There have been some changes to the tax-related elements of the private sector whistleblowing regime, which aim to provide greater support to tax whistleblowers, improve collaboration between Australia’s tax system regulators and enhance the effectiveness of regulatory responses to suspected breaches of tax laws.
Organisations should review and if necessary update their whistleblower policies and procedures to reflect the changes, which include an expanded list of eligible recipients for tax-related disclosures.
The enhanced whistleblowing regime for private sector organisations introduced into Part 9.4AAA of the Corporations Act 2001 (Cth) (Corporations Act) was complemented by a substantially similar enhanced regime under the Taxation Administration Act 1953 (Cth) (Tax Administration Act) where the alleged misconduct or improper conduct related to the entity’s tax affairs. The Tax Administration Act included as eligible recipients of protected whistleblower disclosures (among others) the Australian Taxation Office, registered tax or BAS agents, auditors and a range of other prescribed eligible recipients including trustees, senior managers or partners, members of audit teams, and other employees or officers with tax-related duties.
However, the existing regime did not protect whistleblowers who disclosed their concerns to other regulators of the tax system or other entities that may support the whistleblower, and did not allow other regulators of the tax system, principally the Australian Charities and Not-for-profits Commission (ACNC), the Inspector-General of Taxation (IGT) and the Tax Practitioners Board (TPB) to lawfully share whistleblower information for purposes of effectively discharging their functions and duties and responding to suspected non-compliance.
Following a period of public consultation, the Tax Administration Act and its associated regulations have been amended to (among other things) extend tax-related whistleblower protections. Collectively, the changes commenced on 1 July and 12 October 2024 and relevantly include:
- extending whistleblower protections to eligible disclosers who make tax-related disclosures to:
- the TPB or the Commissioner of Taxation (the ATO), where the discloser considers the information may assist the TPB to perform its functions or duties under the Tax Agent Services Act 2009 (Cth) (TASA) or an instrument made under that Act;
- the Inspector-General of Taxation (IGT), whose role is to undertake investigations into tax administration systems established by the ATO, TPB and tax laws;
- prescribed entities of which the discloser is a member, for the purpose of obtaining assistance in relation to the disclosure (no entities have yet been prescribed, however entities that may be prescribed in future include relevant professional associations, bodies that represent the professional interests of disclosers, and registered trade unions); and
- a medical practitioner or psychologist, for the purposes of obtaining assistance in relation to the disclosure.
- prescribing the IGT, TPB and the ACNC as additional authorised recipients of disclosures of a protected discloser’s identity, or information that is likely to lead to identification of the discloser. The purpose of this change is to allow the sharing of whistleblower information between regulators of the tax system to facilitate more effective regulatory responses to suspected breaches; and
- reversing the burden of proof for a discloser’s claims for protection from liabilities, to better align with public sector whistleblower legislation. This means that where an individual makes a claim that their disclosure qualifies for protection under the Tax Administration Act, the individual will bear the onus of substantiating their claim for protection, on the basis that the circumstances of the information disclosed and the individual’s motivations for disclosing it are uniquely within their knowledge.
Many organisations’ whistleblower policies deal with whistleblowing in relation to tax affairs: we recommend you review your policy and procedure materials to ensure they reflect the expanded group of eligible recipients for tax-related disclosures. Whistleblower policies should, in any event, be reviewed regularly to ensure currency with law and market practice. We would be delighted to assist you: please contact us to discuss how we can help.