Tax agents’ advice to be privileged

MEDIA RELEASE: ATTENTION BUSINESS EDITORS

TaxAgents Institute of New Zealand

Tax agents’ advice to be privileged

Confidential tax advice given by tax agents who are members of The TaxAgents Institute of New Zealand (TINZ) will, under certain conditions, be legally privileged after the Inland Revenue Department recognised TINZ as an ‘approved advisor group’. TINZ is just the second organisation to be granted approved advisor status. The first was the New Zealand Institute of Chartered Accountants in 2005. Before that, only lawyers could offer privileged advice on tax matters.

“This change means that clients of TINZ members won’t have to disclose confidential tax advice documents to IRD, provided certain conditions are met,” says TINZ president Alex Zilionis.

“It’s very good news for the many thousands of small and medium sized enterprises and individual taxpayers who look to tax agents for rigorous, independent and confidential tax advice. The IRD’s decision reflects the commitment of TINZ and its members to upholding the highest ethical and professional standards.” Mr Zilionis said TINZ had worked for over a year to achieve approved advisor group status.

TINZ had to show that its members were appropriately qualified, met high standards of professional competence, and that their work was assured by a robust code of ethics and complaints procedure. The conditions that have to be met for privilege to apply are set down in the Taxation (Base Maintenance and Miscellaneous Provisions) Act 2005 and in the IRD Standard Practice Statement 05/07 - Non-disclosure right for tax advice documents.

The privilege applies to tax advice documents prepared by tax agents who are members of an approved advisor group, and to documents prepared by clients specifically for the purpose of seeking tax advice. Mr Zilionis said TINZ members performed similar roles to chartered accountants, including provision of tax advice, preparation of tax returns, financial statements and representing taxpayers in their dealings with IRD.

ENDS

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