Tax Ethics: Stay Compliant, Protect Your Practice, and Get Paid
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Ethics in tax isn’t just about doing the right thing—it’s about keeping your practice safe, your clients compliant, and your professional reputation intact.
In today’s environment, where SARS is ramping up audits and tightening enforcement, ethical tax practice has become a non-negotiable. Whether you’re a practitioner advising SMEs or a financial executive managing risk, how you handle ethical grey areas can either elevate your value—or expose you to serious consequences.
Why Tax Ethics Matter More Than Ever
Tax practitioners are under growing pressure—from clients who want lower tax bills, from regulators who expect precision, and from the public demanding transparency. The challenge? Navigating the fine line between smart planning and illegal evasion.
Unethical or reckless behaviour can result in:
SARS audits or penalties
Legal action, including jail time for gross misconduct
Loss of professional registration
Irreversible damage to your personal and business reputation
But here’s the upside: when done right, ethical tax practice doesn’t just protect you. It builds trust with clients and positions you as a professional worth paying more for.
Common Ethical Pitfalls—and How to Avoid Them
Even the best professionals face ethical dilemmas, like:
Client pressure to manipulate income or inflate expenses
Aggressive tax schemes that push the limits of legality
Confidentiality conflicts, such as suspected fraud
Conflicts of interest, like benefiting personally from client investments
Negligence, from failing to apply professional due care
The IESBA Code of Ethics, which CIBA members must follow, outlines five fundamental principles:
Integrity;
Objectivity;
Professional Competence and Due Care;
Confidentiality; and
Professional Behaviour.
These are not optional. When faced with pressure, your responsibility is clear: uphold these principles—even if it means walking away from a client.
Major Updates to the IESBA Code: Tax Planning Under Scrutiny
Effective 30 June 2025, two new sections of the IESBA Code introduce strict guidance on Tax Planning:
Section 280 – for accountants in business
Section 380 – for accountants in public practice
Both sections fully apply to all CIBA members together with CIBA’s Tax standards.
If you advise on structuring business operations, international tax, executive compensation, or tax-incentivized investments, these apply to you.
Planning activities consist of advice on:
Structuring international operations to minimize its overall taxes.
Structuring of transfer pricing arrangements
The utilization of losses in a tax-efficient manner.
Structuring capital distribution strategy in a tax-efficient manner.
Structuring the compensation strategy for senior executives to optimize the tax benefits.
Advising a non-profits on how to structure its business to avoid breaching its non-profit status.
Structuring investments to take advantage of tax incentives offered by jurisdictions or localities
The new sections acknowledge that tax planning can trigger:
Self-interest threat: Occurs when a professional accountant has a financial or other interest that could inappropriately influence their judgment or behavior. For example, when the accountant's remuneration depends on the success of a tax planning scheme.
Self-review threat: Arises when a professional accountant is in a position to review or evaluate their own previous work or that of their firm. For instance, advising on a tax strategy that the accountant previously helped implement.
Advocacy threat: Happens when a professional accountant promotes a client's position to the point that their objectivity is compromised. This could involve defending a tax planning arrangement that lacks a credible basis in law.
Intimidation threat: Occurs when a professional accountant is deterred from acting objectively due to actual or perceived pressures, such as threats of dismissal or litigation from a client.
The IESBA Code calls for professional skepticism, proper supervision, and ongoing CPD to help you identify and mitigate these risks.
The Code now demands:
Transparent disclosure of risks and uncertainties
Identification of ultimate beneficiaries
Careful documentation of your advice, rationale, and the client’s response
What the Law Says: NOCLAR and GAAR
Two legal frameworks now shape how ethical issues must be handled:
NOCLAR: Non-Compliance with Laws and Regulations
If you suspect your client or their staff is:
Hiding income
Committing tax fraud
Breaching any tax legislation
…you’re legally obligated to act. The IESBA Code’s NOCLAR standard requires that you:
Investigate further and document everything
Raise the issue with your client or management
Consider withdrawing if they refuse to act
Report the issue to authorities if needed
NOCLAR applies even if the non-compliance wasn’t intentional. You can’t plead ignorance or “just following instructions.” Your ethical and legal responsibility remains.
GAAR: General Anti-Avoidance Rule
Even if a tax strategy appears compliant on the surface, SARS can still reject it under the General Anti-Avoidance Rule (GAAR)—outlined in Sections 80A to 80L of the Income Tax Act.
GAAR allows SARS to disregard transactions if:
The primary purpose was a tax benefit
The transaction lacks commercial substance
The structure produces abnormal results
This applies to circular schemes, fake offshore investments, and artificial loss creation. If SARS finds that your strategy is more about dodging tax than real business substance, both you and your client could face severe penalties.
💡 Tip: Ask yourself—would this arrangement make sense if no tax benefit existed? If the answer is “no,” GAAR might apply.
Real Threats, Real Scenarios
Ethical challenges often show up disguised as business requests. Examples include:
A client wants to leave out part of their cash income.
✅ Ethical response: Refuse, explain legal risk, and withdraw if needed.You’re offered a commission for recommending a tax product.
✅ Ethical response: Disclose the conflict and act in the client’s best interest.Your cousin wants tax help for her new NPO—cutting corners to maintain non-profit status.
✅ Ethical response: Explain the law, act transparently, and document everything.
Practical Ethics Checklist for Accountants
Use this quick checklist as part of your regular tax advisory process to stay compliant, credible, and confident in your practice:
Before Giving Tax Advice
Have I reviewed the latest SARS updates relevant to this client?
Does the strategy have real commercial substance—not just tax savings?
Have I identified any conflicts of interest?
Am I relying on aggressive assumptions or loopholes?
Would I be comfortable defending this position in front of SARS?
During Client Engagement
Have I explained all legal risks and uncertainties to the client?
Did I clearly identify the ultimate beneficiary of the arrangement?
Have I raised any NOCLAR red flags internally or with the client?
Is the client pressuring me to “just make it work”?
Are proper disclosures and safeguards in place?
After the Work is Done
Have I documented:
My analysis and rationale
The client’s response and instructions
Any concerns raised and how they were addressed
Did I keep records in line with IESBA and CIBA standards?
Would this file stand up to scrutiny in a SARS audit or tribunal?
Should I withdraw from the engagement or escalate the issue?
💬 If anything on this list raises a red flag—stop and re-evaluate before proceeding.
Final Word: Ethics Is a Career Asset
Clients don’t want just a number cruncher—they want someone they can trust to protect them. That means:
Saying no when needed
Keeping up with ethics codes and tax law changes
Recording every major judgment and client discussion
Being bold enough to walk away from unethical work
Ethics isn’t just a technical skill. It’s a career asset, a practice builder, and a professional differentiator. In a world of growing tax complexity and SARS crackdowns, ethical tax practitioners are not just compliant—they’re in demand.
Join CIBA for a CPD on Ethics in Tax Practices here
By attending this webinar you will gain the following competence
Understanding and applying the ethical requirements of the IESBA in tax practices
Understanding the core principles of tax ethics.
Responsibility of Tax Professionals.
Ethical implications of tax planning.
