own is generally not captured, but practitioners who establish funds, act as or arrange trustee roles, or hold fund money for transactions are providing designated services.
What does the AML/CTF compliance officer do in a small tax practice?
The compliance officer owns the program: CDD decisions, screening outcomes, SMR lodgement, training, record-keeping and the response to any AUSTRAC request. In a small practice this is usually the principal, and it must be a person at management level notified to AUSTRAC.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser.